Do not believe everything you read. Unfortunately, this warning is not heeded by home-buyers when they look at enticing advertisements posted by property agents. Many home-buyers are taken for a ride by property agents who publish misleading information. The Government has been slow addressing the problem, and it was only recently that the Estate Agent Bill received its third reading in the Legislative Council. The bill ensures the accuracy of property advertisements being disseminated to the public by real estate agents. It is a common practice for property agents to advertise units at attractive prices to lure home seekers to approach them. Then, the clients will be told the advertised unit has been sold and they start selling them another flat at market prices. The long-awaited Estate Agent Bill proposes to set-up an Estate Agents Authority responsible for issuing licences to agents and monitoring their performance. Many agents have strongly opposed their representation in the Estate Agents Authority being cut from six seats to four, and some said there was nothing wrong with placing 'false' information in advertisements. However, things will change when the 20-member Estate Agents Authority is formed in about three months. The law requires licensed estate agents to provide accurate information in advertisements. Agents have defended themselves by saying it was difficult to provide accurate advertisements because of volatile property prices. They said prices fluctuated from day to day and owners frequently changed their asking prices. 'So it is difficult to update the advertisement to ensure the information is correct,' an agent said. Agents also explained it was a gimmick to attract public attention which caused no harm to consumers. They claimed consumers only lost time calling agents. At the same time, most agents declined to say if those advertised units actually existed, except Centaline Property Agency. Centaline Property Agency managing director Shih Wing-ching said most of the firm's property advertisements in newspapers did not exist. He said this was an advertising gimmick called 'invitation of treats'. A unit in Sha Tin advertised for $5.8 million, for example, did not mean the owner had agreed to sell at that price, he said. The advertisement merely invites people to make an offer on the property. The agent, in turn, offers its selling technique by bargaining the price for them. He said most readers misunderstood this to mean the owner's offering price. He said the marketing strategy was used due to intense competition in the industry and the need to draw in people who were attracted to cheap prices. 'If you do not follow the rule of the game, you will lose customers to other competitors,' he said. The situation would change, however, when the industry watchdog's Estate Agents Authority was formed, he said. 'We have to obtain written approval from owners before placing the advertisement to ensure all information is accurate,' he said. He said the company had planned to advertise properties on the Internet with exact asking prices. Surprisingly the Association of Accredited Advertising Agents of Hong Kong said it had never heard about false advertising gimmicks or 'invitation of treats'. Anyone could draft their own advertisement and place it in a newspaper, an association spokesman said. The newspaper could reject the advertisement if it contained inaccurate information or was misleading to readers, the spokesman said. But the spokesman insisted all advertisements handled by its member agents had to be accurate. New L&D executive director Edmund Ng said the law requiring accurate information in advertisements was not practical for the Hong Kong property market. 'Hong Kong's property prices move up and down, unlike Western countries such as Canada where prices remain flat most of the time,' he said. Meanwhile, property prices also were sensitive to large transactions recorded in nearby areas, or even the result of public land auctions, he said. Therefore, it was difficult to update advertised information from time to time, he said. The bill also will require estate agents to provide clients with accurate information on ownership, floor area, year of completion, permitted use, expiry date and right of renewal of the lease. The Society of Hong Kong Real Estate Agents, with more than 8,000 members, estimated the rule would cost the industry $60 million to enhance its credibility. The society estimates estate agents have to spend at least $70 to prepare required information on each unit handled under the new law. Midland Realty executive director Joseph Ling Kwok-fai said the company had strengthened its data bank and increased in-house training in preparation for the new rule. 'We have set up six centres to provide training for our 2,000 employees in a bid to comply with the future licensing system,' he said. He said more than 1,000 small agents, which had only three employees each, might be forced to close down because of lack of resources to comply with the new rules. HongKong Property Services (Agency) managing director Michael Choi Ngai-min said his company also had spent millions of dollar in preparation for the new rule. The company also planned to increase its 113 branches to 200 by April next year, he said. Although estate agents have complained about the bill, many have laid responsibility for its need on unscrupulous agents. Most, however, welcome the rule to upgrade the industry's professional standard.
