Property agents to be regulated

http://www.straitstimes.com/Prime%2B...ry_438194.html

October 5, 2009 Monday

Property agents to be regulated

Measures to include monitoring body and dispute resolution

By Jessica Cheam


THE Government is moving quickly on a plan to regulate real estate agents in the wake of growing calls to improve the standards of the industry.

The Straits Times understands that an independent body will be set up and chaired by a neutral party appointed by the Government. It will also house a dispute resolution centre to mediate between agents and consumers.

Key agency bosses, industry associations and individual agents have already met with Government officials to discuss the reforms.

The proposals, which could be made public in the next month or two,will likely require that agents sit a compulsory exam and that all accredited agents be monitored through a central database run by this independent body.

This will mean that errant agents will no longer be able to switch agencies easily, as they can now. Currently, agents fired from an agency for dodgy activity can just switch to another firm.

There are also suggestions that agents will have to buy indemnity insurance protecting customers for losses resulting from negligent or unethical conduct.

While the Government has in the past maintained that the industry should self-regulate, it has decided to step in due to an increasing number of complaints against rogue agents, which has occurred in tandem with Singapore's property market boom.

In February, for example, a couple successfully sued ERA Realty Network over its agents' conduct. The agents, who have since resigned from ERA, had made a profit from 'flipping' an apartment they were supposed to sell for the couple.

The Consumers Association of Singapore (Case) received 1,100 real estate-related complaints last year, 1,113 in 2007 and 991 in 2006. This year, it received 619 complaints from January to August.

Case executive director Seah Seng Choon told The Straits Times this week that the proposed measures were long overdue.

'There is a need to ensure a proper standard of practice so there aren't abuses in the industry,' he said.

Mr Seah is pleased that a central dispute resolution centre will be set up to help consumers and agents settle rows.

Although a clearer picture of the proposed reforms has emerged, two big questions remain: Are agents going to be individually licensed, and who else will be involved in running the independent body?

There are now two industry bodies - the Singapore Accredited Estate Agencies (SAEA) and the Institute of Estate Agents (IEA)- but it is not compulsory for agents to join either. While both associations are involved in the review process, discussions are ongoing as to their specific role in the independent body.

Industry observers note that some of the associations' existing functions may become redundant in light of the new regulatory framework.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that ideally, agency bosses, many of whom advise the current industry bodies, should not be involved in this new independent body, as they might resist the reforms or have a conflict of interest.

'The priority now is to put in place a system that can permanently remove errant agents from the industry so they think twice about behaving unethically,' he said.

Agency heads say they fully support the suggested reforms.

'Even if it involves more work for agency bosses like myself, I don't mind so long it makes our industry more professional and disciplined,' said C&H Realty managing director Albert Lu.

Mr Lu is one of many who back the idea of licensing not just agencies but individual agents.

'They are the ones doing the transactions, so they should be made accountable for their actions,' he said.

Knight Frank agent Peter Tan, 40, said it was a good idea to have a compulsory exam 'to give clients confidence that agents know their stuff'.

But it remains to be seen how effective the new accreditation will be, he said.

'It's the right initiative. But there are many agents who resort to unethical conduct because it's quite a tough business. We'll have to see if it is enough to deter such behaviour.'

Public consultation on the proposed reforms is due to begin this month with the findings due by December.

[email protected]

Wa.. means property agents will be richer since a lot of tom dick harry will be eliminated...

i think minimum qualification for pty agents should be 'A' levels, diploma or degree and all agents must pass either CEHA or a new qualification to be on par with the likes of a CFP. till today, any ah kao or ah neow or any jobless low-life can be a pty agent. The only way to up the status of the profession is to make entry more difficult. :scared-2:

http://www.straitstimes.com/ST%2BFor...ry_443783.html

October 19, 2009 Monday

New rules should protect property agents


I REFER to the recent debate over the regulation of property agents in Singapore ('Property agents to be regulated', Oct 5) .

As a property agent, I applaud the Government's plan to set up a regulatory framework for the real estate industry. The proposed framework seems to be protective of consumers. But what about the rights of property agents? Having been in this line of work for three years, I have seen my fair share of how 'ugly' this industry can be:

# Clients these days do not give exclusivity to property agents to market their properties. Instead, they take advantage of the resources of the agents who are hungry for their business to market their properties. This is to the advantage of the clients as they get many advertisements and awareness out of this so-called competition among property agents.

# According to Institute of Estate Agents guidelines, clients are to give 2 per cent commission to property agents for closing a private property sale transaction. But because of competition among property agents, they undercut one another by agreeing to a lower commission rate of 1 per cent.

# Real estate agencies take a cut of 10 to 30 per cent from each transaction closed by property agents. Real estate agencies should not do this as they provide little or no support to the agents. My agency is responsible only for issuing invoices after a successful sale or rental transaction. This does not justify the cut they take from our commissions.

The Government should look into the following:

# Standardise the commission rate throughout the real estate industry, so there is no more undercutting among agents. This will protect agents' right to demand their commission.

# Since real estate agencies already take a cut from each transaction closed by their agents, they should look into the welfare of their agents, for example, by providing basic health and dental benefits.

Chua Khim Leng

http://www.straitstimes.com/ST%2BFor...ry_443782.html

October 19, 2009 Monday

Zero commission? It's too good to be true


I WELCOME the proposal to regulate property agents ('Property agents to be regulated', Oct 5).

I wish to highlight an unethical practice of some property agents:

# Some agents put up advertisements claiming they take 'zero per cent commission' from sellers. This seems like a good deal for sellers, given that the market rate is 2 per cent commission. But these agents require sellers to sign an exclusive agreement lasting three months. If the seller breaks this agreement before its expiry, a penalty fee of $5,000 is imposed.

# These agents will also not be present during viewing sessions by potential buyers. They will SMS the viewing date and time to prospective buyers, and sellers will be left to handle the buyers and their agents.

# If sellers ask for $20,000 cash over valuation (COV), these agents will ask buyers for between $25,000 and $30,000 COV. If the buyer agrees to the amount, the agent will tell the seller the buyer has agreed to pay commission, and will write the commission amount on the option to purchase form and make the seller sign it.

# These agents mostly will not co-broke as they cannot take commission from the seller, so they have to scout for direct buyers to earn their 'rightful' commission, thus prolonging the sale process.

Many sellers often prematurely terminate the exclusive agreement, because of the absence of the agents during viewing sessions and the prolonged sale process.

But if this happens, the agent will lodge a case with the Small Claims Tribunal, demanding $5,000 as compensation as the seller has broken the exclusive agreement. Most sellers do not want further trouble and end up paying the $5,000.

Sellers should not blindly sign an exclusive agreement, no matter how 'good' the offer. Remember, there are no free lunches in this world.

Jason Sim

Since property agents to be regulated and licensed individually, there should not be a need for an agent to belong any property company unless they choose to. May be self-employed agents are more trust-worthy than those belonging to company (as the latter need to pay the company a big cut from their commission and hence get less and tend to find other ways to up income).

Quote:

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Originally Posted by mr funny

http://www.straitstimes.com/Prime%2B...ry_438194.html

October 5, 2009 Monday

Property agents to be regulated

Measures to include monitoring body and dispute resolution

By Jessica Cheam


THE Government is moving quickly on a plan to regulate real estate agents in the wake of growing calls to improve the standards of the industry.

The Straits Times understands that an independent body will be set up and chaired by a neutral party appointed by the Government. It will also house a dispute resolution centre to mediate between agents and consumers.

Key agency bosses, industry associations and individual agents have already met with Government officials to discuss the reforms.

The proposals, which could be made public in the next month or two,will likely require that agents sit a compulsory exam and that all accredited agents be monitored through a central database run by this independent body.

This will mean that errant agents will no longer be able to switch agencies easily, as they can now. Currently, agents fired from an agency for dodgy activity can just switch to another firm.

There are also suggestions that agents will have to buy indemnity insurance protecting customers for losses resulting from negligent or unethical conduct.

While the Government has in the past maintained that the industry should self-regulate, it has decided to step in due to an increasing number of complaints against rogue agents, which has occurred in tandem with Singapore's property market boom.

In February, for example, a couple successfully sued ERA Realty Network over its agents' conduct. The agents, who have since resigned from ERA, had made a profit from 'flipping' an apartment they were supposed to sell for the couple.

The Consumers Association of Singapore (Case) received 1,100 real estate-related complaints last year, 1,113 in 2007 and 991 in 2006. This year, it received 619 complaints from January to August.

Case executive director Seah Seng Choon told The Straits Times this week that the proposed measures were long overdue.

'There is a need to ensure a proper standard of practice so there aren't abuses in the industry,' he said.

Mr Seah is pleased that a central dispute resolution centre will be set up to help consumers and agents settle rows.

Although a clearer picture of the proposed reforms has emerged, two big questions remain: Are agents going to be individually licensed, and who else will be involved in running the independent body?

There are now two industry bodies - the Singapore Accredited Estate Agencies (SAEA) and the Institute of Estate Agents (IEA)- but it is not compulsory for agents to join either. While both associations are involved in the review process, discussions are ongoing as to their specific role in the independent body.

Industry observers note that some of the associations' existing functions may become redundant in light of the new regulatory framework.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that ideally, agency bosses, many of whom advise the current industry bodies, should not be involved in this new independent body, as they might resist the reforms or have a conflict of interest.

'The priority now is to put in place a system that can permanently remove errant agents from the industry so they think twice about behaving unethically,' he said.

Agency heads say they fully support the suggested reforms.

'Even if it involves more work for agency bosses like myself, I don't mind so long it makes our industry more professional and disciplined,' said C&H Realty managing director Albert Lu.

Mr Lu is one of many who back the idea of licensing not just agencies but individual agents.

'They are the ones doing the transactions, so they should be made accountable for their actions,' he said.

Knight Frank agent Peter Tan, 40, said it was a good idea to have a compulsory exam 'to give clients confidence that agents know their stuff'.

But it remains to be seen how effective the new accreditation will be, he said.

'It's the right initiative. But there are many agents who resort to unethical conduct because it's quite a tough business. We'll have to see if it is enough to deter such behaviour.'

Public consultation on the proposed reforms is due to begin this month with the findings due by December.

[email protected]

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Not all buyers and sellers are saints.

http://www.straitstimes.com/ST%2BFor...ry_444169.html

October 20, 2009 Tuesday

Real estate agencies deserve their cut


I REFER to yesterday's letters by Mr Chua Khim Leng ('New rules should protect property agents') and Mr Jason Sim ('Zero commission? It's too good to be true').

The Institute of Estate Agents was advised by the Competition Commission of Singapore to remove its commission guidelines in June last year. In the commission's view, the guidelines are 'harmful to competition, restricting competition in both fee levels and fee structure in the real estate industry, and likely to have the object of appreciably restricting competition among real estate agents in the real estate agency market'.

The commission guidelines were officially removed in September last year. Mr Chua's suggestion to standardise commission rates is not tenable as it is anti-competitive.

Agencies are at liberty to set their own fee guidelines and compete with each other on value propositions to their clients. This is where agents play a key role in adding value to the services provided.

Mr Chua's gripe that estate agencies should not take a cut of 10 to 30 per cent from each transaction closed by property agents because the agencies provide little or no support to agents may not be universally true.

Besides office space and administrative support, agents benefit from the estate agencies' branding, listings, regular training and business networks with developers as well as corporate clients.

As agents are not individually licensed by the authorities, they operate under the auspices of the agencies through an associate agreement and the latter are vicariously responsible for the actions of the agents.

Taking a cut of an agreed percentage from the agent's commission in each transaction would not be an unreasonable business practice as agents can negotiate contract terms with the agencies they wish to join including the relevant percentage cuts.

Agents who collect 'zero commission' from sellers and yet require them to sign an exclusive agreement, in Mr Sim's example, continue to have professional duties towards the sellers to co-broke whenever necessary in the interests of their clients. The agent's professional obligations to the sellers are not set aside simply because he has decided to waive the payable commission.

Dr Tan Tee Khoon
Chief Executive Officer
Singapore Accredited Estate Agencies Ltd

http://www.straitstimes.com/ST%2BFor...ry_447575.html

October 29, 2009 Thursday

How new rules can protect property agents


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)

http://www.straitstimes.com/ST%2BFor...ry_449876.html

November 4, 2009 Wednesday

Why property agents should act for only one party


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