I AGREE with the latest efforts to regulate property agents . Having retired after being a managing director of two housing agencies, I am privy to the many unseemly practices of unscrupulous property agents.

Needless to say, I had to terminate the employment of some of these agents when their unsavoury practices came to light.

Besides adding an ethical component to the housing agents’ certification, I believe setting a minimum educational benchmark is quintessential, for example, a minimum prerequisite of three O-level credits, like what DTZ has set for its agents.

This would enhance the agents’ ability to discern correct work ethics when it concerns substantial amounts of monies being paid by unsuspecting parties.

Palanisamy Ramadas

Source : Straits Times – 4 Nov 2009

I REFER to last Thursday’s Forum Online letters by Mrs Teresa Yao (‘How new rules can protect property agents’) and Mr Teo Kueh Liang (‘Barring same-agent property brokerage not practical’).

Both writers have highlighted the plight of the majority of ethical property agents, whose image has been tarnished by a small group of unscrupulous and dishonest agents.

In any profession, it is impossible to completely wipe out the bad hats. Therefore, after an acceptable standard of practice has been established, understood and made into law, non-compliant practices should be punished.

In any property transaction, the two most important parties are the seller and the buyer. They must enter into a legally binding contract in order for the sale to go through. It is therefore natural that we facilitate the interests of the seller and the buyer first.

The interests of the property agent come after those of the seller and the buyer, as his role can come into being only after he has been appointed.

The terms of appointment, that is, what the agent can or cannot do, for example, must be expressedly agreed between him and the one who appoints him, so that there is no ambiguity that leads to future problems.

When the Ministry of National Development puts into law a system for the seller, the buyer and the property agent, it must separately examine the relationship between the seller or buyer and the property agent, from the relationship between the seller and the buyer. If the seller or the buyer chooses to hand the responsibilities over to his agent, he must adequately reward the agent.

To protect his own interests, the property agent should act for only one party and not both.

Patrick Sio

Source : Straits Times – 4 Nov 2009

I REFER to the Institute of Estate Agents’ letter last Saturday, ‘New rules for estate agents: Ethics just as important’.

Singapore Accredited Estate Agencies agrees that ethics is key to the real estate agency profession which has been rife with complaints of errant agents and doubtful practices. At the same time, it is our belief that ethical conduct is developed fundamentally through the estate agent’s education. Right behaviour stems from right learning in the concepts of law, marketing, salesmanship, government regulations and general real estate matters.

Even ethics can be taught as a code of professional conduct and modelled by sterling examples of ethically competent estate agents who have imbibed sound values and are financially successful.

We support the proposed regulatory framework in that every estate agent will have to pass an industry entrance examination before he can be accredited to practise. Estate agents also have to stay relevant on the job by compulsory continuing professional development courses. This is recognition that sound estate agent education will produce competence and desirable professional conduct.

Dr Tan Tee Khoon
Chief Executive Officer
Singapore Accredited Estate Agencies

Source : Straits Times – 3 Nov 2009

WHY do some property agents insist on a commission of 2 per cent from the seller and 2 per cent from the buyer, and accuse others who accept less of undercutting?

Till today, most agents will tell you it is standard. However, that 2+2 formula was when HDB flats changed hands at well below $50,000. It was to compensate agents for losses compared to private properties, which was then 2 per cent from the seller only, as they did about the same amount of work.

Incidentally, the cheapest private properties in Serangoon Gardens went for about $300,000. See the gap?

In the past 10 years, HDB prices have risen but some agents still demand 2+2 commission from unsuspecting buyers and sellers. From my observations, most who pay 2+2 commissions are illiterate HDB flat owners. The more educated ones pay only 1 per cent. I have paid less.

Lim Teck Seng

Source : Straits Times – 30 Oct 2009

I REFER to last Saturday’s editorial, ‘The problem in same-agent property brokerage’.

While I welcome and support the Ministry of National Development’s draft plan to regulate real estate brokerage, including a radical suggestion to prohibit an agent from acting for both seller and buyer in HDB resale transactions, I doubt its effectiveness in practice.

It may delay resale transactions and result in lost opportunities. Besides, there is no guarantee that co-broking or unethical practice will be completely wiped out.

The trade rigidity will inconvenience both parties – the genuine sellers and buyers – as both sides will have to wait for suitable buyers and sellers to seal a transaction.

However, if win-win solutions can be found to expedite genuine transactions, there is no dispute that the public will favour a separation of agent functions.

The underlying or radical problem emerges from the greed and dishonesty of some agents who think only of securing maximum commission. Hence, if trade accreditation can be set up speedily to enforce stricter rules of licensing and censure, as well as ensuring that all agents pass the standardised examination and accreditation, then the image of the industry will improve. This will definitely boost public confidence and trust in the profession.

Most important, the industry’s accreditation board must set high ethical standards in its code of conduct and practice for the profession.

Teo Kueh Liang

Source : Straits Times – 29 Oct 2009

I REFER to the letter by Mr Chua Khim Leng, ‘New rules should protect property agents’ (Oct 19).

As a real estate consultant for the past 20 years and running my agency in a niche market, I fully understand the plight of many real estate agents, who are disadvantaged because of the lack of rules that clients should abide by when they engage agents to handle their properties.

Many clients do not give exclusivity, as by appointing agents without signing a contract, they can take advantage of the agents’ advertisements and feedback, and then leverage on the prices received to sell direct to friends or neighbours and so avoid paying commission. These clients will also cut commission at the crucial moment of signing the option, say they will not sell or give the sale to another agent who charges lower commission.

An agent who had refrained from closing a sale quickly as the market was improving rapidly, waited and worked to achieve better offers, but was later disadvantaged because the client paid nothing if the sale was not concluded by that agent.

Other agents and buyers are allowed to cut in at the 11th hour. This undesirable situation does not support agents who work professionally and diligently in the interest of their clients.

I have some suggestions:

- Make it compulsory for clients to give and honour exclusivity, whether by written or verbal agreement.

- Appoint one or no more than two agents exclusively for eight weeks, with a termination clause of two weeks’ notice if agents do not perform satisfactorily.

- Explore means to prevent agents from being unfairly treated by clients or agencies.

- Compensate agents who have spent time, produced advertisements and conducted more than a dozen viewings, if soon after their marketing efforts, the sale is concluded through other parties (limit the period of ’soon after’).

- Give recourse to aggrieved agents to address their disputes without them having to resort to civil suits that involve time and more opportunity costs.

Clients play a part to help raise the standard and professionalism of the real estate industry. They must respect and reward agents who are reliable and competent, and appreciate that they work for a living. Of course, there are many honourable and trustworthy clients who become lifelong friends of agents.

Teresa Yao (Mrs)

Source : Straits Times – 29 Oct 2009

I APPLAUD the Government’s recent steps to improve the professionalism of the real estate industry. The market has long awaited the move to ban agents representing both buyer and seller in an HDB resale transaction.

It is also in the interest of consumers to have an accreditation scheme to sieve out unethical agents, as well as an independent tribunal to mediate in the event of a dispute.

On top of the moves and plans announced by the Ministry of National Development (MND) so far, I would argue that one reason for the high number of complaints is that the role and fee of the agent is not clear from the start of a property transaction. I suggest that MND should make these mandatory at the start of the sales process:

- Agent to walk through his role to either buyer or seller and document this; and

- Agent to communicate his fees and document them.

Another reason for the high volume of complaints is that many of the consumers who do not want to engage the services of agents are either not aware that it is possible to do it oneself, or not sure how. MND can hold more public education campaigns to show consumers how to do it oneself, although one needs to manage the marketing and paper work.

If consumers who are able and want to handle sales themselves are differentiated from those who prefer the convenience of having agents handle their transactions, it is only logical that expectations will not be mismatched, resulting in more happy consumers and a more vibrant and professional real estate industry.

Lastly, it is an open secret that many transactions are done on a co-broke basis (sometimes with unlicensed middlemen and runners). It is pertinent that the regulators take a stand on the rules of engagement with middlemen and runners, so that the licensed agents these middlemen and runners work for will have a greater need to exhibit higher standards of professionalism in the course of their business.

Ng Kwong Yee

Source : Straits Times – 24 Oct 2009