Thursday, October 29, 2009

How new rules can protect property agents

I REFER to the letter by Mr Chua Khim Leng, ‘New rules should protect property agents’ (Oct 19).

As a real estate consultant for the past 20 years and running my agency in a niche market, I fully understand the plight of many real estate agents, who are disadvantaged because of the lack of rules that clients should abide by when they engage agents to handle their properties.

Many clients do not give exclusivity, as by appointing agents without signing a contract, they can take advantage of the agents’ advertisements and feedback, and then leverage on the prices received to sell direct to friends or neighbours and so avoid paying commission. These clients will also cut commission at the crucial moment of signing the option, say they will not sell or give the sale to another agent who charges lower commission.

An agent who had refrained from closing a sale quickly as the market was improving rapidly, waited and worked to achieve better offers, but was later disadvantaged because the client paid nothing if the sale was not concluded by that agent.

Other agents and buyers are allowed to cut in at the 11th hour. This undesirable situation does not support agents who work professionally and diligently in the interest of their clients.

I have some suggestions:

- Make it compulsory for clients to give and honour exclusivity, whether by written or verbal agreement.

- Appoint one or no more than two agents exclusively for eight weeks, with a termination clause of two weeks’ notice if agents do not perform satisfactorily.

- Explore means to prevent agents from being unfairly treated by clients or agencies.

- Compensate agents who have spent time, produced advertisements and conducted more than a dozen viewings, if soon after their marketing efforts, the sale is concluded through other parties (limit the period of ’soon after’).

- Give recourse to aggrieved agents to address their disputes without them having to resort to civil suits that involve time and more opportunity costs.

Clients play a part to help raise the standard and professionalism of the real estate industry. They must respect and reward agents who are reliable and competent, and appreciate that they work for a living. Of course, there are many honourable and trustworthy clients who become lifelong friends of agents.

Teresa Yao (Mrs)

Source: Straits Times, 29 Oct 2009

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