Agents shouldn't take on dual roles

http://www.straitstimes.com/ST%2BFor...ry_439463.html

October 8, 2009 Thursday

Agents shouldn't take on dual roles


RECENTLY, I tried to buy an HDB flat from the resale market. I found out I had to pay a 1 per cent commission (of the total resale price) to the agent who represented the seller. Even when I said I did not need a property agent as I could file all the documents with the HDB, the seller's agent insisted that he represented me as well. This means he collects 2 per cent from the seller and 1 per cent from the buyer.

Is this not a conflict of interest? Whom will the property agent represent if there is a dispute between the buyer and the seller?

Some agents try to circumvent this by stating the name of a colleague or partner as the buyer's agent on the option to purchase form. Is this against the law?

I also tried to buy a resale condominium. The seller's agent was not willing to entertain my agent as the commission scheme is different from the HDB's, that is, the seller pays the buyer's agent, and the buyer does not need to pay his agent.

In my case, the seller's agent told my agent that if I wanted to buy the unit, my agent would have to 'co-broke', that is, share the commission with the seller's agent even though the latter did not contribute anything to close the sale.

Later, I was shocked to learn that my offer of $690,000 was rejected although the unit was sold for $688,000. This was a direct buyer's sale, that is, the seller's agent also represented the buyer and collected the full 1 per cent commission instead of having to 'co-broke' with my agent.

In cases like these, how are buyers and sellers' interests protected?

Kwok Yoke Pui (Ms)

This is what the new regulatory agency must act severely against.

It's an absurd practise that is illegal in 1st world countries.

It's shady.

Quote:

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Originally Posted by louisebrown

This is what the new regulatory agency must act severely against.

It's an absurd practise that is illegal in 1st world countries.

It's shady.

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Singapore never claimed to be 1st world. Ahahahhahhaha! Your writing style looks so familiar, I swear you have been spending loads of time bitching on the internet over the past few years. Go back to your expat forum to bitch. You know which one.

http://www.straitstimes.com/ST%2BFor...ry_439816.html

October 9, 2009 Friday

Conflict of interest when agent represents buyer and seller


I REFER to Ms Kwok Yoke Pui's letter yesterday, 'Agents shouldn't take on dual roles'. The practice of sellers paying 2 per cent and buyers 1 per cent of the transaction price of an HDB resale flat arose because the distinction between a seller and a buyer is unclear.

By representing both the seller and the buyer, an agent will be unable to show that he got the best price for either party, which is his fundamental duty.

The agent can offer only to perform an administrative service to handle the documentation, but that service should not be tied to the transacted price, because no matter at what price the flat is sold, the amount of administrative work would be the same. Furthermore, this offer of administrative service cannot be forced on the buyer.

The HDB conducts seminars on resale transactions in English and Mandarin for both sellers and buyers. Anyone interested to attend can register at HDB's website.

Patrick Sio

http://www.straitstimes.com/ST%2BFor...ry_439946.html

October 9, 2009 Friday

1 agent for buyer, seller: OK, but get written consent


WE REFER to Ms Kwok Yoke Pui's letter yesterday, 'Agents shouldn't take on dual roles'. Housing Board flat sellers and buyers need not engage estate agents for their resale transactions, although there are benefits in doing so, such as leveraging on an agent's network for expeditious sales or purchases.

A buyer and seller in a transaction should be represented by separate agents to avoid a potential conflict of interest.

While an agent should act and collect commission from only one party, the buyer or seller, it is also acceptable if the buyer and seller in a transaction agree to have the same agent represent them.

The agent should preferably obtain the written consent of both parties; the same should apply to two agents from the same company who are acting separately for sellers and buyers in the same transaction.

Both the seller and buyer should be aware and agree to such an arrangement.

Agents should not insist on representing buyers to obtain a commission, failing which they would not accept any offers to buy on behalf of the sellers.

Such a position is an ethical breach that we do not condone.

We urge Ms Kwok to send us the details of the agents who acted for her so we can look into the matter.

Dr Tan Tee Khoon
Chief Executive Officer
Singapore Accredited Estate Agencies

http://www.straitstimes.com/ST%2BFor...ry_441290.html

October 13, 2009 Tuesday

Commissions and property agents


I AM writing in response to last Friday's letter, '1 agent for buyer, seller: OK, but get written consent', by Singapore Accredited Estate Agencies (SAEA), in reply to my letter on Thursday, 'Agents shouldn't take on dual roles'.

I would like to thank SAEA for the prompt response. I also noted an online debate on my letter in The Straits Times discussion board and I am glad the public is taking note of this issue.

First, I would like to clarify that I am not referring to an isolated incident, but a rampant practice or 'open secret'. My focus is not solely on the agent who acted for me, but rather all the agents I have contacted so far.

I met at least 15 of them (from different property firms) during viewings and spoke to many more on the phone. They would first establish if I am an agent or a buyer, and the tone usually becomes much friendlier when I say I am a buyer. They all have the same message: that I must pay them 1 per cent commission because they need to represent me.

Some participants in the ST discussion board thought I was not willing to pay the 1 per cent commission. I would like to clarify that I am most willing to pay. The point is, I want to pay the agent who is representing me, not the seller's agent. This is because in cases of dispute (not necessarily legal) such as agreeing on the HDB's first and second appointment dates, both sides' interests should be represented by different parties.

SAEA's advice on the agent getting written approval from both the seller and buyer is not practical because even before you are allowed to view the flat, the seller's agent will have stated such terms very clearly. And once you view the unit and you wish to make an offer, the agent will once again tell you that you need to engage him as your agent before he relates your offer to the seller.

'Agents should not insist on representing buyers to obtain a commission, failing which they would not accept any offers to buy on behalf of the sellers,' wrote SAEA. 'Such a position is an ethical breach that we do not condone.'

These are statements I fully understand but the question remains: What if they still insist and I desperately like the unit?

I understand that buyers can choose not to purchase the unit or look for their own representing agents, but past experience tells me I will never be able to even view a good unit or close the deal, even though I may offer the highest bid, because the seller's agent can still choose not to disclose to the seller the highest offer, but rather the offer from other buyers who are willing to engage him for the purchase of the same unit.

Also, relating to the bid for a condominium unit at $690,000, we knew the sale was closed only when my agent called the seller's agent to check on the status two days after our offer. It was only much later we discovered that the unit was sold at a lower price.

That said, I do not see the need to disclose the details of the agents who acted for me because this involves more than one agent and probably most agents. I suggest SAEA do a mystery caller test, that is, call any agent who has listed a property for sale and pretend to be a buyer. Tell the agent you do not want him to represent you and you will understand what most buyers are going through.

I just wish that clearer rules and better-defined ethical codes of conduct could be put in place soon to stop these practices and close any loopholes.

Kwok Yoke Pui (Ms)

I like the HK system, where buyer and seller pay their respective agents.
There will then be no conflict of interest.

buy what u like and can afford. why think so much after losing e deal:doh:

http://www.straitstimes.com/ST%2BFor...ry_441773.html

October 14, 2009 Wednesday

Sellers can try mystery caller test to check on their property agents


WE THANK Ms Kwok Yoke Pui for her Forum Online letter yesterday, 'Commissions and property agents'.

The Singapore Accredited Estate Agencies' (SAEA) position expressed in an earlier letter last Friday ('1 agent for buyer, seller: OK, but get written consent') was that if sellers and buyers wish to appoint estate agents to assist them in their HDB resale transactions, they should be separately represented by estate agents of their choice to avoid a situation of conflict of interest.

An estate agent should act and collect commission only from one party to the transaction, who could either be the seller or the buyer. We had then suggested an exception to permit dual agency if the sellers and buyers are both aware and consent to the appointment of the same agent, preferably in writing. Such a practice, including separate agents of the same agency acting in the same transaction, for example, can be found in some states of the real estate industry in the United States.

The Ministry of National Development has since announced its proposed regulatory framework for public consultation on Oct 12, and the issue of dual agency, especially for HDB resale transactions, will be adequately addressed.

We shall channel Ms Kwok's feedback to the ministry. Meanwhile, we would offer her suggestion of a 'mystery caller test' to sellers who have appointed estate agents to represent them in their HDB resale transactions. Sellers can administer this test to ferret out instances when their appointed agents refuse to entertain offers presented by prospective buyers who do not intend to use the latter's services.

Dr Tan Tee Khoon

Chief Executive Officer

Singapore Accredited Estate Agencies

http://www.straitstimes.com/ST%2BFor...ry_441776.html

October 14, 2009 Wednesday

Property agent's priority is to get the best price


IT IS good to examine why the 'one agent representing buyer and seller' situation happens only in the HDB resale market and not the private property market.

The difference between an HDB resale and private property is that in the latter, once the parties agree on the selling price, the sale is concluded after the legal searches and transfer of titles are carried out. In an HDB resale, the agreed price is not conclusive. The HDB needs to give consent. Obviously, there is more administrative work to do after the agreement on price is inked.

However, administrative work is independent of price. Therefore, when the agent wants to charge an administrative fee that is pegged to a percentage of the agreed price, it gives a wrong impression that he is being rewarded for getting the best price.

I often hear property agents say that HDB resale flats are lower in price compared with private properties, and therefore deserve a 3 per cent commission for the fee to be sizeable to co-broke. If a private property sells for $1 million, the commission of 2 per cent is $20,000, and in a co-broking situation, each agent gets $10,000. For an HDB resale flat selling for $300,000, a 2 per cent commission comes up to $6,000 and is unattractive for co-broking.

However, I must reiterate that a property agent's fundamental duty is to get the best price for the party he represents. Earning a fee for other aspects of work like running advertisements, walking potential clients and fixing appointments are duties expected of a property agent, but they come after his fundamental duty to get the best price.

Before the authorities implement any control over the issue, I suggest that if a buyer is interested to make an offer to the seller, he can do so with or without the agent present. This is so as not to lose out because the seller's agent insists on the buyer engaging his administrative services. The agreement between the seller and his agent should have provided that the the latter be entitled to his commission even if it was the seller who closed the deal.

Patrick Sio

http://www.straitstimes.com/ST%2BFor...ry_442745.html

October 16, 2009 Friday

How we sold our flats without using property agents


I AM writing in response to Ms Kwok Yoke Pui's letter on Tuesday, "Commissions and property agents".

Ms Kwok said: "I would like to clarify that I am most willing to pay (the 1 per cent commission). The point is, I want to pay the agent who is representing me, not the seller's agent."

If this is so, perhaps Ms Kwok should appoint an agent and let the agent take her for viewings before deciding to view any unit. Commissions are agents' income. If one buyer has to call 15 agents from different property firms for viewings before deciding to put in an offer, can you imagine how difficult it would be for an agent to close the sale and get his income?

Agents make it clear to buyers that they have to pay a commission before viewing. This is better than asking the buyer to pay after the sale has been concluded.

With regard to the bid for a condominium unit at $690,000, if the buyer gives only a verbal offer without any cheque, the seller is open to accept any offer with a cheque, even if it is lower than the verbal offer. Besides, there could be other factors that the seller considers in accepting a lower offer.

I sold my unit previously without engaging any agent. The first buyer offered $450,000, the second buyer offered $460,000, but he wanted me to declare $470,000 in the Sale and Purchase Agreement with a separate letter indicating the actual sale price. I rejected the higher offer.

My sister-in-law recently also sold her HDB flat without engaging an agent. The first buyer offered only $15,000 above valuation, while another buyer offered $18,000 above valuation. But my sister-in-law turned down the higher offer because the bidders looked unfriendly and spoke to her in a very commanding tone.

I think rules can be enforced by law, but ethics is individual.

Koh Siew Buay (Ms)