Homelink probed over unauthorized sales

Homelink Real Estate Agency Co, Shanghai's largest chain of second-hand property agents, is under investigation by the city's housing regulator for allegedly selling financial products without authorization.

A circular issued by the regulator said the probe started earlier this month, and focused on what it called "financial products" being sold to home sellers, based on allowing owners to raise cash by mortgaging properties that are to be sold.

Officials from the Shanghai Municipal Housing and Urban-Rural Development Committee are believed to have interviewed Homelink's directors on Wednesday, urging them to cooperate with the investigation.

Any Homelink outlets or agents involved in any suspected operations will be suspended until the end of the probe, the circular said, the findings of which will be made public,

Analysts and market professionals said that as demand for second-hand homes has surged in the city, and supplies of new homes have dropped, some agents have been taking advantage of sellers.

Hong Haiyan, a consultant with Shanghai Huashen Law Consultancy Firm, said she has seen a rise in the number of people seeking advice, after real estate agents had breached their contracts, often hiding details of properties being let from buyers.

"Buyers need to be 100 percent sure about key information on the properties they seek to buy, including ownership, mortgage status and the condition of the property.

"They should ensure all verbal promises by agents are put in writing and well documented," said Hong.

Nearly 184,900 square meters of new-home space were sold in Shanghai, excluding government-subsidized affordable housing, during the seven-day Lunar New Year, up from 9,200 sq m sold the previous week, according to data from property information services provider Anjuke.com.

A recent survey of 1,000 people by the Shanghai Consumer Council and Shanghai Academy of Social Sciences this month found less than 11 percent were satisfied with their property agents' services, the lowest satisfaction rate among all sectors.

Tang Jiansheng, deputy head of the SCC, said that real estate agency services need to be improved significantly. "Regulation over the sector will be tightened to avoid future cases similar to those suspected at Homelink."

wuyiyao@chinadaily.com.cn