PropNex CEO: What Seniors & Singles Should Be Thinking About Right Now

In this exclusive one-on-one interview with iProperty.com at the recent iProperty.com Expo at Marina Bay Sands, CEO of PropNex and Singapore’s leading real estate expert Mohamed Ismail Gafoor discusses the latest trends in the Singapore and Malaysia property market. He also provides valuable advice for 2 growing demographic groups in Singapore: seniors who own a house and are planning for their life after retirement, and singles under 35 contemplating their first studio home purchase.

Mohamed Ismail speaking to a full crowd at the iProperty Expo at Marina Bay Sands

Q. You have often emphasized that landed housing in Singapore is by far the best choice for real estate investors. Could you tell us why? 

Landed property will always be a goldmine – for the simple reason that land is in limited supply, and Singaporeans will always consider owning a landed house to be their ultimate dream.

However, not all landed properties are created equal. While the government can still release sites for landed properties with a 99-year lease, the existing stock of freehold landed properties are highly limited. I would lean away from landed properties with a 99-year lease as they present unique challenges for their owners. It is much harder for leasehold landed properties to meet the criteria for enbloc, as a 100% owner consensus is required – as compared to private condos more than 10 yrs old which need only 80%. There is only a 20-25% price difference at the entry-level for freehold vs. leasehold for landed properties, but the key advantage of freehold landed homes is that it provides for perpetual ownership, making it a much better deal.

Q. What are the possible implications of the proposal to double the entry price at which foreigners can buy real estate in Malaysia?

First of all, I can certainly understand the rationale behind such a policy proposal. Just as what has happened in Singapore, the Malaysian government is concerned about a property bubble forming, and likewise they also have to address the growing public concerns on the ground about rising property prices.

In spite of this, I remain very confident that the M$1 million minimum price for foreign purchasers of Malaysian property will not be a blanket limit across all states. In particular, such a policy would not be advantageous for the state of Johor especially when the entire Iskandar project is still at the infancy stage of development. It is likely the MY$1million minimum purchase price will apply to properties in the downtown KL region, but highly unlikely for areas such as Ipoh and Malacca.

As many well-off Singaporeans have already been picking up units well above the MY$1 million mark, it will not be surprising if they remain willing to pay for a good product which is still relatively affordable, particularly given the strength of the Singapore currency. Those most likely to be affected by the higher entry price are HDB upgraders, who have been mostly buying lower-tier fringe properties.

Q. What should senior citizens keep in mind when deciding if they should opt for the LBS (Lease Buy-Back Scheme), or “downsizing” to a studio flat instead?

PropNex CEO Mohamed Ismail

The LBS has the advantage of allowing seniors to continue to stay in the same flat in the same environment they have grown used to after many years. While some may be concerned about “outliving” the 30 years remaining on the lease under this program, the reality is that there are many seniors who will require specialized care at a health-care facility by that age. Hence, although the take-up rate for the LBS scheme has been low, I do see some do see some merit in this program.

However, I consider “downsizing” to be the more exciting option among the two.  Downsizing to a studio apartment allows seniors to be able to completely cash-out on their existing property and use part of the proceeds to buy a smaller elder-friendly property at a reasonable price. Living in an elder-friendly community with adapted facilities (e.g.: lifts and ramps) will also provide a close-knit community where seniors can grow old together. Furthermore, having a lump sum payment in hand also gives one a greater feeling of strength and security. However, the inherent risk in “downsizing” is that seniors who do not have necessary skill or discipline to manage their funds can lose everything very quickly. Hence, deciding which option to go is very much an individual decision.

Q: What advice do you have for single working professionals under the age of 35 who are contemplating investing into a private studio flat for their own-stay?

As Singapore’s population continues to increase, it is inevitable that property sizes will shrink. Although shoebox unit sizes in Singapore are still decent compared with cities such as Tokyo and Hong Kong, it is undeniable that reduced space and high density will lead to a compromised lifestyle.

For single working professionals who want to move out of their parent’s house into their own home for lifestyle reasons, I would say that it is perfectly okay to buy studio apartment –  but they really need to look out for the PSF (price per square feet) they are paying. Although the quantum of studio apartments may be low, all capital appreciation is ultimately a by-product of rental yield. Hence, the risk is that if rentals do not go up much, there is limited room for capital to appreciate. Paying high prices for an entry-level studio flat in the outlying areas could mean there may be limited scope for rental appreciation.

 

iProperty Group Continuing The Momentum

What an exciting and busy week it has been!

We held our very first EXPO in Penang last weekend and what a tremendous success it was. Organised on behalf of the Real Estate and Housing Developers Association (REHDA) Penang, MAPEX Penang 2012, with the theme The Most Lau Juak Property Show, was certainly well received by Penangnites and foreigners alike.

The three day expo, launched by YB Chow Kon Yeow, State EXCO for Local Government and Traffic Control, who represented YAB Lim Guan Eng, Chief Minister of Penang, attracted over thousands of people from all walks of life who made their way to the Straits Quay Convention Centre to grab the best deals in town.

Here are some snap shots of the event:

YB Chow Kon Yeow Officially Launching MAPEX Penang 2012

Folks visiting the booths at the MAPEX PENANG 2012

After such an astounding success in Penang, all focus is now on delivering an equally successful iProperty.com International EXPO in Singapore, which will be held from the 20th – 22nd of April 2012 at the iconic Marina Bay Sands from 11am – 8pm.

Also present at the EXPO will be Howard, our friendly mascot in Singapore who is keen on letting people to be in the know not just about the latest in the property market, but to also provide them with the opportunity to discover the best deals in town.

From the peaks to the valleys, Howard is on ground to promote the EXPO.

So, do lock in the dates and we hope to see you there.

On a separate note, we are keeping to our promise to only deliver the best, fastest and easiest search experience for our consumers. We have recently made some changes to our website – iproperty.com.my, making download of information of property news and search faster. We are pleased to say that these changes will be implemented across our other three portals in Hong Kong, Indonesia and Singapore.

So, brace yourself to have all the information you need to make an informed decision downloaded in a blink of an eye.

Another significant accomplishment on the innovation front is the Malaysian team winning at the recent Facebook Mobile Hack Day in Singapore. With a total of eight submission and only four winners to be selected, we are proud to win the Best Overall App for use of Facebook.

The team developed an app called the Property Friend Finder, which will enable users to find properties that are near their friends and family.

These are only some of the innovative things that we at the iProperty Group are working on. We assure you, there are more interesting things in store. So, do stay tuned!

Enjoy the week!

Looking back on 2011: Key Property Highlights of the Year

As we ring in the New Year, iProperty.com takes a look back to remind you of the highlights of the real estate market over the last 12 action-packed months:

1. Cooling Measures 2011

The additional cooling measures introduced by MND (Ministry of National Development) was by far the most talked-about topics within the property industry this year. These included the increase of seller stamp duty rates to 4 to 16% for residential properties sold within four years of purchase, as well as the lowering of LTV (Loan-to-Value) limits from 70% to 60% per cent for buyers financing two or more properties.

In November 2011, MND also shocked the market by announcing the increase in Additional Buyer’s Stamp Duty of 10% for foreigners purchasing private residential property.

2. Relief for The Middle-Class Masses

Those in the “sandwiched middle-class” had much to rejoice about this year, when MND announced that the income ceiling for buyers of HDB flats would be raised from $8,000 to $10,000, and from $10,000 to $12,000 for buyers of ECs (Executive Condominiums).

Other measures included the release of large numbers of BTO (Build-To-Order) flats, accompanied by a SBF (Sale of Balance Flats) exercise in September earlier this year.

3. En-Bloc Schemes a Plenty

Rochor Centre, Redhill Close, East Coast Road and Clementi Avenue 5 were all examples of the areas which were ear-marked for SERS (Selective En bloc Redevelopment Scheme) this year. While the sentiment of residents affected was mixed, a good many were most concerned about compensation and replacement programs – with some even writing some (very public) letters to voice their unhappiness, contributing to the extensive media coverage on this topic.

4. DBSS Sticker-Shock

While high property prices in Singapore are nothing new, the price tag of $880,000 for a unit at Centrale 8, a DBSS (Design, Build & Sell) project in Tampines proved too much even for the locals to swallow.

Very quickly, petitions from the public led to MND stepping in to freeze all land sales under the DBSS program. However, prices of Centrale 8 were eventually lowered, and DBSS sales soon continued into the year, with projects such as Lake Vista @ Yuan Ching, the first DBSS project in western Singapore, launched at more affordable prices, from S$360,500 for the smallest unit to S$680,400 for the largest flat.

5. ECs: the Hot Property of 2011

ECs were in high demand in 2011, with notable launches including the Arc at Tampines –which commanded higher average PSFs as compared to Belysa, the previous EC launch in Pasir Ris earlier in the year.

ECs particularly appealed to home-buyers whose income was below the revised ceiling of $12,000, and who wanted accessibility to condo facilities such as 24-hour security, a swimming pool and tennis courts.

6. Record-Breaking PSFs

Developers certainly had reason to pop out the champagne at their annual company dinners this year. Earlier this month, more 80% of the freehold Charlton Residences was sold, even before its official launch. New benchmark prices were also set at the preview of Thomson Grand in Upper Thomson, with PSFs for apartments topping a jaw-dropping $1,600 psf. EC developers also had much to celebrate this year, as mass-market EC projects like Blossom Residences enjoyed strong consumer demand during the first weeks of their launch.

How Much House Can You Really Afford? Tips for Budgeting for your first Home

With housing prices having risen by double-digit figures annually for the past several years, an increasing number of young Singaporean couples are finding that servicing a monthly housing mortgage has become increasingly challenging.

Compared to a generation ago, where Singaporeans could select an HDB flat for the bargain price of $70,000, those in their mid twenties to thirties buying a home for the first time today have to grapple with rapidly rising costs and ominous signs of a looming global recession on the horizon.

If you find yourself in such a situation, what can you do to best ensure you choose a flat within your means, and that your CPF savings are adequate to service the mortgage loan? Read on to find out the key financial considerations for making the home of your dreams become a reality.

1. Can You Afford the Downpayment?

Although property buyers used to be able to borrow as much as 100% LTV (loan to value) during the property boom, those days of liberal lending are long over, and home buyers today have to put up more cash and CPF before they can buy a home.

While first-time HDB buyers can still put down just 10% of the value of their flat and get a loan from HDB for the remaining 90%, those who choose private property or do not qualify for an HDB loan can only borrow a maximum of 80%. Furthermore, buyers of resale HDB flats have to fork out an additional COV (cash over value), which can amount to as much as $50,000, and has to be paid out to the seller in cash.

 


2. The LTV (Loan to Value) Ratio

After you have determined that you are able to come up with the downpayment, private banks will loan up to 80% LTV, while those who qualify for a HDB concessionary loan may borrow up to 90%. Although current bank interest rates may be lower than the 2.6% extended by HDB, experts generally advise first-time home buyers to go with the HDB loan option instead, as HDB rates are pegged to the CPF rates plus 0.01%, hence offering greater long-term stability.

For those deciding between a private property or HDB purchase, it would be helpful to bear in mind that HDB will only extend loans for public housing purchases, but in recent times private banks have been seen to be more lenient in extending mortgage loans for private property vs. HDB – particularly given the stringent MAS regulations surrounding HDB loans.

3. How Much Would You Need to Make to Afford a $350,000 HDB Flat?

With a standard 4-room resale HDB flat costing around $350,000 these days, how much would you have to make to be able to be able to comfortably afford your monthly mortgage payments?

At an interest rate of 2.6% (currently the HDB concessionary loan rate) and a mortgage term of 30 years, a family would have to earn a combined gross monthly salary of at least $3,500 in order to be able to be able to afford a monthly loan payment of $1,400.

However, this minimum income of $3,500 is calculated on a 40% loan quantum, and each family should adjust their calculations should they have other major financial commitments to consider (eg: auto loan, baby expenses, parent allowances, etc).

4. A Steady Income Flow for the Next 30 Years?

Along with the other good rule of thumb of making sure that you and your partner’s combined CPF contributions can fully cover your monthly mortgage payments, one key factor to bear in mind is that both employer and employee CPF contributions are reduced after age 55, with total CPF contributions falling from 36% to 30% as a percentage of total income.

As it is likely you will still be servicing your 30-year mortgage loan at the age of 55, it is good to bear in mind that retrenchments affect workers aged 40 years and older the most. To avoid the worst-case scenario of being evicted from your home (touch wood) – the oft-repeated mantra of keeping to your budget, and buying only what you can afford is sound advice to follow.

Given that buying your first home is likely the biggest financial commitment of your life, one last important tip is to make sure you take advantage of all the help available out there. For example, HDB offers an Additional CPF Housing Grant (of as much as $35,000) for those who qualify. Generous relatives can also be excellent sources of help, and there are many cases of parents who will “help” their children get started out by contributing a sizable portion of the downpayment for their new flat. As always, in the case of buying a new home, when you need all the assistance you can get – it never hurts to ask!

Got A Queue Number? What You Need to Know to Pick the Right BTO Flat for You

There are a certain number of dates that young couples and newlyweds eagerly look forward to each year – the announcements of the launch of BTO (Build-To-Order) flats released by HDB, offering new Singaporean couples a chance to buy a subsidized first home. If you and your significant other have already taken the first step toward a future by applying for a BTO flat – Congratulations! While you may still be enjoying your honeymoon period, it can be easy to get caught up with the excitement of buying your first home. However, a property purchase is still one of the most important financial decisions you will make together as a couple, and it would be wise to bear in mind several important factors before leaping in:

1. It will Take Up to 5 Years For Your Flat to Be Completed

Nov 2011 BTO Launch: Yishun Acacia. Image courtesy of HDB.

While high-rise buildings seem to rapidly mushroom out of thin air in Singapore’s ever-changing skyline, young couples should remember that residential construction is a process that still takes a long time, and they should be prepared to wait up to 5 years before TOP (time of project completion), until the keys are ready for collection. With shifting demographic trends and more cases of Singaporeans choosing to marry in their late 20s and early 30s, couples, particularly those looking to start a family soon, may find that they may have to rent in the meantime. Although buying a resale flat to live in may also be an option, sellers are still subject to the minimum 5 year MOP (minimum occupancy period), which may be a problem as BTO flats may sometimes be completed ahead of schedule and may be ready for move-in in as soon as 4 years or earlier.

 

2. You Have to Live in Your Flat for At Least 5 Years

Nov 2011 BTO Launch: Fajar Spring. Image courtesy of HDB.

As with resale flats, BTO flats are also subject to the minimum MOP period of 5 years. Add this to the waiting period for completion and you are “stuck” with your flat, for better worse, for up to 10 years. While you and your partner’s life may seem stable at this point in time, we all know life can change when we least expect it.

If you do end up having to change your living arrangements, HDB allows flat owners to rent out bedrooms (not the whole flat) within the MOP period if you own a 3-room or bigger flat, with no prior approval from HDB required. In cases of divorce, HDB’s prevailing policy will allow the divorced party who has the custody of the child to retain the flat, subject to their eligibility conditions.

3. You Lose Your “1st Timer” Preferred Status after 2 Tries

Regardless of how many times you have applied – If you were invited by HDB to select a flat twice, but for whatever reason chose not to, you will lose your preferred status and will be moved to the end of the queue, to compete on a level-playing field with other 2nd time flat applicants.
While this was a critical concern in earlier years when HDB released fewer units under former Minister for National Development Mah Bow Tan, the 50,000 new flats announced this year by the new National Development Minister Khaw Boon Wan means there will be ample supply of BTO flats coming up. New couples may decide that despite the worse odds, it might still work out better for them in the long-run to keep balloting over and over again until they get a preferable queue number. After all, while it only costs $10 to apply, buying that BTO HDB flat would mean signing up for a 30-year mortgage financial commitment, so couples might be forgiven for only wanting to sign on the dotted line for a flat they really like.

4. The Price You See is Not the Price You Pay

Although HDB releases a list with information on the respective sale prices of each unit to successful applicants, buyers should note that additional costs such as buyer stamp duty, legal conveyance fees, moving and renovation costs can make the final price more than 20% higher. While HDB allows Singaporeans a HDB concessionary loans at a 90% loan quantum, with an interest rate pegged at 0.1% above the CPF rate, not all may qualify. The remaining option is to apply for a private bank loan, but under this option the maximum loan amount is capped at 80%, meaning the buyer has to fork out more out-of-pocket cash – which young couples out in the working world for just a few years may find hard to do.

The Curious Case of Bedok: Are We Paying More for Less, and Is This A Sign of Things to Come?

Bedok, a heartland estate on the Eastern side of Singapore, is currently a hot favorite among property buyers, as demonstrated by the long queues at the most recent Bedok Residences launch. While Bedok is still not yet in the leagues of top prime locations such as Bukit Timah and Bishan, the estate located on the eastern side of Singapore is proving to be a force to be reckoned with, given its ability to command strong consumer demand amid the news of a pending economic downturn. With these factors at play, could it be the case that Bedok’s housing prices are still currently undervalued?

1. Is Bedok Fast Becoming an “Elite” Town?

It is common knowledge that HDB home prices in a neighborhood can rise for a number of reasons – the building of a new MRT station, new shopping center, or even a change in perception of the “prestige” accorded to those living in the neighborhood. Often flats command a higher price because of it is considered to be an “upper-class” neighborhood.

Although Bedok may still be regarded by many as a HDB heartland for the middle-class, public housing buyers seem to be moving away from HDB flats in Bedok – a possible result of higher asking prices from Bedok flat owners, and their willingness and ability to “hold” for a longer period until they can get a good price. The total number of HDB flats sold in Bedok has been on the decline, falling more than 32% during the period from Feb 2010 to Feb 2011:

 

Reflecting the changing landscape and preference of private home buyers for flats in the Bedok area, the drop in HDB transactions in Bedok is accompanied with a sharp increase in the number of condo transactions in the area, rising more than from 31 from a year ago to 137 by February 2011.

2. A Look at the Numbers

Although the number of HDB flats sold in Bedok have dropped dramatically over the past year, buyers of flats in this estate are paying significantly higher prices as compared to a year ago. Both the lowest and highest transacted HDB prices in Bedok for the same period were accompanied by substantial YOY (year-over-year) price increases:

 

The HDB flat in Bedok with the lowest transacted price in Feb 2011 was $228,000, reflecting a 8.6% appreciation from the previous year. On the other end of the spectrum, the HDB flat in the same estate with the highest transacted price showed a 15.6% YOY appreciation, up from $552,000 to $638,000, with both demonstrating substantial price appreciation.

3. Paying More for Less?

As expected, the rise in Bedok’s HDB flat prices were accompanied by higher PSFs, both on the low as well as higher end. PSFs on the low-end increased 22.4% YOY from $254 a year ago to $311 in Feb 2011. On the other hand, in PSF for Bedok HDB flats on the higher end showed a modest increase of 1.41%, reflecting the trend of higher PSF prices for smaller flats.

4. How Bedok Fits into the Overall Housing Picture

As many locals still aspire to the increasingly elusive Singapore Dream of owning a condo, the increased demand for smaller units even in heartland estates such as Bedok seem to reflect the unwillingness of many to let go of the Dream, and living in a smaller suburban condo may be an acceptable compromise for those belonging to this group. As average wages have not risen as fast as property prices in Singapore, buyers still have to look for a property within their means, leaving a smaller flat as the only solution. The lower condo management fees for smaller units may also make these units seem more value for money, as they also carry lower monthly fixed costs.

However, buyers of smaller units, both HDB and condo, should be reminded that smaller living spaces have important implications down the road. Young couples may find the limited space may deter their plans for multiple children down the road, and reduce the quality of life for those who value having their own personal space. Additional costs, such as paying for self-storage facilities, may prove to be unforeseen expenses that buyers of small units may not have initially anticipated.

Home buyers in Singapore positive about prices of public housing

Survey results by iProperty.com.sg signal increased confidence in market stability

Recent government measures taken to address concerns surrounding the public housing market appear to have brought about some positive sentiments among home buyers, as demonstrated by a recent Poll conducted by iProperty.com.sg, Singapore’s number one property website.

The poll, conducted from August to November this year, asked respondents for their opinions on whether public housing prices will stabilise within the next three to five years – as mentioned by Minister for National Development Khaw Boon Wan earlier this year. 1,033 participants responded to the poll.

Key findings as follows:

1.   More than a third of respondents (36.9%) believe that three to five years is a fair assessment for public housing prices to stabilise.

2.   Trailing slightly behind are 31.9% of respondents who, on the other hand, think that prices will never stabilise and more radical measures need to be taken.

3.   19.9% of respondents think that the government is doing a stellar job and prices will stabilise over the next 1 to 2 years.

4.   11.3% thinks approximately 5 to 7 years is needed for prices to stabilise.

From the findings, it can be seen that a clear majority – 56.8% – are of the opinion that the government is either on track or will likely exceed expectations on their three-to-five year projection to cool the public housing market.

However, a significant minority – 43.2% – remain skeptical that public housing prices will stabilise in the timeframe put forward. Further to this, a large portion of this group – 31.9% of respondents – appear unconvinced of the current measures adopted by the government and feel further action needs to be taken.

Much of the positive sentiment can be attributed to the range of measures and plans the government had rolled out in the second half of the year. These measures include a series of new Built-to-Order (BTO) launches in July, September and November, injecting several thousand new units into the market. These include developments in highly-coveted mature estates such as Bedok, Yishun and Hougang. Complementing this were recent announcements made to enhance chances for repeat applicants bidding for new units, lifting of the income ceiling for Executive Condominiums, and for Barrier-Free Accessibility (BFA) features to be made available across all HDB estates by the end of December 2011.

“The findings of our Poll paint an encouraging picture, showing that measures taken by the government have borne some fruit,” said Shaun Di Gregorio, Chief Executive Officer of iProperty Group Limited. “However, as encouraging as these numbers are, we should also not forget that there is still a significant level of dissatisfaction still pervading the market.”

Referring in particular to the 31.9% of respondents who said that prices will never stabilise, Shaun Di Gregorio said that what the government does in the next six to 12 months will be crucial in winning over this group of skeptics. Key issues that may have contributed to this outlook include the pricing of units under the Design, Build and Sell Scheme (DBSS) and exceptionally high cash-over-valuation figures for some highly sought-after resale units.

“Affordability and lack of suitable options will continue to be the two most important factors for home buyers. While we are seeing a gradually-increasing level of positivity in the market, other concerns, such as the still-increasing price of property and fears of a potential economic downturn in 2012, will be key considerations that may mean the difference between a positive and less-than-positive 2012 for potential home buyers,” he added.

7 “Uniquely Singapore” Acronyms Every Property Investor Should Know

Singapore has been called the “Land of Acronyms”, and with good reason – abbreviations are used widely by locals to refer to highways and buildings, government agencies, financial institutions, political parties … and more.  It should come as no surprise that the local property industry also has its fair share. Here are some of the most commonly used real estate acronyms and abbreviations in Singapore:

1) HDB (Housing Development Board)

While many countries in the world have some form of public housing, Singapore is unique in that about 80% of Singaporeans stay in an HDB flat, giving it the distinction of having one of the highest percentages (if not the highest) of residents in public housing in the world. With the rapidly rising population and land scarcity, the time when an HDB flat hits the S$1 million mark may not be very far away.

2) TOP (Temporary Occupation Permit)

In layman terms, TOP refers to the time when construction is completed and a property is ready to be occupied. The Building Authority would also have issued a Certificate of Statutory Completion (CSC) at this time.

3) COV (Cash Over Valuation)

Most commonly used since the rapid increase of HDB prices since 2007, COV refers to the sum above and beyond what the flat is valued at. COVs have been known to reach highs of more than S$50,000 in recent years. Read the amount in COV that most Singaporeans are willing to pay up to here.

4) LTV (Loan to Value)

LTV refers to the maximum amount a bank will lend for the financing of a property purchase. Hence, for a S$1 million property, a LTV of 80% means that the bank will lend a maximum of S$800,000. More recently, a series of cooling measures introduced by the local authorities to discourage speculation have included the lowering of LTV for second mortgages to 60% from 70% previously.

5) SSD (Standard Stamp Duty)

SSD is imposed by IRAS (Internal Revenue Authority Singapore) on both buyers and sellers of property, and is calculated according to the amount of the property purchase value. For buyers, SSD is calculated according to a “tier” system, with 1% imposed on the first S$180,000, 2% on the next S$180,000, and 3% thereafter. The recent cooling measures have also included new SSD rates ranging from 4% to 6% for residential properties disposed of within 4 years of acquisition.

6) VTO (View To Offer)

VTO is commonly used in open listings, and can sometimes mean that the owner is “testing the waters” by not indicating an asking price in order to see what offers his property can attract. In some instances, a VTO listing may mean that the flat may not have had its valuation exercise completed.

7) Co-Broke

As both the buyer and seller may have agents on each end, a co-broke refers to the agreement where agents on both side agree to share exclusive listings with one another, with a 50-50 split of commission. However, the co-broke system is sometimes abused, in cases where agents may not reveal higher offers or encourage a client to buy a more expensive flat in order to maximize his commission.