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