By Various Guest Contributors
Our last article Is the CEA Being Fair to Property Agents? touched off a raw nerve in Propwise.sg readers – I received a number of lengthy emails debating the points made in that article, particularly on whether individuals should be free to transact their own properties or be forced to engage an agent, and more broadly on whether agents add value in the buying, selling and renting process. I’ve selected three of the better argued pieces to publish, mainly representing the perspective of the individual investor and consumer.
Individuals should be free to buy whatever they please (at their own risk)
An individual in transacting his/her own property sales and purchases need not be held to the high competency levels that professional real estate agents do because they are not paid for the service they provide (to themselves). So they bear the full gain of their own judgement and negotiation and save on agent fees, but they also bear the full consequences of their personal misjudgment.
The same is true of all other forms of investments, even insurance products. Professionals earning an income from advice given have to be certified and qualified to do so, and are held to high regulatory standards and demands, while individuals are free to buy whatever they please (at their own risk) even if they are clueless about the instruments.
Janelle Tan, co-founder and Managing Partner of Dunn & Partners Pte Ltd, is a licensed estate planning practitioner who provides consultation to families and businesses on wealth protection, preservation and transfer. She also runs financial literacy seminars and workshops on an invite basis. She may be contacted via email at email@example.com
Absurd to prevent consumers from transacting their own properties
I appreciate the value of the articles written in the Singapore Property Weekly and they are a good read. But I have some comments on the recent article Is the CEA Being Fair to Property Agents? The writer stated that agencies should lobby to the Government to “restrict” people from transacting and renting their own properties to lift the professionalism and levels of ethical conduct of the sector.
I feel this is totally absurd. Isn’t this anti-competitive? For example (just for wackiness), maybe I should also ask the Government to “force” people to engage a hair stylist to do their hair, because if they cut their own hair they will screw it up and become a national embarrassment in the eyes of foreigners.
If things go wrong, consumers will address it via other means and channels. People should be free to choose, and as always, it’s caveat emptor. People who choose not to be represented by an agent (be it buy, sell or whatever side) would have to grapple with the consequences of their decisions. This has nothing to do with whether they are cheated or not. In the event they are cheated, then they have to address it themselves too!
Much has also been said about the “work” done by property agents, and the subjective value that they bring to clients on both the buy and sell side. We shall not go into the ethical issues regarding the conduct of agents – the CEA was set up for this very reason!
I nearly fell off my chair when I read in the article that “the industry is taking two steps back by allowing consumers to carry out their own transactions.” Two steps back? The CEA was set up to “catch” the bad actors and instill professionalism into this profession.
Another avid property investor
Singapore agents add less value compared to their regional peers
I hope my views can be shared with the Propwise.sg readers. Nobody cares more than you when it comes to your money. I am a property investor with investments in various countries and Singapore agents add relatively less value compared to their brethren in other countries.
I have tried to use property agents many times and they have plenty of tricks up their sleeves to get themselves appointed as an exclusive agent, instead of figuring out a strategy to help you market your unit. When I was based overseas and could not market the unit myself, I engaged an agent who claimed to specialize in commercial property, but after two months and with no results I had to take things into my own hands to advertise the property myself, and ended up still having to pay the co-broke agents who brought in the customers to rent my industrial property.
Agents are often just gatekeepers rather than facilitators
I wonder why should I pay the co-broke agent when I did all the work of showing and advertising but unfortunately the tenants were lazy and engaged agents for their services, not knowing that some agents are gatekeepers, meaning they swing customers to properties that make them the highest commission or where they do not need to share commission.
In another situation, I tried to engage the same agent who brought in my previous tenant for my residential property after the lease expired. In two months, the agent only did three viewings and did not even know the real market price. I decided to DIY by advertising and dropping flyers and mailers. Within a month, I got about 20-plus viewings and managed to rent the unit out.
While doing this, I checked some online property portals and found that the majority of agents basically get exclusive marketing agreements for three months from consumers and just inform their network to let the co-broke agents do their advertising while the exclusive agent basically does nothing except consolidate viewings once per weekend for co-broke agents to bring in customers.
So, in this case do you think agents are worth what they are paid? Very often, they are gatekeepers more than facilitators. So choose your agent wisely.
Do agents add any value?
When Person of Interest mentioned the example of property agents checking for cracks, it made me laugh because most of the time in Singapore, the new owners will renovate the unit they buy so checking for tile cracks is unimportant, and it is better to bring in a plumber because the biggest problem is water leakage from the false ceiling. My question to the agents: are they trained to check for technical and plumbing defects in order to add value to the consumer? Also, do they help owners do a staging to add value to the property? The answers to these questions are obvious for more than 90% of the agents I’ve come across.
In the Internet age, intermediaries who do not add value will die a natural death, so agents should ask themselves how they can add value so customers will go to them, instead of asking why customers can DIY. The reason why customers DIY is obvious – the value provided by the agents is often not worth the commissions they earn.
Finally, engaging a good conveyancing lawyer is important as they will tell you what to check before doing a handing over. I have never seen agents rolling up the carpets to check for cracks before.
Eddy S., an avid property and financial markets investor