End of self-regulation?

IT HAS been long overdue but yet it’s more than welcomed, say real estate players on news that the Ministry of National Development (MND) will begin consultations for a new regulatory framework for the real estate industry from next month.

Top on the wish-list of these real estate stakeholders is to see a licensing scheme for housing agents and the formation of a formal regulatory body which has the authority to settle disputes and reprimand errant agents. Industry players also said this may mark a shift in the Government’s long-held position that the industry should self-regulate.

National Development Minister Mah Bow Tan has hinted at mandatory regulations for the industry since March, calling the whole system “not satisfactory” and the status quo “not tenable” after the emergence of several unethical practices by housing agents.

“The industry review seeks to achieve two objectives: One, to enable consumers to better safeguard their interests, and two, to increase the professionalism of the real estate industry,” said the MND in a press release yesterday.

On this point, vice-president of Dennis Wee Group Chris Koh said the industry has been “waiting for the Government to give directions”.

To Mr Koh, the most important element in the new framework would be a “stick” to punish errant agents. “I’ve heard of agents who have passed examinations, but are still unethical. What happens is if they do something wrong, and I fire them, they can just join another organisation.”

Another suggestion is to create an official body to regulate the industry, overseeing matters like enforcement and a national database of real estate agents. According to the MND, there are some 1,737 housing agencies licensed by the Inland Revenue of Singapore as of July this year. There are no official figures for the number of individual housing agents, but estimates are about 25,000 to 30,000.

“Today, if I’m a consumer and I have a complaint with an agent, I don’t know who to go to,” said president of the Institute of Estate Agents Jeff Foo.

MND said it will look at areas such as qualifications and training requirements to increase the professionalism of property agents, and an improved dispute resolution mechanism. An enforcement framework against agencies with errant agents is also being explored.

After consulting real estate professionals, MND will ask the public for feedback on its proposed new framework for the industry. The consultation process is expected to be completed by November.

Source: Today, 21 Aug 2009

Property agent review under way

Better regulation and new training and exam requirements expected

TOUGHER powers to nail dodgy operators and new ways to solve disputes with home buyers are some of the recommendations expected from a review of how estate agents go about their business.

Industry experts also expect the government appraisal to outline new training and exam requirements for agents entering the business.

The impetus for the review – the report will be made by the end of the year – has come from the real estate sector itself, with leading players lobbying the Government to look at regulating the largely fragmented industry with very low entry barriers.

The move is timely. There has been a significant rise in sales and values in recent years – and a new boom seems on the starting blocks – while complaints against errant agents have soared.

The Consumers Association of Singapore received 1,100 real estate-related complaints last year, 1,113 in 2007, and 991 in 2006.

‘All this while…there wasn’t an effective instrument to address the complaints,’ said Mr Mohamed Ismail, chief executive of PropNex and first vice-president of the Institute of Estate Agents (IEA).

‘The greatest weakness of the industry is that there isn’t a central body to regulate it. Because of this, agents flout the rules, knowing their rice bowls are not affected.’

Only companies or firms in the housing-agency business need be licensed by the Inland Revenue Authority of Singapore (Iras). There are 1,737 housing agencies and 25,000 to 30,000 unlicensed agents dealing in HDB or private homes.

In March, National Development Minister Mah Bow Tan said the status quo was ‘not tenable’ and that the whole system was ‘not satisfactory’. He said then that the ministry would review the framework for the real estate industry to help customers better safeguard their interests and increase the sector’s professionalism.

Property sector players say the main priority is to introduce a mandatory accreditation or licensing scheme for individual agents.

This would help check errant operators who switch from one firm to another after getting fired. They can even rejoin the industry right after getting out of jail.

The chief executive of Singapore Accredited Estate Agencies (SAEA), Dr Tan Tee Khoon, said agencies, once licensed, usually recruit several associates who work on an agreed shared commission.

‘Therefore, the industry ends up with more than 30,000 agents, (most) without sound understanding of real estate practice,’ he said. ‘It will be an insurmountable task for the industry to self-regulate when it has never been regulated.’

Added ERA Asia Pacific’s associate director Eugene Lim: ‘Agents are not our employees. They do not take a salary from us so the amount of control that we can exert is limited.’

Industry leaders also maintain that agents need to have basic qualifications and take a standardised exam.

There should also be a basic training syllabus laid down, said Mr Ismail.

The big agencies conduct regular training but there are many small companies that may not have the resources to teach agents, noted Mr Lim.

A sound model to resolve disputes and provide mediation and adjudication services for aggrieved parties must also be put in place, said Dr Tan.

It is not compulsory for agents to join the two industry bodies – the IEA and the SAEA – so customers may have no one to turn to if their agents are not association members, said Mr Chris Koh, director of Dennis Wee Properties.

The two associations have been vying for more regulatory clout since Mr Mah’s comments in March. Some players believe the Government should empower the associations – be it one or both – to run a central registration scheme for agents and help solve disputes. But others want a third party.

‘The associations can bark but cannot bite. The people who run them are all volunteers from the industry. We need a central regulatory authority that is a neutral party to enforce rules,’ said Mr Lim.

The National Development Ministry said yesterday that it will first consult the key players such as agency directors and individual agents apart from industry associations. A public consultation phase will follow, with the process wrapping up by November.

Source: Straits Times, 21 Aug 2009

MND regulatory framework for property agents

Ministry to launch industry and public consultation exercises from next month

(SINGAPORE) The Ministry of National Development (MND) said yesterday it will start consultations for a new regulatory framework for the real estate industry – a move that was widely welcomed.

Over the past few years, property agents here have come under fire for not having the right qualifications and for unethical practices.

In March this year, for example, Minister for National Development Mah Bow Tan said the status quo was ‘not tenable’ and the system was ‘not satisfactory’.

To tackle the problem, MND will launch an industry consultation exercise and engage various stakeholders from next month. Parties that will be consulted include industry associations, agency directors and individual agents, the ministry said.

There are two objectives: To help consumers better safeguard their interests and to boost the professionalism of the real estate industry.

This will be followed by public consultation. The entire consultation process is expected to be completed by November and key elements of a new regulatory framework are expected to be ready by December.

‘Over the past months, MND and other agencies have been studying ways to strengthen the regulatory framework, which include getting real estate agencies to take greater responsibility for the actions of their agents,’ MND said in a statement.

‘Other areas to be studied include qualifications and training requirements to increase professionalism, an improved dispute resolution mechanism and an enforcement framework against agencies with errant agents.’

MND’s move comes even as real estate agent groups here push to improve the professionalism of property agents. The industry is now largely self-regulated, but players have said the voluntary system is no longer working.

‘We have been looking forward to this consultation for a while,’ said Singapore Accredited Estate Agencies (SAEA) chief executive Tan Tee Khoon. ‘The real estate industry here has been fragmented and unregulated for a long time.’

He believes a basic regulatory framework from the government is essential so the industry can then use it to self-regulate. SAEA, for its part, has accredited about 7,000 of the estimated 30,000 property agents here.

But Dr Tan says more is needed. In particular, a dispute resolution system that can deal with complaints from the public and ensure that genuine complains against errant agents are addressed is essential, he said.

Property agencies also welcomed the consultation. PropNex, which employs more than 5,000 real estate agents here, said a central registry of agents – from which those with a black mark can be struck off – is a must.

‘We all know that the current state of affairs is not adequate,’ said PropNex chief executive Mohamed Ismail. ‘Agents who have flouted the rules at one agency can just join another now. There is no way of stopping them from practising.’

In its statement, MND said that while the government works on a new regulatory framework, individual tenants and home buyers must also exercise greater care and responsibility.

‘Working with other agencies, MND will look into various public education efforts to equip consumers with the knowledge to conduct their real estate transactions prudently and with due diligence,’ the ministry said.

Source: Business Times, 21 Aug 2009

More professionals becoming property agents as market sentiment improves

SINGAPORE: The buoyant property market in the past six months has attracted not just home buyers but also mid-career professionals who have made the switch to become property agents.

Industry watchers said there are about 26,000 housing agents in Singapore and this number is likely to go up to 40,000 if the positive market sentiment continues.

During the lull in 2008, there were less than 20,000 agents. Since February, property agencies are hiring as many as 300 new agents every month.

ERA Asia Pacific said it has about 45 per cent more new hires in the first half this year compared to a year ago.

PropNex is getting about 200 new agents a month on average this year compared to about 165 in the previous boom period in 2007.

One pull factor is the higher commissions from private property sales as property prices continue to climb. Last year, property agents made about S$5,000 per sale last year.

Eugene Lim, associate director, ERA Asia Pacific, said: “There is a transition period, meaning that there is a learning curve. People making career switches tend to be very focused and learn very quickly.

“Once they are on the job and if they do property sales, an average per month is currently about S$6,000 to S$7,000. For private property rental, which some new people start off with, you can get average of S$3,000 to S$4,000 for a deal.

“The slightly more experienced ones will have higher volume because they are more established in the market. It’s not uncommon to see a top producer in the company doing in the region of about S$50,000 to S$100,000 a month.”

Mohamed Ismail, CEO, PropNex Realty, said: “We had one agent who has been in the airline industry. She was a senior crew for almost 19 years with our national carrier. She felt she might be retrenched and that’s what prompted her to come in attend our courses in the month of February and March.

“She started in end-May and in the last 2.5 months, she closed transactions worth about S$87,000.

“If I look at those who are fully committed, even for newbies in the industry, earning an annual income, a conservative estimate of S$60,000 a year, is not a difficult task.

“When I break S$60,000 in 12 parts of a year, it’s S$5,000. Imagine for a month of 30 days and the agent serves one client, selling a 4-room HDB house and either downgrading or upgrading to another house will give him a decent commission of S$5,000 to S$7,000.”

Property agencies said they are also seeing more professionals with post graduate qualifications joining the industry.

Mr Lim continued: “In 2007, when the country had full employment and market was surging, we attracted people with short-term perspectives. This time, we are attracting quite a number of people who are higher qualified, making a mid-career switch. So they tend to be diploma or degree holders. Some even hold masters degrees.”

Overall property sales are on the increase. Transactions of HDB resale flats were up 50 per cent in the second quarter this year compared to the three months before it.

The number of new private homes sold in the second quarter this year was more than the total figure for 2008.

But in a boom period, agencies advise homebuyers to be cautious of rogue agents.

Mr Lim added: “In any business, there will always be rogue agents. This will tend to increase when the transaction volume increase and also when the market is going up. Yes, we do hear of such cases and in-house, we have this policing process.”

He said agents who behave badly will either be counselled or have service terminated.

Source: Channel News Asia, 28 July 2009

Online Only – Questions for estate agencies body…

I refer to “Dealing with the agent from hell…..” (July 23).

As a property agent, I would like to respond to the comments and advice by Singapore Accredited Estate Agencies (SAEA) on “Case 1” – A prospective buyer of a 5-Room HDB resale flat who called an agent for a viewing and made an offer, but said he did not wish to appoint the agent for the purchase. However, the agent insisted that the buyer sign a commission agreement with his agency.

SAEA says the agent cannot insist that the buyer use his services ; neither can he refrain from selling to a buyer who refuses his services. SAEA further advises the buyer to bypass the agent by writing directly to the seller and to meet the seller personally to make the offer.

* Is SAEA making the comment and advice as a real estate organisation or as a consumers’ organisation ?

* Does SAEA know that it is a legitimate and accepted industry practice for agents to serve buyers for HDB resale flat transactions and to levy commission thereof ?

* SAEA says that the agent cannot refrain from selling to a buyer who refuses his services. Is SAEA suggesting that the agent must broker the deal for the buyer for free ? (Since the buyer refuses the agent’s services, it is obvious that the buyer is unwilling to pay commission.)

While the agent cannot insist that the buyer use his services; surely the buyer cannot insist that the agent broker the deal for him?

* Does SAEA think that it is ethical for the buyer who after viewing the property through the agent, bypass the agent to approach the seller directly ? Is this any different from buyers who after viewing properties through agents, bypass them to approach sellers directly to close the deal under the pretext that they do not wish to transact through the sellers’ agents ?

Source: Today Online, 28 July 2009

HSR – Striving to provide the best for the staff

ON the outside of the building that houses HSR International Realtors, a sign reads ‘HSR Property, the #1 real estate group and largest real estate company in Singapore’. Inside the 80,000-square-foot compound in Toa Payoh is a karaoke lounge, games corner, spa, gymnasium, billiard tables, coffee tables and shades dotted around an open area for alfresco dining.

The provision of such elaborate amenities is to remind staff to take a break and achieve work-life balance. ‘HSR is not only a workplace to them. It’s like a second home or mini country club. They can bring their family members along and enjoy our facilities,’ says the company’s CEO, Patrick Liew.

A winner of the Enterprise 50 Award last year, HSR was founded as Hap Seng Realty by Lau Gek Poh and Helen Lau, with Kellie Lim the first executive director. It was renamed HSR in 1992.

Apart from the recreational facilities, the HSR building houses various subsidiaries which together provide a one-stop solution for real estate advisers and clients. For example, HSR advisers can print their flyers at the printing company while HSR clients can use interior design company Paxel to beautify their properties – all on the premises.

The focus on staff is pertinent in an industry where it is common for agents to switch to competing companies. This was exactly what caused HSR to hit a low in 2002-2003.

‘Our management team left suddenly, and it dawned on us that for a company to flourish it is important to have people who have a sense of belonging and loyalty,’ says Mr Liew. ‘We are not just property agents. We see ourselves as advisers, providing the best advice for our clients. That is why we strive to provide the best for our staff. If we sincerely mean well, they will stay with us. It’s not just about profits – it’s about creating a better life for our people, and that will make them want to contribute.’

This strategy contributed to a six-fold increase in sales between 2004 and 2007 to $300 million. In 2007, the group netted a profit of some $5 million. According to the company, it has 41 per cent of the private resale markets – residential, commercial and industrial – and 36 per cent of the HDB resale market.

Other than a conducive environment, HSR is big on getting the best out of its people through education. Advisers can choose from a range of more than 30 courses. ‘We see every one of our people as an F1 racing car,’ says Mr Liew. ‘Our job is to create a championship track for these racing cars to move further and faster.’

Staff with top sales records undergo in-house training courses to be recognised as trainers. And through training, they share their rich sales experience with fellow advisers.

All HSR advisers have to go through a continuous 20-hour boot camp. Beyond this, each can choose to sign up for other HSR courses that interest them. Courses are revised regularly, depending on the market conditions. ‘When the market was booming, we set up leadership courses to help our advisers lead their teams better,’ says Mr Liew. ‘When the market is down, we set up negotiation courses to help our advisers work with clients to close their deals more readily.
One of our goals is to make sure our advisers attend at least six hours’ training per week.’
HSR’s training is backed up by a guaranteed income plan. ‘If our advisers are not performing well, it means that we have not done a good job coaching them and we will compensate them,’ Mr Liew says. ‘We put our money where our mouth is.’

Besides courses, HSR has created an award-winning SMART Plus technology system to assist its advisers. This is a Web-based sales management system that allows advisers to match suitable buyers with sellers, and facilitates course enrolment and in-house communications. HSR says it is the only player in the industry that has implemented such a system. Human error in transactions has been minimised, while transaction processing has accelerated. The SMART Plus system also makes it quick and easy to monitor and assess the sales performance of the company’s 8,000-plus advisers.

Advisers are also kept in the company loop through a monthly letter. As a part of its philosophy, HSR takes pride in its corporate social responsibility initiatives.

In 2007, it raised $50,000 by organising Glass-a-thon, when a record was set for the most number of people walking on broken glass. Some 521 HSR advisers created another national record by breaking arrows on their throats to help raise money for the President’s Charity Challenge.

All HSR advisers are also given three days’ additional leave to do charity work. Besides enhancing HSR’s efforts to give back to society, this helps bond HSR advisers with one and the company.
In the midst of recent public frustration over dodgy real estate practices, HSR was very much unfazed.

‘Every HSR adviser carries a Code of Honour with them everywhere they go. They recite it every time before a meeting or training course starts. Our advisers want to promote and protect our client’s best interest in whatever they do,’ says Mr Liew. The golden rule in the code is: ‘I will do to others what I want others to do to me. I will not do to others what I do not want others to do to me.’
Mr Liew speaks plainly: ‘If an unethical adviser breaches this code, we will not hesitate to turn them in to the authorities.’

The writers are students of the NUS Business School

Source: Business Times, 28 July 2009

Agents’ ‘greed’ prompts warnings

‘Fee for secure booking’ practice reportedly rampant at Meadows@Peirce

THE sizzling-hot property market and the rush by buyers to secure choice units have led some property agents to turn greedy.

Some agents are offering potential buyers their services to secure a booking for their choice units if they pay them a commission. This has prompted at least two marketing agencies to warn their agents against this practice.

This scheme is reportedly rampant at the freehold Meadows@Peirce development near Teachers’ Estate, which is supposed to be open for preview only from today.

Some marketing agents, however, told Today that it is the potential buyers that are offering commissions to agents to secure for them their choice units.

The fee earned by these agents is said to be about 1 per cent of the property value. With unit prices at Meadows@Peirce ranging from $900,000 to more than $1 million, these agents could potentially earn between $9,000 and more than $10,000 for each unit that they can secure for an eager buyer.

In an email to its 3,000 associates on Wednesday, ERA Realty Network, one of the marketing agents for the project, warned: “Please do NOT collect commission from buyers for Meadows@Peirce or any other projects. Anyone caught doing so will be terminated from ERA and no commission will be paid to the associates.”

ERA’s associate director Eugene Lim said the email was a “preventive measure”.

“We want to stop it before anyone receives a commission. It is not right,” he added.

Of late, ERA has been cracking the whip on its agents in an industry where complaints of rogue or ignorant agents are rife. Last week, ERA warned its agents against submitting transactions under the names of senior colleagues to garner a higher share of the commissions.

And in February, a couple successfully sued ERA after its agents profited from “flipping” an apartment they were engaged to sell. The couple had sold their apartment through ERA agent Jeremy Ang, but it turned out that the buyer, Ms Natassha Sadiq, was the wife of his boss Mike Parikh, a senior director at ERA. She immediately resold the unit for a $257,000 gain.

Another marketing agent for Meadows@Peirce also issued an email warning a few days ago. Knight Frank reminded its 700 agents that they cannot receive or ask for commission from buyers, cannot collect an entrance fee into the showflat and cannot ask for blank cheques, which can subsequently cause the buyer to feel pressured to make a purchase.

The company’s executive director Foo Suan Peng said: “This is something we don’t condone because it will give rise to conflict of interest.”

Agents Today spoke to said the “fee for secured booking” practice happens with other projects, too. One said there was “nothing wrong” for buyers to pay agents, as both are willing parties.

Singapore Accredited Estate Agencies chief executive Tan Tee Khoon disagrees. He told Today: “The agent receives a commission from buyers when they are already hired by the developer to provide the services. That is unethical.”

Source: Today, 24 July 2009

We should set a higher standard

I APPLAUD the recent moves to regulate entry into the property agency business, but shouldn’t there be a minimum academic qualification requirement for a would-be agent to take the regulatory examinations?

I do not think that an O-level certificate is a sufficient-enough minimum academic prerequisite for entry into an industry that deals with millions of dollars in client assets.

I would liken the estate agency business to the banking advisory business – only those armed with diplomas, degrees or higher professional qualifications are deemed sufficiently qualified to advise clients on structured products and investments.

Property is the largest investment and asset for most people and it seems almost ridiculous for agents to handle huge assets when they hold an O-level certificate and some easily-attainable estate agent’s licence.

I feel that in order to make the property agency industry more credible and one for many to aspire to join, minimum academic qualifications such as A-levels, diploma or a higher paper qualification is needed.

James Chi Han-Hsuan

Source: Today, 24 July 2009

Dealing with the agent from hell …

Complaints about property agents run the gamut from service quality to commission disputes.

Each week, the Singapore Accredited Estate Agencies (SAEA) deals with 15 to 25 such enquires and feedback from the public, comparable to the 1,000 to 1,200 that reach the Consumer Association of Singapore every year.

Based on the four most frequent complaints received, the SAEA offers tips on how you can deal with what appears to be the property agent from hell.

CASE 1
The owner of a five-room Housing and Development Board (HDB) flat engages an agent to help sell the unit. A prospective buyer calls the agent for a viewing and makes an offer, but says he does not wish to appoint an agent for the purchase. However, the agent insists that the buyer sign a commission agreement with his agency.

SAEA says: HDB owners and buyers do not need to engage a property agent in a resale transaction. Thus, the agent cannot insist that the buyer use his services; neither can he refrain from selling to a buyer who refuses his services. If a buyer does not wish to engage the agent, he may write directly to the seller and meet the seller personally to make the offer. At the meeting, the prospective buyer may verify that the person he is meeting is the seller by requesting for a copy of his property tax statement and identity card.

CASE 2
A man who bought his flat at the peak of the last property boom is sitting on big paper losses. If he sells the flat, the proceeds (after paying off the mortgage balance and returning the requisite amounts to his Central Provident Fund account) may not leave him with any cash. So to help the seller pocket some cash, the agent strikes a deal with the buyer to declare to the authorities that the flat was sold for a lower price. The buyer then pays the difference between the actual and declared price to the seller in cash.

SAEA says: It is illegal to make a false declaration of resale price in an HDB transaction. If the resale flat is likely to result in negative equity, sellers should explore alternatives such as renting out the flat or the Lease Buyback scheme. Alternatively, sellers can simply wait for a better time to sell.

CASE 3
An agent persuades a seller to sign an agreement allowing the agent sole rights to sell the property. He tells the seller that the agreement can be terminated at any time, but does not say that if the seller finds a buyer himself during the validity of the agreement, the agent would still be entitled to commission. A month after signing the agreement, the seller decides to terminate the agreement, only to be told it is irrevocable.

SAEA says: It is important for the agent to inform the seller of his rights and obligations in granting an “Exclusive Authorisation To Sell”. Once it is signed, it cannot be revoked for the period of validity. Sellers should read the agreement carefully before signing it.

CASE 4
When a tenant is writing a cheque for the tenancy deposit and one month’s advance rent, an agent tells the tenant to make out the cheque in the agent’s name instead of in the owner’s name.

SAEA says: Tenants should not make out cheques for tenancy deposits and the likes to the agent – unless the agent can prove that he or she was appointed to be Power of Attorney by the landlord. Landlords can protect themselves from rental scams by buying rent protection insurance.

Source: Today, 23 July 2009

Let’s have a real estate relay

Two groups vying for regulatory clout can complement each other

THE race is on.

Four months after National Development Minister Mah Bow Tan declared current real estate regulations untenable and hinted at mandatory standards for housing agents, the two factions in the industry are vying for regulatory clout.

On one side is the Singapore Accredited Estate Agencies (SAEA), which provides voluntary accreditation in what some have termed a ‘cowboy’ industry. On the other is the Institute of Estate Agents (IEA).

Since Mr Mah’s announcement in March, both the SAEA and IEA have met the authorities separately to argue why each is best placed to provide the industry with regulation.

Last Friday, the SAEA announced new initiatives to get more agents accredited, and the IEA responded by saying that it was unveiling a new entry-level course for property agents.

Given the rivalry between the two bodies, working out a new real estate regulatory framework would require egos to be carefully handled.

Yet there is no running away from the facts: Years of emphasis on ‘self-regulation’ has not changed the situation substantially. The market has not matured; consumers are none the wiser. The number of housing scams have not receded; they have merely changed with the times.

When the market was buoyant, it was common to hear of housing agents brokering transactions that inflated the price of a flat to help buyers obtain larger loans than they merited. Now that prices are depressed, we hear of deals to under-declare the price of flats so that sellers who had used their retirement savings to pay for their properties need not refund the full proceeds into their account.

Some may point to the increasing number of agencies getting accredited to argue that the current system is making progress. But these numbers tell only part of the story.

The number of housing agencies accredited by SAEA has risen from 161 in 2006 to about 300 now. From 2006 to June this year, the SAEA handled 212 complaints, of which 39 per cent were referred to the accredited agencies involved for settlement. In the meantime, the IEA, whose membership has doubled since 2007 to 2,000, received 324 complaints from 2007 to 2008.

All these numbers are dwarfed by the number of real estate-related complaints that the Consumers Association of Singapore (Case) gets each year. Consumers made 1,100 complaints last year, 1,113 in 2007, and 991 in 2006.

In other words, consumers either do not know about the industry associations trying – but without authority – to regulate their players, or they do not trust these associations to give them a fair deal.

The picture gets more complicated when we examine how companies currently deal with attempts at regulation. Large housing agencies usually park their agents in two subsidiary or related companies. When new industry standards are introduced, the subsidiary which has agents with higher qualifications is submitted for scrutiny. The seal of approval awarded to the subsidiary, however, is often mistaken as a sign that the entire company has passed muster.

Hardly anyone bothers to ask if the agent they are dealing with is accredited because most do not look beyond the logo of the property group on a housing agent’s name card.

One can think up many ways to plug this loophole, but they do not address the key problem: that individual housing agents are not licensed. Someone who signs up with an agency is allowed to sell homes almost immediately.

In theory, the Inland Revenue Authority of Singapore licenses housing agencies, which in turn are supposed to keep tabs on the agents who sign up with them. In practice, few agencies have the guts to sack an unethical but high-performing agent.

The average Singaporean would probably demand that the Government should step in to license agents itself. But that would be too daunting a task given that there are close to 30,000 agents in the market. Setting up a government regulatory framework from scratch would be a waste of resources when there are industry players who are willing, and able to do the job – if only they are given enough teeth.

As it is, the three-year-old SAEA is trying its best to prod agents to take the Common Examination for House Agents and the lower-level Common Examination for Salespersons. But it has thus far accredited just 6,000 of the 30,000 individual agents in the market, because accreditation is not compulsory.

The IEA tries to keep its house in order by maintaining an online registry of agents from 360 participating companies and plugging its new entry level course on marketing and ethics.
Rather than reinvent the wheel, the Government might arm the industry groups by making regulation compulsory. It can set the broad parameters of regulation but let the industry groups handle the details.
But for this to work, we must deal first with the rivalry between the SAEA and IEA. Although both run programmes that overlap somewhat, they complement each other in many ways. The former, after all, is mainly an accreditation body for real estate companies, while the latter deals with agents on an individual basis.
It is not difficult to imagine the two bodies working seamlessly together to regulate agents, if the authorities play matchmaker and throw in some carrots for good measure.

With a little patience, the race between the two can be turned into a relay. And thousands of consumers out there will have one less worry when trying to buy or sell a home.

Source: Straits Times, 22 July 2009