Maltese Real Estate Agents: Scientologists, Con Men or Both?

Me and my wife have been helping my parents to look for a flat in Malta for a while now and every time I meet up with a real estate agent I am left questioning their moral, business mindedness (is that even a word?) and ethics. It seems all they want to do is to sell, which I can respect. But they want to sell the property to you no matter the price. I’m not talking about the price of the flat here because that is pretty straight forward. These people don’t seem to care if they have to cheat you, lie to you, or even if they have to give up their first born, they have to make that sale and make their precious commission.

Some of these agents give the impression of being con men as they go about their business telling you all kinds of semi-truths while at the same time withholding vital information such as ground rent and other things that would make you run for the hills instead of signing a contract to buy a flat.

Other agents take what I like to refer to as the “Scientologist Approach” when they just won’t take no for an answer. You tell them over and over that you are not interested in the flats they showed you but they insist on calling you several times a day to try and convince you to buy the flat anyway. There is one particular company that has been calling my parents at least ten times after they said no to buying a flat with all sorts of ground rent to try to convince them that the ground rent really “isn’t such a big deal”. I am sure that these agents got their training at the Church of Scientology, there is no other explanation for taking this approach.

Since I have been dealing quite a lot with these types of real estate agents in Malta lately I thought I would let you in on some of the scams they are trying to pull.

The Ground Rent Scam

As such, the ground rent is not a scam. It’s just that you don’t own the land on which your flat is built. This seems fair to me as long as the agent that is trying to sell you the flat is upfront and honest about the fact that you will either have to move your flat from the ground that is on once the contract expires (might be an issue) or you will be subject to an increase in ground rent to be able to keep your flat on the ground it is built (price increase may vary, terms and conditions apply).

Before I meet up with an agent to see a flat I always tell them specifically that I am NOT interested in seeing a flat which has ground rent. But not only do they seem to ignore that little request, they also do their best to cover up the fact that the flat you are viewing has ground rent. When I ask to double check that the flat that seems under priced for it’s location and design is it fact “freehold” you get replies like “I will check with my manager” (which never happens) or the classic “it’s not a problem” (which means yes it does have ground rent, but it’s not my problem).

To take this scam, which at this point is more like a “long con“, even worse they also try to push you to go sign the contract with a notary that they have recommended because he is “cheap”. Of course he is cheap! They could be paying you 5000 Euro to go and sign the contract with this notary and you would still be the one getting scammed because you are buying a flat which has no resale value due to the ground rent. The only real way to sell this flat in the future is for you to become the real estate agent Confidence Man.

The Tourist Rate Scam

After 7 years in Malta I’ve gotten used to paying 1 Euro for a bottle of water at the kiosk while the Maltese pay 50 Cents, that’s not the end of the world. But when the difference between being a foreigner and a Maltese means 10.000 – 15.000 Euro it’s no longer a laughing matter. It’s downright robbery in my opinion. Some of the flats we have been looking at are being sold (or at least they attempt to sell) by several different real estate agencies. After having seen the same flat three times with three different agents and being given three different prices I started to realise that someone is trying to rip me off. The agents insist that the owner of the flat is giving different prices to different agents, which would make sense if their commission structure varied, but it doesn’t. So the only reasonable explanation is that some agents are trying to charge more for the property than the owner is asking for. Either they do this to try to crate the illusion of you getting a bargain when you manage to get the price down or they are just trying to make some extra money on top of their already ridiculous commission.

The Ridiculously High Commission

Why should you as a buyer be concerned about the commission the real estate agent is charging the person selling the property you might ask. Well that’s because it’s not really the seller who’s paying the commission. At the end of the day it’s you who is paying the agents commission through your purchase.

Since you are basically paying the real estate agent 5% (standard rate) of the price of the flat in commission you might think that you could expect some kind of service and basic information about the property you came to see. But that’s not the case when seeing a property with a real estate agent in Malta. Whenever you ask the agent a question that should be pretty straight forward they have to either ask the property owner (if he is with you at the time) or they will have to go back to the office and check the online listing.

The agents are basically just getting potential buyers in contact with the seller by putting an advert in the classifieds section of the Times of Malta, posing as a seller (that’s poaching in my books) or the have a listing of the property on their website. That’s all they really do. And that doesn’t warrant for a 5% commission in my world.

The Fighting Over a Client

This one is pretty new to me as it just happened pretty recently. We had made an appointment with two different agents at the same day just 15 minutes apart to see what we thought were two different flats. As it turned out we had made the appointment to see the same flat with the two agents even though the pictures of the flat, the description and the price was different when we made the appointments.

To make matters worse the agent who we had made the later appointment with had collected the key for the flat earlier that day and refused to come and drop it off so that we could view the flat with the agent who we had made the earlier appointment with.

The agent who was now unable to show us the flat without the key went on a major rant telling me, the client, that there was just “no way that they were going to let XXXX real estate agency sell us this flat and steal their commission”. I have never gone to business school but I have a feeling that making the client feel like a walking check book is not a part of the curriculum.

Both real estate agencies have show incredible greed by not just agreeing to split the commission and show it to us together and we just lost interest in the property altogether. If I was an agent and this happened to me I would think 2.5% of something is better than 5% of nothing and tried to work something out between us. But instead they have kept this fight going for the full 5% commission going, using us as the mediator which lost the sale for both agents. I guess they don’t really teach business sense at the Church of Scientology.

The Honest Real Estate Agent

I have yet to meet the Maltese real estate agent that gives me all the facts and at the same time doesn’t try to over charge me on the price of the flat. Just imagine what could be accomplished if just one agent decided to take the high road and showing the clients all the up and downsides to the property they are viewing. Not only would this mean that they build trust with the client, making sure that they don’t buy property from any other agent but it would also be great for getting repeat clients and great word of mouth advertising.

6 September 14, 2011 By Marcus in Blog Tags: , , , , , ,

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