Mar 2022 - 3 min read
In early 2019, a seller appointed registered salesperson Zhang Weilu, from PropNex Realty, to market his Housing and Development Board (HDB) flat. After conducting the financial calculations, the seller agreed to market the unit at $580,000. He also agreed that Zhang would receive a commission of 2% of the sale price for a successful transaction. As the seller was not staying at the unit, he gave the keys to Zhang to conduct viewings.
After marketing the unit from June 2019 to October 2019, Zhang proposed that the asking price of $580,000 be reduced as there were no willing buyers. However, the seller was not amenable to this.
Sometime in October 2019, Zhang informed the seller that many potential buyers were concerned about the Cash-Over-Valuation (COV) amount they would have to pay if their offer price was more than the valuation of the unit. Upon hearing this, the seller asked Zhang if it would be possible to get a valuation of the flat. Zhang suggested finding someone to pose as a buyer by registering an Intent to Buy and submitting an Option to Purchase (OTP) to HDB, so as to apply for a valuation report.
Zhang then prepared an OTP with a purchase price of $535,000. Indicating himself as the buyer, he filled in his NRIC number and signed the witness portion as “William Zhang”. To compound matters, he forged the seller’s signature on the OTP and submitted the OTP to HDB.
Thereafter, a HDB appointed valuer conducted the valuation of the unit with Zhang. After receiving the valuation report which valued the unit at $525,000, Zhang informed the seller, and convinced him to reduce his asking price accordingly. Zhang eventually found buyers for the unit at $525,000 and a genuine OTP, signed by the seller, was exercised by the buyers and submitted to HDB.
Subsequently, HDB discovered that Zhang had falsely declared information in the Intent to Buy which he submitted to HDB in relation to the OTP he had falsely prepared. Further investigations also revealed that two OTPs were issued in the seller’s name for the sale of the unit but with two different signatures of the seller. After confirming with the seller that he had only signed one OTP, HDB suspected that Zhang might have forged the seller’s signature on the other OTP in order to obtain a valuation of the unit and referred the case to CEA.
CEA’s Disciplinary Committee (DC) convicted Zhang of breaching paragraph 7(1) read with paragraph 7(2)(a) of the Code of Ethics and Professional Client Care, under the First Schedule of the Estate Agents (Estate Agency Work) Regulations 2010, for doing a deceitful act which may bring discredit or disrepute to the estate agency industry by submitting a fictitious OTP to HDB so as to apply for a property valuation report from HDB.
The DC sentenced Zhang to a three-month suspension and a financial penalty of $2,500. One other charge was taken into consideration.
Industry practitioner’s view on the case
By Mr Eugene Lim, Key Executive Officer
ERA Realty Network Pte Ltd
It is common for some sellers to have unrealistic price expectations. In this case, after Zhang had marketed the property for about four months, it was quite clear that the seller’s expected price was higher than what the market was willing to pay. Asking Zhang to get a valuation of the flat was an indication that the seller might have been prepared to adjust his price following an independent valuation.
Zhang could have arranged for a formal valuation to be done by a licensed valuer. That report, which would have shown the open market value of the flat at that point in time, would have been the proper way to convince the seller that his expected price was above the market and helped him make an informed decision about lowering his price.
Instead, Zhang chose to submit a fake Intent to Buy and an Option to Purchase (OTP) in order to apply for a valuation report. He also forged the seller’s signature on the OTP that was submitted to HDB as supporting document to apply for the valuation.
While the end result led to the seller lowering his price, Zhang’s series of deceitful acts to obtain that valuation landed him in trouble.
Information accurate as at 3 March 2022