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Thread: HDB resale: Sellers' market or agents'?

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    Default HDB resale: Sellers' market or agents'?

    July 7, 2007

    HDB resale: Sellers' market or agents'?


    RECENT newspaper articles have highlighted the sky-high prices of some HDB resale flats, especially those around Tiong Bahru.

    When my friends learnt that a five-room flat had been sold for $720,000, their first reaction was: 'What a lucky seller!'.

    My response was: 'What a lucky agent!'

    The seller's agent usually gets 2 per cent of the price of the flat, while the buyer's agent pockets 1 per cent.

    So why did I envy the agent? Anyone who has responded to a property ad in the classifieds knows that, invariably, the first question asked is: 'Are you buying for yourself?'

    Agents, not unlike taxi drivers, pick their customers. And it is understandable because a seller's agent who acts for the buyer gets 1 per cent more. In the case of the lucky Tiong Bahru agent, $7,200 more!

    The question is, what if there was another buyer willing to pay $750,000 but had his own agent, or refused to use the seller's agent? Between getting $21,600 in commissions by selling at $720,000 and $15,000 by selling at $750,000, the choice is obvious.

    I urge flat sellers to attend HDB's monthly resale seminar, where they will learn that they do not need an agent to handle the paperwork. HDB will help. Save thousands on commission and get better furniture for the new home.

    Recently, my fiancee and I went to view a flat. As our combined income was slightly above the income ceiling for getting a concessionary loan, we told the agent we would appeal. She suggested that we declare only one party's income, saying that she knew others who had got away with this.

    We went on to the topic of price. The agent told us the valuation of the flat was $260,000 and the last offer was $320,000. We bid $290,000 and went home, thinking that was the end of it.

    That night, the agent called and informed us that the valuation was actually $255,000 and the last offer was $295,000. '$300,000 will seal the deal,' she enthused.

    Luckily we were not flush with cash from selling a private property en bloc. What if we had bid $325,000?

    That said, there are property agents with a conscience.

    My point is, anyone can handle an HDB resale transaction, and HDB will help you every step of the way.

    Chia Kok Chin

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    Default Re: HDB resale: Sellers' market or agents'?

    Anyone know what's the going rate (% commission) for agents handing documentation only i.e. owners market themselves and only need agent to take care of documentation?

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    Default Re: HDB resale: Sellers' market or agents'?

    July 11, 2007

    Lawyer wasn't allowed to DIY flat purchase


    I REFER to Mr Chia Kok Chin's letter ('HDB resale: Sellers' market or agents'?'; ST, July 7) where he urged flat sellers to attend HDB's monthly resale seminars so that they could handle their own transactions and save on commissions. The trouble is that property agents will not allow you to do so.

    About three years ago, I responded to an ad in ST. I made an appointment with the agent to view the flat. I decided to purchase the flat and paid a $1,000 deposit. After signing the option, I was given a contract to sign, appointing the agent as my agent. When I protested, saying that I did not need an agent, he said that as I had no agent, he had become my agent. He told me that it was the practice. I checked with other agents, and they told me the same thing. As a lawyer, I could easily handle the resale transaction myself.

    Maybe the Housing Board could advise buyers as to how they can handle their own purchase transaction without having to incur costly agency fees.

    Leong Chooi Peng (Ms)

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    Default Re: HDB resale: Sellers' market or agents'?

    July 11, 2007

    Don't begrudge agents their commissions


    I AM writing in response to Mr Chia Kok Chin's letter, 'HDB resale: Sellers' market or agents'?' (ST, July 7).

    While the frustration he faced in looking to purchase an HDB apartment is understandable, it is unfortunate that he discredited the service that real-estate agents provide.

    It is a fact that anyone can handle an HDB resale transaction, and there are resources at hand to help one do just that. However, not many rise to this challenge because of time constraint arising from busy work schedules.

    Besides advertising, the agent's job entails answering endless telephone calls from prospective buyers as well as agents, coordinating and setting up viewing schedules, follow-up calls, price negotiations and not forgetting doing the sales pitch repeatedly until the deal is sealed, and finalising all the paperwork.

    In a good market like the present, it takes weeks to seal a deal but in a bad market, months and sometimes even close to a year.

    Those who fret about the seemingly exorbitant commissions should remember that these real-estate agents were there when the going was tough and deserve to recoup lost income or savings in this current sellers' market. It is not a crime when they earn more commission in a buoyant economy. It is, after all, a job with no fixed income and lots of uncertainty. It is basically survival of the fittest for many, if not most of the agents.

    There are rotten apples in every profession. Sadly, there are even cases of lawyers disappearing with their clients' money. But we do not worry unduly that every other legal adviser would be capable of the same act.

    Likewise, one would not conclude that it is better to self-medicate when disappointed with the services of a general practitioner. Rather, one would find a more competent GP.

    The same should apply when selecting a real-estate agent. Other than having a conscience, there are real-estate agents who provide a valuable service.

    Phyllis Christe (Ms)

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    Default Re: HDB resale: Sellers' market or agents'?

    July 14, 2007

    Why you need a competent agent to handle your property transactions


    I REFER to the letter, 'HDB resale: Sellers' market or agents'? (ST, July 7), and concur with the writer that you can sell a property without an agent and, therefore, save on commission.

    However, to succeed, the seller needs to be competent in real estate marketing, legal, financial aspects, and other knowledge and skills.

    This is important because you need to negotiate with increasingly sophisticated buyers. You need to outperform competitors, use latest technologies and stay ahead of the fast changing market.

    To achieve the best results, you need to be constantly updated on market conditions, including past data and reliable projections. You need to review and compare similar houses that are currently in the market, especially those that have been sold or not sold in the past six months.

    In a technology-driven market, you must use technologies that will provide you with powerful, timely, and accurate information to make better-informed decisions. These expensive tools are absolutely necessary and you need to go through proper training and guidance to use them correctly to enhance the results.

    It is important to manage the marketing process correctly. This includes organising the marketing campaign, handling phone calls, qualifying buyers, conducting viewings, organising open houses, negotiating prices, completing the paperwork and closing the sale.

    You must be prepared to respond to every phone call, including prank calls and calls from competitors, property sightseers and nasty buyers. In addition, you may have to conduct viewings of your house without advance notice and at your inconvenience.

    Negotiation is a sophisticated skill that will contribute to the success of your sale. To do so, you need to suppress your emotions to prevent conflicts, handle unreasonable criticisms and respond to buyers' whims and fancies.

    You must protect yourself against unscrupulous buyers. You need to also protect yourself, your loved ones and personal belongings as you will be serving many strangers in your house.

    From the above information, you can see that saving on agents' commission may not cover the expenses needed to market your house successfully. In addition, you need to invest a lot of time, energy and effort. By taking yourself away from your work and other endeavours, you will also incur unnecessary opportunity costs.

    That's why you need an agent - not just an ordinary agent - you need a professional and competent specialist, equipped with the best tools and working as a part of the largest team in the industry to serve you and lead you to success.

    Patrick Liew Siow Gian

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    Default Re: HDB resale: Sellers' market or agents'?

    July 14, 2007

    Do your own selling? You'll end up 'losing' more


    AS A property agent, I'm writing in response to the article, 'HDB Resale: Sellers' market or agents'?' (ST, July 7), in which the writer gives an example of a lower commission received by the seller's agent even though the price offered through another agent is higher.

    Logically, Mr Chia Kok Chin seems to be right. But in reality, it's not the case. Think again, using his example of a buyer with his own agent willing to offer $30,000 more than another offer of $720,000 from a direct buyer.

    In the upmarket sector, almost all good units are sold above valuation which requires cash, which means the extra $30,000 is definitely cash (and not a loan). Would any buyer in his right mind pay $30,000 more cash when he could simply have offered to compensate the seller's agent $7,500 for the loss of commission if he's using his own agent? Of course, he could have even saved this $7,500 by just using the seller's agent. For me, I am simply open to the sellers I serve, and they are usually happy to compensate me that 1 per cent (for example, $7,500) out of the additional price (for example, $30,000) they get.

    Mr Chia seems to suggest that 'thousands on commission' can be saved if the seller attends HDB's monthly resale seminar and sell their own property.

    I consider this to be a short-sighted thought. Paper-work is just one part of selling; negotiation for a better price is the important part. Who can negotiate better? A typical seller who sells one property in 3-5 years, or a property agent who sells 3-5 properties in one month?

    Agents active in the area are well-versed with the price movement on a daily basis, even before prices reach the HDB website.

    For example, when a seller sells his own property in today's rising market and got his asking price of $300,000 from a direct buyer, he may think it is a good price because the HDB website shows the last transaction at $280,000, not knowing that another similar unit was just sold at $320,000 through an agent. As a result, while he thought he'd saved commission of $6,000 by doing his own paperwork and advertising, he in fact just lost $20,000 plus precious time on paperwork and money on advertising.

    Why pay yourself $6,000 to do paperwork when you could have pay yourself $20,000 to do nothing?

    In a nutshell, we are just earning a decent living.

    Lester Tan Chee Yong

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