The problem in same-agent property brokerage

http://www.straitstimes.com/Review/E...ry_445917.html

October 24, 2009 Saturday

The problem in same-agent property brokerage


THE National Development Ministry's draft plan to regulate real estate brokerage includes a radical suggestion to prohibit an agent from acting for both seller and buyer in HDB resale transactions. This is to eliminate scope to subvert the willing-buyer, willing-seller process by demanding commission from the buyer, usually 1 per cent of the price, or to keep the seller in the dark about the best offer if the bidder would not pay commission. The ministry says this is unacceptable, a conflict of interest. Those who have been victims will argue it is worse than that: The practice breeds dishonesty, and it has the perverse effect of making the agent care largely for himself in securing maximum commission. If a practice is liable to bring the trade into disrepute, it should be discarded.

There is no disputing that the public will favour a separation of agent functions. Real estate firms should warm to the idea, too, as it will shore up battered public confidence. Their income derived as a percentage of their agents' fees will not be reduced if the current fee guidelines are retained in a segregated system. It is anticipated an accreditation board urged on the trade by the ministry will set the fees. Agents might have to contend with the remote prospect of reduced earnings, but better this than to carry with them a collective stigma.

The downside of separating functions is that it could introduce trade rigidities and some inconvenience to consumers. Many a foreign jurisdiction permits an agent to act for both parties, with no incident. That is because rules of licensing and censure set by the realtors' governing body are clear; they are observed faithfully; and the trade is fastidious about preserving ethical standards. They have the public's confidence. In Singapore, duality of function has created a problem because ethical standards were never high to begin with, assuming the common run of agents understood the ethics of responsible dealing. The poor image could be improved under proposals to subject agents to a standardised examination and accreditation by the industry board, which in turn will be answerable to a statutory authority which will have powers of censure for ethical and licensing breaches.

If segregation is desirable, it should be legislated. Setting it as an industry guideline will lead to fanciful interpretations and endless disputes. A prohibition is more practical than the ministry's parallel suggestion of retaining duality but permitting an agent to charge the buyer a fixed fee for the paperwork done. This assumes commission from the buyer is outlawed. But where dubious ethics is abetted by consumer ignorance, having any fee 'fixed' is no guarantee against abuse.

http://www.straitstimes.com/ST%2BFor...ry_447576.html

October 29, 2009 Thursday

Barring same-agent property brokerage not practical


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

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

Quote:

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Originally Posted by mr funny

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

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its perfectly ok for an agent to represent both party at the same time ..IF agent acts professionally ..

often agents representing seller who sets a ridiculous high selling price of a future value.. are afraid to even tell seller that AT CURRENT MARKET, the selling price is too high.. for fear of losing the seller client..

in USA, realtor( agent) can act for both simultaneously .. but professionally ..

if seller is being ridiculous with pricing, trying to sell at future value or too much above current value, the agent will advise the buyer to 'walk away' and try to look for something somewhere else with a FAIR current value..

unfortunately in spore .. its not the case ..
if the selling price set by seller is too high, instead of educating the seller, agent ask buyer 'Whats your budget?"
thats pissing buyers off..

the system should educate agents to act professionally, on whats FAIR VALUE FOR CURRENT MARKET, and not doing everything to please sellers..and not be afraid to walk off if seller is being unreasonable ..

at the same time ..to the sellers ..if you really think your property is that good..and can command a higher value..wait till it reaches there ..then you sell ..and not try to sell now when the value is not there yet ..

Professionally or not, there is conflict of interest, nothing else needs to be said...

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Originally Posted by proud owner

its perfectly ok for an agent to represent both party at the same time ..IF agent acts professionally ..

often agents representing seller who sets a ridiculous high selling price of a future value.. are afraid to even tell seller that AT CURRENT MARKET, the selling price is too high.. for fear of losing the seller client..

in USA, realtor( agent) can act for both simultaneously .. but professionally ..

if seller is being ridiculous with pricing, trying to sell at future value or too much above current value, the agent will advise the buyer to 'walk away' and try to look for something somewhere else with a FAIR current value..

unfortunately in spore .. its not the case ..
if the selling price set by seller is too high, instead of educating the seller, agent ask buyer 'Whats your budget?"
thats pissing buyers off..

the system should educate agents to act professionally, on whats FAIR VALUE FOR CURRENT MARKET, and not doing everything to please sellers..and not be afraid to walk off if seller is being unreasonable ..

at the same time ..to the sellers ..if you really think your property is that good..and can command a higher value..wait till it reaches there ..then you sell ..and not try to sell now when the value is not there yet ..

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Quote:

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Originally Posted by Regulators

Professionally or not, there is conflict of interest, nothing else needs to be said...

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so Lee HL and HO C NO conflict of interests ?


they claim to be professional ...

and the whole singapore accepts that ..

that is politics, a different ball game. We adopt westminster style of government but then our constitution is fundamentally flawed as we do not seem to have seperation of powers.

Quote:

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Originally Posted by proud owner

so Lee HL and HO C NO conflict of interests ?


they claim to be professional ...

and the whole singapore accepts that ..

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I think most people will be at least a buyer and seller once in their lifetimes. Naturally they will hope to have an agent that acts in their interest at that point in time of purchase or sale. The world is round, you gain something, someone else loses.

When an agent's fee is based on a percentage of the selling price, I don't see why he would advice anyone to offer a lower price???

Definitely conflict of interest.

Quote:

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Originally Posted by kurby

When an agent's fee is based on a percentage of the selling price, I don't see why he would advice anyone to offer a lower price???

Definitely conflict of interest.

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that boils down to professionalism ...

if only you see how realtors act in USA .. very fair and professional ..
they would advise buyer to 'walk away' if the sellers are unreasonable ..

they use market value of the location, + condition of house and compare to similar houses on sale in the area ..and produce a fair value ..and present to buyer ..

unlike here ... seller set high high .. cannot sell ..scold agent useless ... in the end agent also want to sell high high to please seller ...

as an agent .. in a bull market .. you want seller ...more than buyer ..
so who you think they will please ?

so seller + buyer + agents all have to be professional ...

I think different culture differnet ways of handling an issue.

In US, people happily tip for good service, but that won't work in SG.

In SG, I think , monetary gain is a huge motivating factor....

Quote:

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Originally Posted by proud owner

so Lee HL and HO C NO conflict of interests ?


they claim to be professional ...

and the whole singapore accepts that ..

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similar illogic as the one uttered by little Lee... "People support CPF cuts because there are no protest outside parliament."