PropNex won't guarantee purchase if no take-up: CEO

Singapore
Published February 14, 2007

PROPERTY

PropNex won't guarantee purchase if no take-up: CEO

Not meaningful in today's property market, he says


By ARTHUR SIM


PROPNEX will not be copying the move by two estate agencies to guarantee to buy properties they take on if no other purchaser can be found.

CEO Mohamed Ismail said yesterday that this would 'not be meaningful' in today's property market.

The scheme by the two agents gives a guarantee that they will buy unsold homes at 90 per cent of their valuation price. Mr Mohamed said: 'If this was offered two years ago, then I would say kudos to those offering it.'

He said PropNex had analysed the data from the 2,500 private property transactions it completed last year - representing about 20 per cent of the market share in the secondary market for private property - and none had been sold at a price as low as 90 per cent of the average valuation from three separate independent valuers.

'In today's market, you should be looking to sell at above the valuation,' he said.

He did, however, point out that the situation was very different in 2003-04. By his estimation, about 50 per cent of transactions done then were below average valuation.

Mr Mohamed was speaking at the launch of PropNex's Prestige Home Marketing Programme which, although it does not guarantee to buy your property if no one else will, does promise that at least three of its agents will work to sell your home. 'We will make our agents compete against each other to get the best offer,' he said.

As an example of working harder for clients, he revealed that a PropNex agent had brokered the sale of an Ardmore Park apartment recently for $25 million even though the owner had been looking for $23 million.

PropNex also launched its Internet service called Home Owner's E-infosys Virtual Connection, which effectively allows all 4,000 of its agents to market a home. Clients can log into this service to retrieve updates on marketing efforts including the number of offers made and the highest offer to date. 'We want to make it as transparent as possible for the seller,' Mr Mohamed said.

Other perks includes a Guarantee Performance Plan which stipulates certain marketing initiatives including the number of newspaper advertisements the agent will place.

Mr Mohamed said he was very upbeat on the property market. PropNex agents earned combined commissions in excess of $70 million in 2006, up from $63 million in 2005.