Property agent did not follow standard guideline when requesting commission

[mr funny]

June 1, 2007

More sign on as property agents to cash in on boom

Number of new hires has doubled at some agencies from a year earlier

By Fiona Chan, Property Reporter


THE continuing boom in home prices is proving profitable not only for property sellers and speculators, but also for property agents.

Many brand-new recruits with no previous experience are now jumping into the market in the hope of making a quick buck from the current boom.

This has led to property agencies around the island beefing up their army of agents, with some doubling the number of recruits from a year ago.

DTZ Debenham Tie Leung, for instance, has signed up nearly 500 new agents since January - twice that in the same period last year.

It now has 2,500 agents in its resale division, said Mr Thomas Lee, the unit's executive vice-president.

Another agency, OrangeTee, said agent numbers have gone up by a third to about 1,200 now.

'Today, we average 50 or 60 new agents a month, compared with 30 or 40 last year,' said Mr Steven Tan, the executive director of OrangeTee's residential division.

Knight Frank, on the other hand, has almost doubled its entire agent force.

It took on 300 agents over the last year, bringing its total team to slightly over 650, said Dr Tan Tee Khoon, the director of Knight Frank's associates division.

Not all of the firm's recent hires are new to the industry.

Many are former agents who eased out of home sales during the property downturn, but who are now back in business as active agents - which often means closing at least one deal a year.

With the property market going at full steam, it has become a lot easier to broker a deal now than two or three years ago, said Mr Marcus Chu, senior vice-president of ERA Singapore, who oversees the firm's agent recruitment.

'Right now, properties are easier and cheaper to sell,' he said.

Growing buyer demand means that agents now take a shorter time to sell a property, so they can spend less on marketing it.

ERA's agent numbers have grown by about 20 per cent over the last year, Mr Chu added.

They now weigh in at more than 5,000 registered agents and more than 2,000 active ones.

Its new hires come from diverse and sometimes unexpected backgrounds.

Apart from the usual retirees, salespeople and administrative staff, ERA counts among its new agents a former hairstylist and a former civil servant.

An increasing number of white-collar professionals are also taking to real estate, said Dr Tan of Knight Frank.

'We have a good number of mid-career professionals joining us from IT, marketing, insurance and even a couple of former lawyers.'

Another agency, PropNex, has taken on teachers, accountants, and even an actor, said Mr Eric Cheng, its senior division director.

The firm, which added more than 1,000 new agents in the last five months, recorded a 40 per cent jump in sign-ups compared with the same period last year.

PropNex is also recruiting more staff with university degrees. The number of agents with a degree has risen 15 per cent in the first four months of this year over last year, it said.

The agency also said its agents' success rate has increased. One out of every three new agents can close a deal in their first month on the job, compared with one out of every six previously.

Mr Cheng recounted the story of a 23-year-old polytechnic graduate who earned a $137,000 commission on a single sale in her second month. He has also seen agents make more than $1 million in commission a year.

But most agencies warned that new agents should not expect to make huge profits immediately.

'We tell totally brand-new agents with no experience that from six months to a year, they may have to live off their savings,' said Dr Tan. 'This is to caution them against this lofty, illusory idea that because they are in real estate, they make big money straight away.'

Added Mr Cheng: 'I always say that if you want to be serious in real estate, you must have $10,000 in your bank to fuel the first three to six months.'

[email protected]

[mr funny]

June 9, 2007

Minimum professional competence and standards must be maintained in real-estate industry


PLEASE refer to the report, 'More sign on as property agents to cash in on boom' (ST, June 1).

The report highlights the increased number of unqualified agents in recent months because of the rapidly rising property market. While we welcome the growth in the industry and improved earnings of agents, we need to maintain a minimum level of professional competence and standards in the real-estate industry. To this end, we strongly advocate agents and agencies to seek accreditation under the Singapore Accredited Estate Agencies (SAEA) scheme. The scheme has the participation of major industry players as well as government agencies involved in the real-estate industry. All our accredited agencies have been told that their agents will need to pass the Common Examination for House Agents (CEHA) by Dec 31, 2008 before they are accredited.

Discerning buyers and sellers will recognise that agents from SAEA-accredited agencies can provide better and more reliable service as they need to comply with the code of conduct and practice required under the accreditation scheme. We encourage consumers to engage the services of agents from accredited estate agencies for greater certainty.

More information is available on our website at www.saea.org.sg.

Manisah Jalil (Ms)

Secretariat

Singapore Accredited Estate Agencies

[mr funny]

June 14, 2007

Property agent did not follow standard guideline when requesting commission

I REFER to the article, 'Minimum professional competence and standards must be maintained in real-estate industry' (ST, June 9).

The report highlights that due to the rapid rising property market, buyers and sellers are encouraged to engage the services of property agents from accredited agencies.

However, in a recent incident, I was looking around to lease a condo unit and happened to meet an agent from Knight Frank.

I was told that I could rent the unit for $2,800 and I was appalled when the agent wanted me to give her commission of one month for signing a two-year tenancy agreement.

I questioned her whether it is IEA's standard guideline to do that as, from my understanding, for any rental above $2,500 a month, I as a tenant do not need to pay any commission to the agent.

I refused to rent the unit from the agent and went on to rent another house from another agent from ERA at $2,600 a month.

This agent told me that I do not need to pay commission as the rental is above $2,500 a month and the agent will just need to collect commission from the landlord.

Why is there a difference in commission standards?

I sent a letter to IEA, and I was told that the Professional Fee Standard Guideline is a 'Recommended' Guideline but not mandatory,

I called Knight Frank and was told that for rentals above $2,500 a month, I as a tenant do not need to pay commission. However, when I sent a letter to its manager, I was given the impression that it does not restrict its agents in negotiating commission with clients.

My burning question is this: Can agents opt not to follow IEA's Standard Guideline?

What kind of protection is there in place for buyers, sellers, landlords and tenants if agents do not have to follow the guidelines?

Stephen Neo Poh Chuan

[mr funny]

June 16, 2007

Professional conduct of property agent not in question


I REFER to the letter, 'Property agent did not follow standard guideline when requesting commission' by Mr Stephen Neo Poh Chuan (ST Online Forum, June 14).

We have in fact responded twice to Mr Neo to clarify that Institute of Estate Agents (IEA) guidelines are recommended and not mandatory on matters of commission, which Mr Neo also learnt from IEA.

It was thus a matter of negotiation between the agent and the client for which the client has absolute sovereignty in deciding whether to accept and pay for the services of the agent.

If for competitive reasons another agent chose not to accept commission from Mr Neo, we do not think an adverse conclusion should be drawn against the one who wanted to charge him for services rendered. Hence, our professional conduct is not in question here.

Finally, we would like to assure�our clients that we remain diligent in presenting�our commitment, dedication and focus towards serving them in their real-estate needs.

Dr Tan Tee Khoon

Director

Associates Division

KF Property Network

[mr funny]

June 21, 2007

Agent should not have demanded commission as monthly rent over $2,500


I REFER to the letter, 'Professional conduct by property agent not in question' by Dr Tan Tee Khoon (ST Online Forum, June 16).

The Institute of Estate Agents (IEA) has created a set of professional fee standard guidelines which it says are recommended but not mandatory.

Dr Tan makes a valid point that for competitive reasons, an agent may choose not to collect commission from a tenant, and this is acceptable to me. But the point here is that under the its guidelines, the IEA recommends that property agents collect commission from both landlord and tenant if the tenancy is below $2,500 a month.

However, why is it that at both houses I went to, one at $2,800 and the other at $2,600, the agent from Knight Frank wanted me to pay an additional commission when it is not stated in the IEA guidelines that I have to pay her?

And since the IEA says it recommends that property agents follow its guidelines but it is not mandatory, it goes to show that what the Knight Frank agent did is not in accordance with industry standards.

From my understanding, the IEA guidelines are just a recommendation, so anything outside their scope is considered not recommended. And since the IEA does not recommend it, why does an accredited agency like Knight Frank still want to 'protect' its agent by saying it gives its agents free rein in negotiating commission?

Does this mean that in future, if I want to rent, lease, buy or sell, I am at the mercy of property agents who do not follow the IEA professional fee standard guidelines?

Stephen Neo Poh Chua