Article originally published AUGUST 29, 2005 –Reviewed and approved.
By Neil Jenman
All over the world, estate agents and developers have cosy relationships. The developers use agents to find suitable building sites. The agents use the developers as a source of commissions.
First there’s the commission on the sites; and second, developers usually give agents exclusive rights to handle the sale of the development. It can soon add up to big money.
It’s rarely easy work, however. Finding the right land takes a lot of time, a lot of effort and a lot of persuasion. Many people don’t want to sell to developers – or they want too much money.
An agent must be a powerful persuader to put a development deal together.
Two estate agents in the Chinese city of Shanghai used a rather more powerful method to put their development deals together. They set fire to the homes of stubborn owners. Last week, the two agents were sentenced to death.
In September 2004, in the Russian town of Kemerovo, six employees of a real estate agency (named ‘Comfort’) were arrested and accused of murdering nine home-owners by plying them with sleeping-pill-laced-vodka. When the owners fell asleep, the agents set fire to their homes.
In Western Australia, in 2002, an agent persuaded a home-owner to sign a contract with a developer. It seemed a simple deal. The developer paid a deposit of $10,000 and the balance was supposed to be paid within six months.
Today, in 2005, the property’s value has increased by around $500,000. But, aside from the initial deposit, the developer has paid nothing else.
The despairing owner says he has been to six different lawyers and they have all said the same thing – in the fine print of the contract are some sneaky little clauses that benefit the developer and the agent. The developer can pay the balance when he feels like it. And, yes, he still gets the property at the 2002 price.
So, wherever in the world you live, the message should be clear. If an agent comes knocking saying a developer wants your property, there are two things you must do. First, go and speak with a lawyer of your own choice before you make any decision or sign anything.
And second, get yourself a fire extinguisher – just in case.
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