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When most people hoping to buy or sell second-hand houses are worrying about fraud committed by property agents seeking high commissions, people in Nanjing are finding a safe and cheap alternative.

 

The 600-square-meter exchange space, which opened in Jiangsu Province's capital city on Tuesday, is the first housing market where people buy and sell second-hand houses without dealing with property agents.

 

"We make sure that the housing information published in our exchange market is 100 percent true," said Fan Yijun, manager of the exchange market. "The only fee that they need to pay for the services provided by the market is 800 yuan (US$100)."

 

That is much less than the 1.4 percent commission charged by property agencies in Nanjing.

 

The market, located in Zhongyangmen, the northern part of the city, opens 60 service windows for clients to help them with five key services the check of property rights, guidance in signing contracts, property right certificate transactions, mortgage and loan requests and property management transfers.

 

The market, under the direct leadership of the Nanjing municipal government, uses professionals to guard against "problems with housing information." Such problems often deal with houses closed down by juridical decree, houses without the clearance of mortgages or houses on the waiting list to be demolished by the government.

 

The market's first day saw five transactions and more than 600 home owners expressed interest in using the market to sell their properties.

 

The purpose of providing this new service for the second-hand market is to avoid property agent malpractice, Fan told China Daily.

 

It is common for some property agents, especially in small agencies, to overcharge commission, offer false housing information and overcharge buyers while pocketing the difference, Fan said.

 

It causes more and more people to avoid hiring property agents when they want to trade on a house, but on the other side of the coin, some people would feel unsafe to trade on a house directly.

 

"It's the right time for the birth of this new type of transaction," Fan said.

 

After both sides agree to the negotiated prices, they can choose to trust the market to complete procedures such as applying for loans and mortgages from banks and transferring the property rights, which costs 800 yuan, or they can handle it themselves.

 

Meanwhile, the market has integrated nearly all of the necessary resources. It has two service counters from banks to deal with the mortgage and loan, two guarantors who offer credit reports to banks, two legal firms and two notaries public.

 

"Unlike property agents, we don't need to step out of this exchange market and can finish the whole transaction within it," Fang said.

 

Though Fan told China Daily that this new exchange market will stand for a long time in Nanjing and will become popular among people, some property analysts do not believe this new model will shock the foundation of the existing property agencies.

 

"Most of the large property agencies leave no room for their employees to adopt malpractice," said Zhang Tao, a senior analyst with Shanghai Centaline Property Agency Ltd.

 

(China Daily June 23, 2006)