Like medical and legal services, we must engage trained and reliable property professionals
Many people praised the Competition Commission of Singapore’s recent decision to have the Institute of Estate Agents (IEA) remove its commission guidelines for property agents.
The common reason given was that many felt property agents played a minor role in their transaction and hence did not deserve what the customers felt was a hefty commission. Others still complained of the shoddy service they had received and felt that the removal of commission guidelines would only make property agents work harder for their commissions.
That is true to an extent, but unscrupulous agents will always find ways to use the non-existence of commission guidelines to their advantage. And that is why, like medical and legal services, it is necessary to engage professionals who are both trained and offer reliable services when dealing with a property transaction.
In truth, the real estate industry has long been an unregulated one. That’s because the IEA’s commission guidelines were just that: Guidelines. Property agents in general were still free to negotiate their own commissions with clients.
Recently, there has been a lot of negative press on property agents, revealing long-held public sentiments of the real estate industry. Following the removal of similar guidelines for the Singapore Medical Association and Singapore Law Society, it was only to be expected that the Competition Commission would do the same for the real estate sector. It was only a matter of when, not if.
It was also timely that we had, in recent months, changed our direction to reflect our new tagline: Service You Trust.
With this shift in focus on quality service rather than the quantity of agents, we had already put in place a number of initiatives to reflect our service reliability. The Competition Commission’s announcement merely complemented our measures, which had taken months of careful planning and development.
These measures are more than just a paradigm shift in our services; they are also timely solutions for the consumers. Because, while removing the commission guidelines is a step towards healthy competition, that same removal is also a further deregulatory leap in an already unregulated industry.
Thus, there was a need to improve the standards of the real estate industry and the public’s perception of the industry, starting with our own agents.
The first major step in our housekeeping was to amicably terminate 2,800 of our own inactive agents. It was only after retaining our active agents that we could more easily implement our service-enhancing initiatives.
These initiatives tackle the issue of customer care from various angles. At the end of the day, all our initiatives come back to our main aim: Adding value to our customers’ lives.
With regards to our own competency, we instituted our own set of commission guidelines, which we placed on our website so that the consumer and associate alike would have a benchmark to refer to.
We also implemented a PropNex Proficiency Certificate and a PropNex Professional Practitioner’s Certificate. The first requires all new and long-serving but inactive agents to answer correctly at least 75 per cent of a multiple-choice test, which covers topics on the private and public housing markets, as well as the code of conduct and ethics.
The second requires agents to get professional indemnity insurance coverage and show their commitment to continual professional development by attending career-enhancing programmes.
To take care of the customer, we set up a customer support centre to answer consumers’ concerns, carry out customer surveys after each transaction, and set up in-house mediation and disciplinary boards to settle client-associate issues.
In terms of self-regulation as an industry, associations need to implement mandatory certifications that ensure successful applicants have comprehensive working knowledge of the market.
Naturally, these qualifications need to be recognised by the governing authorities such as the Housing and Development Board and the Inland Revenue Authority of Singapore. This would at least ensure that all property agents have an adequate working knowledge of the industry.
Disciplinary and enforcement measures also need to be established to penalise errant property agents. In this way, the consumers can be better safeguarded against rogue agents who may be seeking to exploit the lack of regulation. While these measures may not immediately eradicate unethical practices by agents, it would serve to discourage such behaviour.
If the industry remains unregulated, the long-term effects would inevitably lead to plummeting consumer confidence due to errant property agents rampantly practising their trade with lack of morals and integrity.
With a decreased vote of confidence from the consumers, we might see a decline in foreign investments, which would be a lose-lose situation for all concerned.
That is why it is imperative that the real estate industry acts now to enforce a higher standard of service for all consumers.
Mohd Ismail is chief executive of PropNex. The opinions expressed are his own.
Source : Today – 28 Aug 2008