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. Continue reading →
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