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)

Source : Straits Times – 13 Oct 2009