The stigma of being called a real estate “agent” has led to many renaming themselves as “marketing directors, sales consultants, etc” to avoid being associated with some of the agents who demonstrate questionable knowledge and dubious sales propositions.
I shared many of these perceptions prior to joining OrangeTee. However, after having worked at close quarters with some agents in the past months, I am beginning to re-evaluate my perception. The headline-grabbing superagents show that, if you are good at the job, you can get rich, very rich. While the payback is good, how many of us are willing to spend our weekends and evenings running from apartment to apartment, rain or shine, to stand at showflats for weeks and repeating your sales pitch five to six times a day, to bring a buyer to 20 apartments, only to see him or her buy from another agent?
Many are trying to make a decent living by selling a product and, as with every sales job, there is a reasonable boundary that any good salesperson will not cross and many do not. However, the unethical and unprofessional practices by a small minority have tainted the whole industry.
As such, the introduction of the new regulatory framework with the formation of the Council of Estate Agents is welcomed by many in the agency with open arms. Under the new framework, the entry requirements to be a salesperson (agent) will be raised. To ensure continued ethical and professional standards, the estate agency now has more teeth to weed out unethical agents, who will find it extremely difficult to switch agencies when faced with disciplinary action among many other requirements.
With the new regulations, expectations of better practices have probably been raised and rightly so. The next step will be how to handle such expectations. Getting higher educated and better trained people is no guarantee of ethical practices – just look at what unravelled during the last global financial crisis. Even locally, black sheep have managed to sneak into professions which have been regulated for years. Thus, the best protection remains with the buyers, who should expect themselves to play a role in helping to police the salespersons, as the agents will be referred to under the new regime.
Firstly, buyers need to realise that it is not reasonable to expect “good” advice from a seller’s salesperson because that salesperson is contracted to sell by his client, the seller, to get the highest possible price. It is just like any profession with a client-agent relationship; lawyers, accountants, investment bankers – which is to take care of the interests of the client.
Thus, as long as there is no misrepresentation or provision of false information, buyers should be expecting the seller’s salesperson to highlight all the good points about a property and downplaying the bad, and evaluate the proposition themselves. It is no different from buying anything.
Secondly, no amount of regulation can help buyers who choose not to do their homework and find out the correct questions to ask. There are many websites that provide excellent content to help buyers in this. Comprehensive data are widely available, least of which from the Urban Redevelopment Authority’s website. Why quibble over paying $80 to get access to the vast information in the URA, including detailed past transaction records when buying a $1 million property?
Better-off buyers who get a headache from doing their own research might want to consider hiring a “buyer” salesperson to help them source for a property. This practice, which has caught on in some of the more developed countries, offers many benefits.
Firstly, it establishes a clear client-agent relationship which ensures that the salesperson takes care of the buyer’s interest and the buyer can expect and demand good advice.
Secondly, it removes the motivation for the salesperson to “sell” one house over another and to be able to show all properties that are available for sale, not just properties which will provide a co-broking fee.
Lastly, these agents could help secure a better price, being better versed in the negotiation process. Having a middleman can help to remove the emotive aspect of buying a house and this could be important in preventing the buyer from over-paying.
The bottomline is that, while the industry has been shaken up for the better, the buyer’s role in the transformation is also important. Buyers need to get better informed or be willing to pay for information and advice, as the property is probably their single largest investment of a lifetime.
By Tan Kok Keong, head of the Research and Consultancy Department at Orange Tee.