Hong Kong Wen Wei Po (By Ngan Lun Lok, Leong Yuet Kam)
The real estate agents are outraged! Major estate agents who had made great contribution in GRAND CENTRAL’s hot sales of more than 1,300 units in recent months are outraged at developer’s recent unilateral notification that the commission of property sales for this project is only 1.7%, so they let off steam on various network platforms to criticize developer’s exploitation. As one of the leading agents in the industry, Centaline even rarely wrote letter to the developer who is Sino to express strong dissatisfaction and protests, also Midland and Ricacorp issued statements expressing dissatisfaction, which were rare in recent years that real estate agents dare to express their dissatisfaction to developers directly. As of the deadline of Hong Kong Wen Wei Po last night, there was no response from Sino, and the press conference from Sino and Hong Kong Telecom to announce the FTTB (fiber to the building) plan which was scheduled in this afternoon was canceled.
This event originated from last Friday, when Sino announced to the major real estate agents that the commission rate on sales of GRAND CENTRAL was 1.7% of the property price. Centaline, in the name of Mr. Chen Yongjie who is the President of the Residential Department of the Asia Pacific Region of Centaline, sent a letter to Huang Zhixiang who is the Chairman of the Sino to bluntly express "the voice from the five thousands of colleagues.” yesterday. Centaline expressed strong dissatisfaction and protest in the letter that the commission rate was even lower than the commission of 2% in second-hand property market. Centaline pointed they have cooperated with Sion on the first-hand property sales for many years, and also have earned a reasonable commission from them. After the letter was sent, Centaline added in the evening that "It only reflects the claim from colleagues for their rights and interests. No further action is considered yet."
It criticized the commission deviate from market trend in the letter.
Centaline pointed the sales management of the company have discussed the sales plan and commission with Tian Zhaoyuan and Yang Wen who are the Associate Director of the Sales Department of the Sino Land and Sino Group respectively, also they have been asked for at least 2.5% of the property price in commission, which would be in line with current market practice, but Sino did not respond positively while only required Centaline selling actively.
After more than 1,300 units were sold during four sales, with more than 500 units among were promoted by Centaline, Sino unilaterally announced on December 29, 2018 (last Friday) that the commission rate was 1.7% of the property price. Centaline criticized Sino’s behavior is lack of transparency and unfair to the real estate agents, also the commission deviates from current market and has a huge drop than that given to Centaline from Sino before, so they considered it is extremely unreasonable and unacceptable, furthermore, the incident has caused negative effects to the reputation of Sino in the industry.
Centaline strongly pointed in the letter the move has destroyed the trust foundation of the two sides over the years and seriously undermined the morale of their employees. They hopes that Sino can re-examine the commission rate and raise it to a reasonable level, so that both sides can return to the good relations of cooperation.
Agents earn nothing after giving return commission to customers.
Developer should consider there are many customers requiring return commission since the first hand property price is higher than their expectations while agents have to meet the demand in order for higher competition ability, which increases the cost for selling first hand property than that of second-hand property, therefore, Sino deprived the reasonable return of the agent by giving such a low commission, Centaline expressed.
“ Not like before that less customers required return commission, in recent years, customers ask for return commission at least in 1.5% to 1.7%, leading agents actually only received thousands of HKD in many transactions, therefore, agents are mad when Sino only provided a commission of 1.7%, which means they would bear negative profit.” one senior real estate agent said.
The commission rate of the first hand property sales has started from 1.5% since twenty years ago, and at least 2.5% in recent years, which even not change during the SARS period in 2003, he added.
Midland and Ricacorp expressed strongly dissatisfaction.
The rest large-scale agents also expressed their dissatisfaction yesterday. The company had already responded to the developer and expressed strongly dissatisfaction, also it is really unfair to the employees who had worked hard but received such low commission, at the same time it is glad to see the whole industry unite together to against the developer, the Chief Executive Officer of Residential Department of Midland, Bu Shaoming expressed.
Ricacorp has not yet sent a letter to the developer for the time being, but will consider doing it , and all colleagues expressed strong dissatisfaction about it, the President of Ricacorp, Liao Weiqiang expressed.