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Shameless Real estate agents make illicit gains at clients’ expense

By the MaltaToday team

No wonder surveys put real estate agents in the lowest bracket when it comes to public esteem. MaltaToday has confirmation of a shameless action by property negotiators that has contributed to widespread financial hardship with many first time buyers.

It is thought that the real estate industry itself, is contributing in no small way to the hiking of Maltese property prices, through illegitimate practices that also cheat their own clients to the agency’s or individual negotiator’s advantage. In recent years, the price of property has grown by 400% in some areas.

MaltaToday insight team has records of homes bought on contract by the negotiatior on Lm230,000 and sold some days later for Lm330,000. The numerous examples in hand also refer to land deals with land sold at Lm80,000 and resold days later for Lm300,000. But smaller figures also abound and they include flats sold for Lm24,000 and resold days later for Lm34,000.

Sources from within the industry have confirmed with MaltaToday that it is a more than common practice for a negotiator to identify a property placed on the market by a seller who the negotiator feels is asking too little for the property in question.

However, once such a modest seller is identified, a negotiator would report the matter to a superior, who would then take action to place a deposit on the property himself, or in the name of the company.

After placing the deposit, usually some 10 per cent of the asking price, and signing a contact (konvenju), the parties involved then go about selling the property themselves for the price that it is really worth, which is sometimes considerably higher than the original seller had ever imagined. The details of the practice also make clear the fact that a number of notaries are aware of the unethical sales method.

Unlike many European countries, notaries in Malta are not bound by strict ethical rules and many notarial offices are involved themselves in such practices.

According to sources, such estate agents prey on first-time sellers and the more naïve.

The practice is wide-spread among both the larger and smaller agencies and is as common as ‘having a cup of coffee in the morning’ as ‘everyone wants to make more than they are, with less work being involved’.

The Central Bank of Malta in its annual report 2000 explains that land usage and property is an important resource for the Maltese economy. The Bank reports that property price inflation reached a peak in 1996 and thereafter tended to develop cyclically reflecting swings in demand. In the year 2000, an increase in property asking prices was observed.