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

Property agents reach out with Facebook

Having secured a stronghold in the classifieds, they are now expanding into the virtual arena.

FRIENDLY phone calls or e-mail just do not seem enough these days. Soon, more property agents may ‘superpoke’ their clients when previews for the latest launches begin, or when choice units from existing developments surface.

Having carved out a stronghold in the classifieds, property agents are now expanding their reach to virtual networking site Facebook. Some set up profiles for upcoming projects, while many others leave their contact numbers on those pages for house hunters.

KF Property Network’s Tony Koe is one agent who has been actively promoting launches on Facebook. The general manager of the Knight Frank subsidiary has created profiles for Soilbuild Group’s Meier Suites off Meyer Road – for which there will be a preview this weekend – as well as for Far East Organization’s Silversea at Amber Road.

‘We have established a group of supporters, be they our fellow agents in the market or regular property purchasers,’ said Mr Koe. One reason is that they can obtain information on the projects quickly from Facebook, he explained.

For instance, visitors to the Silversea page will be able to view artist’s impressions of the development. They can also gauge how response to the launch has been by viewing photographs of the turnout at the showflat. The page boasts 197 ‘fans’, comprising what is likely to be a mix of agents and interested buyers.

Also, a Facebook profile is free, accessible by users from around the world, Mr Koe said. According to him, one of his agents was even asked to fly to Indonesia, at the request of a Facebook user and prospective investor there.

Word-of-mouth is also strong on Facebook and other networking sites, said Michael A Netzley, a corporate communications professor at Singapore Management University’s Lee Kong Chian School of Business. ‘A recommendation from a friend can have a strong impact on how others perceive the product or service.’

Besides property agents, at least one other developer has jumped on the Facebook bandwagon. Hong Leong Holdings recently set up a profile for its new project in the Upper Changi area, The Gale, and over 330 users have signed up as ‘fans’.

The page offers regular updates on sales. For instance, a post on Monday screamed: ‘More than 65 per cent sold in three days of preview!’

A user going by the name Yue HuiHui would also have found the page useful. No, there is no mini golf course at The Gale, said an agent in response to his question. But, there are 18 other facilities such as a bubble pool which he can ‘enjoy’.

A Hong Leong Group spokeswoman said that The Gale’s Facebook page has received ‘very encouraging’ response and there is a constant stream of posts. ‘It is highly probable that Hong Leong Holdings will promote future projects through Facebook and other Web 2.0 applications. Projects in the pipeline include its development at No 1 Balmoral Road and No 76 Shenton Way.’

For every popular Facebook page, however, there can be many others which stay unseen. Some agents attract barely a fan on pages which they create for certain developments.

KF Property Network’s Mr Koe points out that a site’s success also depends on the agent’s influence in the industry. ‘The person who set up the page must be a magnet himself,’ he said, adding that that person would still have to go out and gain contacts. ‘You can set up a very beautiful website, but if you can’t draw people’s eyeballs to you, that will defeat all the purpose.’

Herein lies the drawback of marketing through networking sites such as Facebook. According to Prof Netzley, relying on existing networks to spread the word means that outreach will be limited. ‘In exchange for the smaller reach, we expect a higher response rate,’ he said.

In contrast, messages spread through traditional media such as newspapers or television reach a much wider audience. In turn, the response rate to this mode of marketing is likely to be lower, he said.

For most companies, print advertising is unlikely to go out of style anytime soon. At Singapore Press Holdings’ Cats Classified, for instance, the average number of fresh listings has increased from January to June, reflecting the pick-up in market sentiment.

Many ‘property watchers’, in particular, rely on weekend editions of major newspapers to find out about launches, said the Hong Leong spokeswoman. ‘Perusing the advertisements from developers in the newspapers also allows them to easily compare the benefits of different developments.’

Source: Business Times, 18 July 2009

Push to get property agents accredited

AN ESTATE agents’ group has launched a push to heighten the professionalism of property agents.

Singapore Accredited Estate Agencies (SAEA) wants all housing agents to have at least an entry-level Common Examination for Salesperson (CES) certificate. SAEA wants ‘to move the estate agency profession to the next lap’, said its recently appointed chief executive officer Tan Tee Khoon.

At present, about 6,000 out of 24,000 property agents at accredited agencies have either first-tier Common Examination for Housing Agents (CEHA) or second-tier CES certification.

Although SAEA wants all agents to be accredited, obtaining a certification will be voluntary and there will be no penalty should an agent choose to not be accredited. But property agencies and SAEA are confident that the agents will choose to be accredited ‘since it will benefit them in the long run’, Dr Tan said.

To encourage them to obtain certification, SAEA has obtained funding from the Workforce Development Agency (WDA) for first-tier CES accreditation. The funding will cover up to 80-90 per cent of the course fee, which is about $350, excluding examination charges. Some agencies, such as HSR, will fully subsidise the remaining costs.

Another SAEA initiative will improve the procedure for dealing with complaints and disputes involving estate agencies.

Dr Tan said that the procedure has been enhanced to provide greater transparency for consumers, from the time that a complaint is lodged until when the matter is closed. SAEA will also work with CES external examiner Ngee Ann Polytechnic to introduce a Certificate in Real Estate marketing so that CEHA and CES holders can upgrade to a recognised professional qualification.

The first 120-hour course will run from November this year. SAEA and Ngee Ann Polytechnic are working on the prospect of getting funding from the Skills Development Fund for the course, which will cost $1,500 for six months.

Source: Business Times, 18 July 2009

Steven Choo brings a special touch to Redas

STEVEN CHOO, a former property consultant and university lecturer, will be taking on a new role soon – as chief executive officer of the Real Estate Developers Association of Singapore (Redas).

BT understands that his appointment begins on Aug 1.

Dr Choo, 57, will replace retiring Redas executive director Chia Hock Jin.

Market watchers suggest that Dr Choo’s appointment is part of efforts by the Redas council, led by president Simon Cheong, to spruce up the organisation and its image. Having someone who is also a well-respected professional as CEO would also bolster Redas’s credibility.

‘He was well liked by students when he was a university lecturer,’ a former colleague said when told about Dr Choo’s new job. ‘He’s also respected by people in the property industry as well as government officials. He talks sense and doesn’t push it too much.’

An industry observer said: ‘Redas needs someone knowledgeable like Dr Choo, who can hold discussions with the authorities and whom they can take with a certain seriousness. He’s someone more neutral and yet who knows the market. Of course, he’s also very good at doing research.’

The association is also expected to take more interest in training and development in the real estate industry, BT understands.

Analysts say that they would not be surprised if Dr Choo recruits fresh talent to boost the management team at Redas to help achieve these goals.

The former Catholic High School student holds a PhD in urban planning from the University of Washington.

He was a senior lecturer at the National University of Singapore’s School of Building & Estate Management before joining Richard Ellis Property Consultants (now known as CB Richard Ellis) in 1993. Dr Choo left the firm in 1995 to join rival Jones Lang Wootton, which later became Jones Lang LaSalle (JLL). In 2001, he left JLL, where he was last head of research and consultancy and regional research head.

Dr Choo later surfaced at CapitaLand, where the posts he held included senior vice-president of research and corporate development and also SVP of CapitaLand Residential’s Malaysia investment department.

He left the property giant a few years ago and has since been doing property consultancy stints in the Middle East, BT understands. Dr Choo is married and has a grown-up son.

He has also served on the boards of the Singapore Land Authority and JTC Corporation in the past. He was also deputy chairman of the Economic Review Committee’s Land Work Group.

He currently sits on the board of NTUC Choice Homes.

Source: Business Times, 18 July 2009

Push to certify real estate agents

Industry body wants at least 1 in 2 agents here accredited by year end

THE real estate industry is stepping up efforts to train and certify property agents in Singapore, after the Government expressed concern over the unscrupulous practices of rogue agents, highlighted in a recent spate of unsavoury incidents.

Singapore Accredited Estate Agencies (SAEA) said yesterday it aims to see at least half of the 30,000 or so agents here accredited by the year-end – a tough goal as the tally to date is only 6,000.

As an incentive, SAEA has persuaded the Workforce Development Agency (WDA) to subsidise most of the course fees for one of the exams till December.

Agents will be tested on property law, ethics and sales processes. The goal is to ensure that property buyers and sellers are able to engage only accredited agents trained in such transactions, said SAEA chief Tan Tee Khoon yesterday.

The Institute of Estate Agents said yesterday it would introduce in September a six-week entrance course for all new property agents. No such course is offered currently, so basic training is left to individual property agencies.

Accreditation is voluntary, as the Government has always said it prefers the sector to be self-regulated. There is no law requiring property agents in Singapore to be licensed or qualified. They are regulated by the agencies they work for.

However, this has led to some instances of buyers and sellers being cheated by unethical rogue agents or misled by ignorant ones. In February, a couple successfully sued estate agency ERA Realty Network because its agents had made a profit out of ‘flipping’ an apartment they were supposed to sell for the couple.

Following this, National Development Minister Mah Bow Tan said the current regulatory regime was not tenable, so the Government was considering tightening the rules governing agents.
In response, SAEA yesterday unveiled several steps to raise industry standards.

The first is to encourage more agents to obtain accreditation. To do so, they must pass an exam and belong to one of the 300 agencies accredited by SAEA.

They can take either the Common Examination for Housing Agents (CEHA) or the lower-level Common Examination for Salespersons (CES).

CEHA, which costs $315 and was introduced in 1996, is recognised by the Inland Revenue Authority of Singapore as a qualification for agents who want to start their own real estate firms.

CES, which costs $200 and consists of multiple-choice questions, was created last year for agents keen on simply buying and selling properties. This group makes up about two-thirds of agents here.

Yesterday, SAEA said WDA will subsidise 80 to 90 per cent of the course fees for CES takers until the end of the year.

Nine of the largest SAEA-accredited agencies – including PropNex, ERA, HSR and Dennis Wee – have pledged to get all their active agents to take the exams by the year-end. These agents do deals regularly and make up about half of all agents here. ERA associate director Eugene Lim, for instance, said the firm will send 50 to 80 agents to take the exams every month.

For agents keen to get further qualifications, SAEA is also tying up with Ngee Ann Polytechnic to introduce a new Certificate in Real Estate Marketing. The six-month course will cost about $1,500 and is slated to start in November.

In addition, SAEA is taking steps to improve its complaint procedures. Buyers and sellers who are unhappy with their accredited agents can lodge complaints with SAEA, which receives about 70 such complaints a year. Previously, the process was not made public, and there was no structured procedure to handle dispute resolution, said Dr Tan. Now, SAEA will provide greater transparency when dealing with complaints.

Dr Tan said these moves are a push by the industry to raise the competence and improve the conduct of real estate agents, but that help from the Government would also be appreciated.

‘I hope that some time next year, we will see an announcement by the Government on making accreditation compulsory for those who want to practise.’

Source: Straits Times, 18 July 2009

ERA issues final warning to agents who pull commission ruse

For every property deal they close, their agencies would take a cut of their commission, and how much would depend on the productivity and seniority of the real estate agent. But some agents are getting around this commission system — prompting one agency to issue a “final warning” to all its agents on Tuesday.

In an email, ERA said it had discovered that some agents under a “80/20 scheme” — where one has to give a 20-per-cent cut of the commission to the company — have been submitting their transactions under the names of more experienced colleagues who come under a “90/10” scheme.

This lets them keep a bigger share of the money and, according to some housing agents Today spoke to, the senior agent is likely to pocket a cut from his colleague for the help.

Apart from how this “creates unfair competition among associates”, ERA said in the email, it amounts to cheating — and “if caught, the company will not hesitate to terminate” the culprits.
“More importantly, there is the more serious legal implications involved should the transaction go awry,” ERA noted. Both agents involved could face legal action from their clients and, in the case of an HDB transaction, the Housing and Development Board. They would also be liable to indemnify the affected parties.

ERA agents Today contacted were reluctant to discuss the email, but Mr Jeff Foo, president of the Institute of Estate Agents, noted that such a practice was “prevalent” and happened in other agencies too.

In every property sale, he said: “There are a lot of pre-qualifications that agents have to check. If this agent fails to check and if the other agent lends his name to make a quick buck, not only will the agents get involved, the consumer will suffer.”

But the buyer and seller can rest assured that if the papers are in order, the deal can still go through even if the agents in cahoots are exposed.

Punishing the agents responsible would not help because they can always join another agency and carry out the unfair practice, Mr Foo added.

Source: Channel News Asia, 17 July 2009

Plans underway to ensure property agents have proper accreditation by year-end

Plans are underway to ensure that all property agents in Singapore have proper accreditation by the end of this year.

According to the Singapore Accredited Estate Agencies (SAEA), it is working with the Workforce Development Agency (WDA) to equip more agents with a formal certification.

Out of 30,000 property agents in Singapore, only about 6,000 have sat for exams.

The SAEA plans to introduce an entry-level certification for property agents called the Common Examination for Salespersons.

Under the plan, WDA will subsidise 80 to 90 percent of the course fee until the end of the year.
According to the SAEA, the move is in response to the increasing number of consumer complaints against property agents.

Tan Tee Khoon, CEO, Singapore Accredited Estate Agencies, said: “It calls for the industry to re-look the accreditation of agents. At one time maybe they felt that there was no need for it, because the public is well informed, they know what they are doing and therefore they can fend for themselves.

“But in reality, if we look at the number of scams that have taken place, the consumers need some form of protection. They need to be aware and they need to know that there is an accreditation body that they can deal with. And they also need to know that dealing with accredited agents gives them a sense of security.”

But Dr Tan admitted that without laws in place, the body does not have the power to penalise agents if they still do not want to get accredited.

He said that SAEA is pushing for such laws to be implemented, following the government’s decision earlier this year to undertake a review of the real estate industry, including agent qualifications and training standards.

For agents who want to go further than getting basic accreditation, SAEA has teamed up with Ngee Ann Polytechnic to offer a diploma course in Real Estate Marketing.

The course will begin in the fourth quarter of the year and SAEA is seeking funding support from the government to subsidise the fees.

Consumers can now file complaints against property agents via email, and once their complaint is received, they will be assigned a duty officer, who will take charge of the case and whom they can contact for queries and updates.

The SAEA is a body representing the major property agencies in Singapore.

Source: Channel News Asia, 17 July 2009

Check out SAEA if you have property brokering queries

WE REFER to Mr Roger Lim’s Forum Online letter, “Time to set up agency to regulate property brokering”, yesterday.

We take this opportunity to inform Mr Lim that the Singapore Accredited Estate Agencies (SAEA) was launched as an accreditation scheme for estate agencies and agents in November 2005.

Major government bodies, namely the Ministry of Finance, Inland Revenue Authority of Singapore and Housing Board, were involved in its inception.

Now an accreditation body, SAEA has accredited key estate agencies with approximately 23,000 agents on their registers. In May last year, SAEA implemented a Common Examination for Salespersons (CES) to provide a basic competency yardstick for agents primarily active in the HDB resale sector. There are now more than 2,500 who have passed the CES.

We would like to clarify that HDB lessees and buyers need not engage the services of an estate agent for the resale transaction. However, there are benefits in appointing an estate agent, such as convenience and tapping on the networks of the agent to sell/purchase expeditiously.

An estate agent appointed by the seller does not have the prerogative to insist that the prospective buyer use his services or to refrain from selling to the buyer who refuses his services. Such an agent is also not acting in the interests of the lessee (seller) if he does not reveal the prospective buyer’s offer to him or declines to co-broke to ensure he gets more commission.

It is recommended that an agent acts and collects commission only from one party to the transaction, who could either be the seller or buyer. However, an exception may be made if both seller and buyer are aware and consent to the agent acting for both parties. The agent should preferably obtain both parties’ consent in writing.

Further, a visit to our website at http://www.saea.org.sg will lead Mr Lim to our Seller’s and Buyer’s Guides, which we believe will come in handy when he is selling or buying properties. If Mr Lim has yet to engage an agent, he may wish to consider SAEA accredited agents or salespersons as they are bound by a strict code of conduct and ethics.

SAEA has also set up a Disciplinary Panel and Mediation Centre to look into the misconduct of accredited agencies/agents/salespersons and mediate disputes among parties to a real estate transaction.

Dr Tan Tee Khoon

Chief Executive Officer Singapore Accredited Estate Agencies Ltd

Source: Straits Times, 24 June 2009

Time to set up agency to regulate property brokering

I THINK it’s high time for the Government to set guidelines for the property industry. It is long overdue and radical change is needed to put things right to protect property buyers and sellers.

Two years ago, a relative of mine got a property agent to sell her Housing Board flat, but she realised that at every viewing, the buyers were accompanied only by her own agent. We suspected the agent was trying to earn commissions from both the seller and buyer.

I suggested that she ask the agent to hold an open house but she was given all sorts of excuses on why it was a bad idea. In the end, I posed as a property agent and called the agent, but was told that the unit was on hold. I was shocked that this agent did not want to co-broke with other agents. It meant that fewer people would have a chance to view the flat and present an offer. We fired the agent immediately. I later placed an advertisement for the flat and it was sold within a week.

Two years later, things are still as bad. I am currently engaging an agent to look for a unit for me; at the same time, I have also been checking the newspapers for units and getting my agent to arrange viewings for me.

There have been certain units that I selected which could not be co-broke by my agent, and were either “on hold” or “already co-broke”. However, when I called personally to ask about these units, I was told by the seller’s agent that they could arrange viewings at the times I wanted. This is really unprofessional.

In such cases, isn’t it better to set a guideline that an agent should not represent both parties as there is a conflict of interest especially when a dispute occurs?

Furthermore, if an agent is found to show unprofessional sales ethics, there should be a board for sellers, buyers or even agents to complain to and, upon verification, such agents should be barred from practice and fined.

The Government should step in and put a stop to all these unethical practices. If the insurance industry can be regulated by the Monetary Authority of Singapore, why not the real estate industry by an independent government agency, instead of just the Institute of Estate Agents, whose members are mostly made up of those in the industry?

Roger Lim

Source: Straits Times, 23 June 2009

How home buyers can avoid pitfalls

We refer to last Sunday’s article, ‘Beware of pitfalls in property deals’.

It appears that in all the three cases reported, huge cash upfront was requested prematurely.

The Singapore Accredited Estate Agencies Ltd (SAEA) would like to offer some pointers to buyers in addition to the opinions given by Mr Chris Koh, Mr Eugene Lim and Mr Mohamed Ismail, all of whom are SAEA’s advisory committee members, so that the pitfalls can be avoided.

As a general rule, buyers are advised against agreeing to cash advances to sellers prematurely.
The option to purchase provides for 1 per cent option money to be paid to the seller and, thereafter, an option period of usually 14 days will prevail before the buyer exercises the option and makes further payment of 4 per cent or 9 per cent to the seller’s solicitor.

The option period allows the buyer’s lawyer to do due diligence checks on the property, which may include writing to the management corporation to ascertain if the seller has any arrears of maintenance contributions or to discover the lodgement of a charge against the property because of the seller’s debts.

Buyers will be prudent to stick to the terms of the option in order to prevent future encumbrances.

When cash advances are suggested by any estate agent or seller, this may be a red alert to buyers that the seller could be in financial difficulty and further verification is required.

One way is to do an individual credit check online to ascertain if there are any existing lawsuits or bankruptcy petitions filed against the seller.

Buyers may consider appointing an accredited agent or salesperson to act in their interest and to negotiate with the seller’s agent.

This would have helped the Chias (in Case 2 in the article) to know there was a competitively higher offer when the seller’s agent was unable to divulge such information to them.

Information about accredited agents or salespersons is available on our website, www.saea.org.sg

Our accredited agents or salespersons adhere to a strict code of conduct and ethics, and in the event of any dispute, we have trained mediators to facilitate a settlement, such as the issue of commission refund in Case 1.

In a disciplinary breach, we have a disciplinary panel to adjudicate and require the agent concerned to answer.

Tan Tee Khoon (Dr)Chief executive officer (Designate)Singapore Accredited Estate Agencies

Source: Straits Times, 14 Jun 2009