IT IS heartening to learn that the court dispute between PropNex and Mr and Mrs Loh Yi Min has been settled amicably.

We can learn something from this incident. When a property agent undertakes work for either the seller or the buyer or both, he does it for a remuneration. It is therefore only correct that the type of work to be carried out by the property agent be properly described in the document most property agents require their clients to sign before he starts work.

The document is often called the commission agreement and it records how the property agent is to be remunerated.

The Housing Board conducts public briefings on:

• Policies and procedures relating to buying and selling of flats;
• Financial planning for buyers and procedure for HDB and bank loan; and
• Option to purchase.

According to the HDB, it invites a guest speaker from the CPF Board to talk about use of CPF funds to buy resale flats. The next talk for which seats are still available is on July 5.

For more information, visit www.hdb.gov.sg, Home Owners, Selling Your Flat, HDB Resale Seminar.

Given that the HDB makes public the requirements in the resale process, the role of the property agent can be limited to connecting the seller and the buyer if the two parties handle the documentation themselves.

Perhaps the remuneration, often fixed at 2 per cent of the agreed price for the seller and 1 per cent for the buyer, can be broken into two distinct components:

The first, which can be percentage-based, is for connecting the parties and arranging the best price for either party; and

The second is for handling documentation, attending appointments and reminding parties of their obligations.

In that way, even if the buyer has to pay the property agent, he is clear that he is paying for services that are not related to getting him the best price, if the property agent also represents the seller in the same transaction.

Patrick Sio

Source : Straits Times - 10 May 2008

PROPERTY company PropNex is dropping its lawsuit against a couple who refused to pay the seller’s agent the 1 per cent commission after buying a home.

Both sides reached an agreement after a mediation session on Tuesday, which PropNex said yielded a ‘win-win’ conclusion. They declined to disclose the terms of the settlement.

If the case had gone to trial, it would have turned the spotlight on the contentious issue of whether home buyers should pay a fee to sellers’ agents.

PropNex associate director Ricky Low Yong Sern, who was the only agent handling the sale of a terrace house in Whampoa last year, had sought about $4,000 in commission or a service fee from the buyers, marketing specialist Loh Yi Min, 29, and his wife Ariel Wee, a 33-year-old polytechnic lecturer. 

The couple bought the house - built over 30 years ago and classified as a Housing Board flat - for $400,000 in April last year. They did so without hiring an agent.

According to court documents, PropNex’s Mr Low claimed that he had provided services to them.

But the buyers refused to sign the commission agreement, saying they had not agreed to pay him a fee.

PropNex chief executive Mohamed Ismail said of the first such lawsuit initiated by his company: ‘It has been amicably settled, so we are withdrawing the case. PropNex initiated this on the grounds that a fair amount of work has been done by the agent to start off with. This negotiated settlement takes into consideration both parties’ views.’

Ms Wee, however, called for rules requiring property agents to state clearly what services they were providing independent buyers that would justify the commission.

‘And we really need to see whether the same agent can represent both the buyer and seller - it’s a complete conflict of interest,’ she added.

The issue of commissions payable by buyers who deal without agents has been hotly debated in recent years. The law does not fix agents’ fees, but most property sellers pay their agents a commission of 2 per cent of the selling price, while buyers foot 1 per cent.

Many agents marketing HDB flats also charge independent buyers a 1 per cent fee, but this is not practised for transactions involving private property.

This difference, say agents, comes from the lower prices of HDB flats, which translates into a lower commission. The sale of HDB flats involves more paperwork, they add.

Disputes arise when sellers’ agents tell independent buyers about the commission only just before sale papers are signed.

Agents, on their part, say independent buyers often leave the sellers’ agents to handle the paperwork but refuse to pay a service fee.

Source : Straits Times - 8 May 2008

JONES Lang LaSalle (JLL) is poised to re-enter the Singapore residential project sales business after a hiatus of about seven years.

It has clinched appointments to market Floridian, a 336-unit freehold condo development in Bukit Timah by Far East Organization and Wing Tai Holdings, as well as Lippo’s Centennia Suites at Kim Seng Road.

It is also marketing 34 units at the completed 99-year leasehold Amaryllis Ville condo in the Newton area on behalf of Goodearth Hotel group of Australia. Goodearth - controlled by the family of the late Teo Lay Swee, who used to own the Cockpit Hotel site - bought the 34 units from the project’s developer, Wing Tai, about two years ago and is expected to sell the units for about $1,500 per square foot (psf).

JLL will focus on the upper end of the Singapore residential market, rather than the mass market. ‘As well as marketing Singapore residential projects here, we’ll market them through our international office network,’ JLL managing director (Southeast Asia) Chris Fossick said in a recent interview with BT.

‘I believe that with an increasing number of overseas buyers in the local market, the benefits of an international marketing campaign will grow in importance. We believe we can stay ahead of the game because we already have successful residential project sales businesses in Hong Kong, Jakarta and London, and a large presence in India, China, Korea, Japan and the UAE - we can mine our database of international investors in these places when marketing Singapore residential properties.’

‘We believe the proportion of foreign buying in the Singapore housing market will continue to increase. Singapore is a destination for people to want to be in; it’s becoming an exciting place,’ Mr Fossick added.

He views the current slowdown in housing sales here as a temporary thing, ‘driven by sentiment, not fundamentals’.

‘The fundamentals for Singapore and Asia remain very strong. But we’re being somewhat sidetracked by the goings-on in the world credit market.’

The property consulting group will also step up investment sales of Singapore residential properties - for instance, by matching foreign property funds/ institutional investors with local developers buying land for housing projects here, or helping these investors purchase stacks of apartments in new projects.

‘The other idea we have for our residential business is to help Singaporeans who want to diversify into overseas property investments. The UK market, for instance, has been so high for so long and the currency so strong, we feel that for the last five years, UK has not been overly attractive. But that could change over the next 12 months.

‘The pound has been coming off against the Sing dollar. But I think UK home prices have to come down further, but may be in 12 months, UK property might start looking reasonably attractive.’

Helping JLL achieve some of its new business plans is Julian Sedgwick, who joined as a local director in JLL Singapore’s residential investments department earlier this year. He used to work with Chesterton London, where he marketed homes and condos in Central London.

‘He brings an international flavour, and some new ideas on how they do project sales in London versus how we do it here. He will be quite helpful to Jacqueline Wong, who heads our Singapore residential business,’ Mr Fossick said.

In a separate development, JLL regional director and head of investments Lui Seng Fatt is leaving the group. Mr Fossick confirmed Mr Lui’s departure. ‘He made a decision to move on. We’re grateful for his contributions in the success of our investment business and wish him the best on his new ventures,’ he added. Mr Lui, who is overseas, could not be reached for comment.

Meanwhile, Mr Fossick is expected to oversee the investments department. ‘We’ve got a big team; we might as well find somebody within that team to take the helm.’

Source : Business Times - 6 May 2008

BUSINESSES in Singapore are learning to tap infocomm to transform their processes and gear themselves up to take advantage of new market opportunities. An example is real estate company HSR, which pioneered a new way for its agents to help buyers find their dream home using a system called SMARTplus.

A SMARTplus programme called iMatch enables HSR agents to specify the criteria for the house they are looking for their buyers. On finding a perfect match, the system will alert the agent via SMS and send an email with more details about the property. Agents can also view the latest property listings online, with just a few clicks of the mouse.

SMARTplus also comes as a boon for the agents. They can now discuss issues, share their opinions and seek advice on the online forum, and update themselves on upcoming courses and events using the HSR eCalendar. By allowing agents to work from any location that has Internet access, the system has also enabled them to cut down on travelling and make more productive use of their time. In fact, the system has been so popular that HSR increased its recruitment of agents by up to 40 per cent with its implementation.

Like HSR, used car exporter Sunauto has also been leveraging on infocomm to reach out to customers in new and innovative ways while enhancing staff efficiency.

Sunauto exports quality used cars to various parts of the world, and has also made inroads into the parallel import market. All these have been made possible through the development of an online presence, backed by a system that automates many of its processes.

Today, instead of paper-based orders, Sunauto’s customers can order used cars online.

Through the company’s website, they can access the latest information on the used car inventory, and view the photos and specifications of vehicles.

At the same time, manual tasks such as the storage and retrieval of car photographs and other data have been automated, reducing the manpower required and cutting down on errors due to inconsistent information or missing documents. These developments have helped to free Sunauto’s manpower resources to focus on broadening its business lines and developing its regional strategy.

Like HSR and Sunauto, SMEs in Singapore can learn to leverage on infocomm to expand their market reach and tap new business opportunities.

A good starting point would be to tap the Technology Innovation Programme (TIP), which is jointly administered by the Infocomm Development Authority of Singapore (IDA) and Spring Singapore.

Calling on more SMEs to take advantage of the programme, Lo Yoong Khong, Cluster Director, IDA, said: ‘If you have an innovative idea on how infocomm can better your business, make use of the support from TIP to turn it into a reality. Through the adoption of infocomm, businesses can make a difference in the way they operate. Infocomm can relieve them of the operational challenges they face daily, and allow them to focus on sourcing for new markets and business opportunities.’

This article is contributed by the Infocomm Development Authority of Singapore (IDA)

Infocomm public education for SMEs

The Technology Innovation Programme (TIP) supports SMEs in infocomm innovation projects and helps to defray up to 50 per cent of the qualifying cost. TIP can also defray up to 70 per cent of the qualifying cost for industry-wide projects.

Source : Business Times - 6 May 2008

I REFER to the Saturday Special report, ‘Rodeo realtors’ (April 19).

While the number of complaints is of much concern, it should be noted that they are committed by errant agents from a few companies.

As realtors deal with high value-added services, it is unfortunate that many of these complaints have invoked strong reactions.

For all intents and purposes, most practitioners realise they need to uphold the professional code of ethics and conduct to ensure long-term success in their profession.

These complaints are further compounded by the fact that, unlike in most developed countries, there are presently no well-defined laws regulating real estate practice in Singapore, an industry which is neither fully regulated nor totally deregulated.

I am of the opinion that self-regulation, in the context of the local consumer culture, operates optimally only within the framework of a well-crafted legislation for both real estate companies and agents.

Any private regulatory initiatives in a highly competitive industry are almost impossible unless there is adequate support and appropriate power to champion the best interests of consumers.

In appointing their agents, consumers should ensure they are committed to a stringent code of practice. They must go through comprehensive and vigorous training on a continuing basis.

In addition, agencies should be equipped with state-of-the-art technology and marketing resources. They should be in a position to submit an effective sole agency marketing plan, backed by a series of guarantees for performance, service and results.

Consumers can be assured, if they do their due diligence, there are many professional advisers in the market who can meet, and even exceed, these criteria.

Patrick Liew
CEO, HSR Property Group
 
Source : Straits Times - 2 May 2008

I ENJOYED the Saturday Special package of features on the real estate sales industry (April 19).

But I was disappointed and dismayed by the statement by Dr Yu Shi Ming, head of the real estate department of the National University of Singapore (NUS), when he was quoted as saying: ‘Every time people think of real estate agents, they think ‘unscrupulous’,  ‘untrained’, ‘unprofessional’ and ‘unethical’.

My mother was upset and embarrassed after reading Dr Yu’s hurtful remark and asked if I, a real estate agent, was also unscrupulous, untrained, unprofessional and unethical.

I assured my mother I belong to the vast majority of real estate agents who abide by the core value of sales, including always trying to achieve the greatest savings for my customers and always ensuring that my customers will need to ‘move house’ only once when they relocate from one place to another.

Such deals are often complicated and require agents to have good people skills, good coordination skills, an eye for the nitty-gritty, patience and a cool head.

Most real estate agents, though poorly educated, will not say things without first thinking how the words we use will hurt the feelings of others, especially their parents.

I may not be as highly educated, but I have learnt the virtue of not making sweeping generalisations against others from my primary school teacher - who, like me, was not as well educated.

Doreen Chan (Ms)

Source : Straits Times - 2 May 2008

A COUPLE who bought a home and refused to pay the seller’s agent the 1 per cent commission are being taken to court by a property company.

PropNex associate director Ricky Low Yong Sern is seeking about $4,000 in commission or a service fee in a case that is likely to turn the spotlight on the issue of whether home buyers should pay a fee to sellers’ agents.

He was the exclusive agent handling the sale of a terrace house in Whampoa built over 30 years ago and classified as a Housing Board flat.

Marketing specialist Loh Yi Min, 29, and his wife, polytechnic lecturer Ariel Wee, 33, bought it for $400,000 in April last year. They had acted on their own without engaging an agent.

In documents submitted to court, Mr Low claimed that he had a right to collect a commission as he had exclusive rights to market the property. He also claimed that he had provided services to the buyers.

However, the couple refused to sign the commission agreement when they inked the sale last year. They claim they had made no deal to pay him a fee in the first place.

Both sides will attempt to reach an agreement when they attend a court dispute resolution session next month.

This is the first lawsuit of its kind started by eight-year-old PropNex.

The issue of commissions payable by independent buyers, or buyers who deal without agents, has been hotly debated in recent years.

While there is no law fixing the fees payable, property sellers typically pay their agents a 2 per cent fee, while buyers pay their agents a 1 per cent fee.

Many agents marketing HDB flats also charge independent buyers a 1 per cent fee, but this is not practised in private property deals. Property veterans said this disparity was due to the lower prices of HDB flats, which amount to a lower commission for agents.

Some independent buyers have complained that sellers’ agents inform them that they have to pay a commission just before the purchase documents are signed, leaving them with little time to find out about their rights.

Once the buyers sign the commission agreements, they are bound to pay the fee.

However, agents have countered that independent buyers often leave the paperwork to the sellers’ agents but refuse to pay a service fee.

Major real estate agencies contacted by The Straits Times have varied responses to such situations, although all maintain that independent buyers of HDB flats should pay a fee.

HSR property group chief executive Patrick Liew said his company takes three to four independent buyers to the Small Claims Tribunal each year for similar claims and has won payment each time.

ERA Singapore’s assistant vice-president Eugene Lim said his company does not take independent buyers to court when no commission agreements are signed.

Meanwhile, the Consumers Association of Singapore has, in recent years, questioned the practice of agents taking commissions from both buyer and seller in the same transaction, citing a possible conflict of interest.

Source : Straits Times - 29 Apr 2008

The consumer watchdog wants to reduce the growing number of complaints against property agents and real estate agencies. So it is developing a CaseTrust Accreditation Scheme for the industry.

This could be introduced by the middle of 2008. Estate agencies who wish to apply and attain the CaseTrust status will be subjected to a more stringent criteria.

The scheme will also raise the requirements for an individual to attain the estate agent licence.

Market players support the move and they hope that a panel of experts can be engaged to oversee any disciplinary action when rules are flouted.

Patrick Liew, CEO, HSR International Realtors, said: “There must be a very comprehensive set of ethics and conduct so that there is a basis for disciplinary process.

“And I think the process must not only come with penalty system, I hope they also come up with a reward system. In other words, for companies who do very well, they can either be issued certificates or extra points.”

The CaseTrust scheme will also put in place the necessary mechanisms to settle disputes. It also aims to ensure that property agencies are accountable for the actions of their agents.

However, industry players are worried that there may be too many schemes doing exactly the same thing.

For example, the Singapore Accredited Estate Agencies and Institute of Estate Agents both run their own accreditation programmes. And they will have to be streamlined to avoid duplication.

Some property agents also hope that authorities will introduce legislation to make the CaseTrust scheme compulsory.

Mohamed Ismail, CEO, PropNex, said: “It has to be 100% mandatory for all real estate agencies and agents to be accredited. If you only have 50% accredited and 50% not, a consumer is not going to see some of the properties that are being marketed by non-accredited agents, when all consumers want the best property at the best price.”

Industry players said complying with the new scheme will add to business cost as there may be a need to upgrade existing infrastructure and skills of the agents. However, they do not expect the cost increase to be too significant. - CNA/vm

Source : Channel NewsAsia - 26 Apr 2008

COMPLAINTS against real estate agents are rising. According to the latest statistics, more than 1,000 reports have been lodged with the Consumers Association of Singapore and the Inland Revenue Authority.

I am puzzled why little has been done to eradicate the presence of unethical agents who offer wrong advice and short-change buyers and sellers in a booming sector.

It is time the industry is revamped.

Real estate licences are issued to applicants meeting minimum standards. While it is good to allow many to own and operate real estate agencies, there are few criteria to ascertain their “quality”.

For example, there is no control in the number of agents each agency is allowed to recruit. Size does not always equate with excellence.

Furthermore, real estate agents are not considered employees but associates of the respective agencies. This creates even more weakness from the point of performance standards and control.

In developed economies such as the United States, Canada and Australia, real estate agencies must treat all agents as employees instead of associates.

From the legal perspective, this means that if agents commit any malpractice, the agency will be penalised as well.

Agencies in Canada, for example, even blacklist and post offenders’ names on the Board of Real Estate websites and bulletin boards to alert consumers.

Perhaps, we should adopt this practice.

I would also like to propose that the size of each agency be restricted to a ratio of one manager to, say, seven Ceha-certified (Common Examination for House
Agents) agents.

In essence, the authority should be empowered to implement stricter penalties, such as revocation or suspension of real estate licences and a longer jail term for those guilty of real estate crimes.

We need to act now to rebuild the spirit of and trust in the real estate industry.

Raymond Ng

Source : Today - 18 Apr 2008

Real estate agents may be accredited under a new scheme, if the Ministry of Finance (MOF) gives the go-ahead.

Two industry watchdogs - the Institute of Estate Agents (IEA) and Consumers Association of Singapore (CASE) - are joining hands to start a new accreditation scheme and they plan to submit a proposal to MOF in the middle of the year.

They believe compulsory guidelines will help improve the professionalism of the real estate industry.

James Chua had planned to buy a 4-room HDB flat, in the Admiralty area, valued at about S$260,000. He was willing to pay only S$12,000 in cash over valuation (COV).

But he was told that another buyer had already made a similar offer, and that was when his agent came up with a “suggestion”.

“She (property agent) said if (I am) willing to pay S$10,000 COV and S$2,000 commission to the selling agent, then (I) can still buy the flat. I was taken a back. Isn’t that not representing the best interests of the seller? I find that highly unethical and lacking integrity. I said I won’t do it but my buying agent said if you are still paying S$12,000, then what’s the big deal. That was when I started to suspect that they are in this deal together,” said Chua.

Chua had since bought another flat through a new agent. But he had reported the incident to the Inland Revenue Authority, which is the licensing body for real estate agencies. Chua hopes more can be done to better regulate the industry.

Last year, over 1,000 complaints were filed against property agents.

The IEA said this is about 40 percent more than 2006, partly due to the property boom.

Said Jeff Foo, president of the Institute of Estate Agents: “All these years, we hear consumers complaining about unethical agents, agents not knowing their job. And at the end of the day, nothing is done about it. The agents get away with it scot-free, because they are not regulated.

“The best thing is to legislate. If taxi drivers and security guards are all licensed, why not real estate agents? Real estate agents deal with about the largest investment of some consumers.”

IEA said it can only take disciplinary action against agents who are its members. If found guilty, rogue agents will be blacklisted and will not be able to work for another real estate agency.

It estimated that there are some 30,000 real estate agents in Singapore, and only 1,500 of them are IEA members.

Under the new proposed accreditation scheme, new agents must be trained under the National Skills Recognition System (NSRS).

NSRS is a national framework for establishing work performance standards and certifying skills acquisition, implemented by the Singapore Workforce Development Agency.

Existing agents are expected to upgrade themselves and pass the Common Examination of House Agents. There will also be provisions to punish errant property agents.

For now, the onus is on consumers to do their homework. They can run a check on their agents on IEA’s Central Registry System, or ask to see the agent’s Practicing Certificate.

From May, agents will have to submit the checklist to HDB, together with the resale application. This is to ensure all procedures are transparent. - CNA /ls

Source : Channel NewsAsia - 15 Apr 2008