Bad Apples In The Malaysia Property Industry

Red, juicy apple muncher at GoodPlace HQ

Before I left the nine-to-five to work on GoodPlace.my, my (soon to be ex) boss warned me about the property industry – “There’s a small handful of people in this industry who pull all the strings. Nobody makes a move without getting their consent. If you want to shake things up, beware of these people.”

I knew that I had a mountain to climb, but I never expected to be thumbing my nose at the local equivalent of the mafia. But then again, property is one of the most lucrative verticals anywhere in the world, and I didn’t expect it to be free from bad apples who would typically get attracted to filthy lucre like, well, bad apples to filthy lucre.

And whenever I meet people now (in my capacity as GoodPlace’s Chief Everything Officer), they ask me what my plans are with GoodPlace, or for those who are more blunt, “Khai Yin, how are you making teh moniez?!?”

People want answers

99 Problems… And They’re All Bad Agents

I’m thankful that I am not under any pressure financially (business-wise), and for that reason I am pretty much free to do anything I want with GoodPlace and say whatever I want to say. I don’t have to kowtow to anybody or be forced to write about anything that I don’t believe in. And at the same time, I don’t have to think twice about taking the mickey out of the scoundrels who make money dispensing useless advice about property investment. 😉

(And in case you’re wondering, no, I don’t get bankrolled by anyone. My overhead is low, but I’m comfortable.)

And so I have started to meet up with agents (typically every Wednesday afternoon here at the HackerHub) to talk about how I can help them reach more home buyers (and if you’re one, consider joining our program). Agents tell me a very common sob story: many of them feel getting “elbowed out” at property portals: their listings don’t get enough visibility, they get crowded out by high volume, low quality (fraudulent!) ads, etc, etc.

I know that feel, agent bro

I make it clear to the agents that while I can recommend buyers to them (if they get accepted into my panel – and no, not everyone gets accepted), it is not a replacement to property classifieds sites because fundamentally, home buyers want to look at listings. A home buyer may come to me through the DealMatcher, but you can bet your sweet ass that s/he has already looked at the property sites, and will want to look at even more (legitimate) listings through me or anyone else.

Just last week I had met up with Shen Yi, the GM of iProperty at his office at MidValley (which looked nothing like what I had imagined), and I had taken the opportunity to talk to him about those “problems”. While I am not at the liberty to disclose what we had talked about, I can assure you that the folks at iProperty are well aware of the situation, and they have got some good ideas on how to moderate the listings to filter out the bad hats so that the good one rise to the top.

Shen’s a good guy and I think that he genuinely wants to move the needle; whether we all like it or not, iProperty is the behemoth of online property, and they are in the position to do a lot of good if they want to. However, the reverse is also true. 😉

A Self-Regulating System Which Rewards The Good (And Punishes The Bad)

Google makes its money through this thingamajig called “AdWords”. These are the text ads that you see displayed on top (and sometimes the side and the bottom) of each search results page.

Internet advertising, of course, is as old as the “16.6k Dialup Modem”, “Geocities” and “mIRC”, but here’s how AdWords is different from, say, the Yahoo banner drop: the top positions don’t just get sold to the highest bidder. Apart from the bid price, the ad location is determined by a “Quality Score“, which is a measure of an ad’s “quality” as determined (algorithmically) by the ad copy, quality of the landing page, and the ‘legitimacy’ of the advertiser (which could be determined from the account history).

What this means is that a “good” advertiser will typically pay much lower for an ad (given its high Quality Score) while the “bad” ones are gradually getting weeded out as price per clicks get too expensive for them to stay in business. In the end: everybody wins – the searcher, the (legitimate) advertiser, and of course, Google.

This is an example of a system which regulates itself by rewarding good behaviour and punishing the bad. When there is no more incentive for people to “game” the system, good things naturally flow to the top.

But sadly, such a system is non-existent in the property vertical; in fact there’s evidence that BAD practices get rewarded instead which means that in desperation to close more deals more agents are turning to the dark side…

Come to the dark side... we have cookies

If you’re an agent and you’ve been business for some time, then you might be familiar with one or more of these horror stories and the associated unsavoury characters:-

  • The Fisherman: “There was this dude who contacted me after he saw my ad in the newspaper, and he asked me 1,001 questions about the property. After a few email exchanges, I grew suspicious, and did a quick Google on him. I found his LinkedIn profile, and it confirmed my suspicions… he was an agent fishing for my stock.”
  • The Faker: “I got calls from this buyer who asked me to send him pictures of the property that I was selling. He stopped answering my calls after I emailed him the pics. Then I saw the pics in a listing at a property site… with his phone number as the watermark of course. He was an agent.”
  • The Undercutter: “There’s this agent who seems to troll me every time I post a listing. He would post the same listing but at 10-20% cheaper than my prices. Worse, he would use my description word-for-word. I don’t believe it.”
  • The Thief: “I was co-broking with this agent, and the deal went through. She insisted that we do the deal through her agency, which was fine by me. Then she stopped returning my calls. I later found that she called my buyer directly, made a deal with her and gave her a kickback. I was furious as hell.”
  • The Bait-And-Switcher: “If you’re familiar with (area removed), then you’ll see this agent’s stock being advertised everywhere… newspapers, classifieds sites, you name it. He’s possibly the biggest bait and switch scammer around… he doesn’t have the stock, and we all know it.”

The home buyers who come through the DealMatcher routinely tell me that they got in touch because they are tired of the shenanigans that these bad apples pull on them. It is clear as day to me that the entire system is going to the dogs, and as any good engineer would tell ya, if it’s broken, go fix it. 😉

GoodPlace’s Raison d’etre

Well, I ain’t gonna pretend to know how to fix this shit, because I don’t.

What I do know is that I am able to reach out to home buyers through this blog (we hope to exceed 100,000 users monthly by end of the year if not sooner), and through the DealMatcher, I can “control” the home buying process by qualifying both the buyer and the agent. (Yes, I’ve been known to refuse working with certain home buyers as well – this is an article for another time).

So for now, I’ll focus on doing just two things: (1) build up this blog’s readership, and (2) process incoming DealMatcher requests and help home buyers, one at a time. Everything else is secondary. (This is also why you don’t see me doing things like building up our Facebook page, going around to give guru talks, etc etc… I’d rather remain focused).

And of course, when we receive enough traction then we’ll go the full nine yards, assemble a killer team and start kicking some major butt…

#SeeWhatIDidThere

#SeeWhatIDidThere

What’s In Store For The Next Half Of 2014?

Last week a reporter chap from The Edge came over for a future feature on GoodPlace (I’ll let you know when it’s out), and during the 1.5 hour interview we had talked about GoodPlace.my’s traction buildup since its launch last year. We both noticed a rather strong correlation between happenings and trends in the property industry with the traffic levels at GoodPlace –

GoodPlace.my traffic

Our traffic indicators show that demand is picking up ahead of the second half of 2014. Yee-haw!

As GoodPlace.my is building up traction levels near critical mass, we are fairly confident that our stats will be reflective of that of the industry as a whole. Consumer interest has been picking up rapidly after Chinese New Year, and with new launches now are already piling up the pipeline for the second half of the year, we should also see a reverse in the decline of transaction volume since the beginning of 2014 (fingers crossed!).

Smarter developers are fast-tracking their projects to exploit this window of opportunity (cough, Eco World, cough) – at least until GST kicks in (scheduled for April 2015, but we should start feeling the jitters end of the year) during which another trough of sorrow will hit the industry. Don’t say we didn’t warn ya 😉

About Khai Yin

When I am not writing for GoodPlace.my and helping my readers find properties though the DealMatcher service, I spend time doting on my three kids: Wenyi, Qinyi and Eian. My personal stuff, some published essays and contact details can be found at khaiyin.com

Comments

  1. Collecting so much of info and publishing it for free is a great deed for the society.It is the beginning of new era for consumers rather than following the herd.Keep up the good work.Can wait to work with good agent.Tonnes of appreciation Khai YIn.

  2. Such is the nature of the industry that practitioners carry such a negative perception in their daily work. It is such a pity because there are enough quality agents around. The public needs also to be educated to stop feeding these fly-by-night-short-term-hooligans merely to save a ringgit or two. It is a classic penny wise pound foolish situation. Venure into Penang and you will vomit blood and the sheer number of brokers. The current initiative to register all negotiators is surely a move in the right direction. Now if only the enforcement were as driven as some motormouthed politicians…..

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