For many Singaporeans, buying or selling a home is a key milestone and probably the biggest transaction they will handle in their lifetime. It involves a lot of legwork, requires careful research and consideration, and can be a tedious task.
Many tech-savvy Singaporeans are turning to online property portals and listing websites to conduct research and explore their options. With so much information available online, it raises the question: can you DIY the entire process?
The obvious consideration here is cost. Some people opt for the DIY route because they want to save on paying a commission fee to a property agent. However, they can sometimes end up being shortchanged in the market or face difficulties handling the paperwork and legal matters arising from unfamiliarity with the buying and selling process.
Basically, if you don’t get it right, you might end up with a costly mistake — and this can cost even more than the commission fee that you were trying to save on.
While it’s not compulsory to engage a property agent, engaging one makes a lot of sense if you have little to no knowledge of, or experience in, handling property transactions.
If you think that you should bypass property agents because all they do is post advertisements on various platforms, you’re absolutely wrong. Here’s why it pays (pun intended) to engage a property agent.
What Does A Property Agent Really Do?
A property agent is like a middleman who is paid a commission to find the right match between buyers and sellers.
However, many people seem to have a misconception of what property agents can help with. They are often mistaken for financial advisors, because their job scope could include calculating your finances and assessing your eligibility to buy or sell a property.
Agents also often advise on areas pertaining to guidelines and restrictions for home loans, stamp duties and the various fees payable when you purchase or sell property, as well as provide information on market trends so you can decide whether it’s the right time or price to sell or buy.
Besides these, how else can a property agent help you?
1. You get professional advice on pricing and help with negotiating prices
If you’re a seller, one of the primary roles of a property agent is to provide advice on how to sell your home for the highest possible price in the shortest time.
There’s a lot of analysis that goes into pricing. Price it too high, and you may find your listing grow stale after many months on the market; price it too low and you might not get your money’s worth (or buyers might think there’s something wrong with the property).
While agents can’t dictate your property’s pricing or market value, they can provide you with all the relevant facts and figures to help you set a realistic price range for your property. The data sets could include variables such as the average sale prices of homes in your area, average psf cost of homes similar to your own, and the average time that homes in your area spend on the market.
Likewise, if you’re a buyer, a good agent would be able to give you advice on the prices of properties you’re interested in, helping you to avoid paying more than you should. They would likely have a good idea of the prices of similar properties in the neighbourhood and can help you negotiate a better deal when you’re ready to express interest in a property you like.
With sellers naturally wanting to sell their property at the highest price possible and buyers wanting to bargain for lower prices, the negotiation process can get pretty tough and long drawn. Agents with good persuasion skills can help to handle this and achieve the best outcome for both parties.
2. An agent can market your home, shortlist properties and coordinate viewings for you, saving precious time
Attempting to conduct viewings or marketing your property on your own can be time-consuming and require a lot of coordination work.
It can take many house viewings before you finally find your dream home. Given that it’s now a buyer’s market (since there are many choices available), decision fatigue can pose a real problem.
An agent can shortlist properties that fit your criteria and coordinate viewings for you, saving precious time. If you’re a typical Singaporean working a full-time job with long hours, house-hunting may take up far more time than you can spare.
If you’re a seller, your agent can help take visually-appealing photos, or create videos or virtual tours to market your home and use these to advertise your home in various platforms to reach out to prospective buyers.
An agent can also help to screen buyers who aren’t serious to avoid unproductive visits, increasing the chances of a likely sale.
3. Property agents have access to information that you are not privy to
Property agents have access to information, listings and platforms that you won’t have.
As a DIY seller, there are some platforms which you may not be able to advertise on because you do not meet specific conditions such as being a registered property agent or paying some sort of subscription fee.
This limits the exposure and visibility of your property, which in turn, affects the potential offers you would receive. Property agents would be able to use the marketing channels available to them to maximise your property’s visibility on the market.
If you’re a buyer, the property agent can give you “insider info” on the upcoming developments or yet-to-be-listed properties that match your criteria.
They also typically have access to details that the general public may not be privy to, such as how long a unit has been on the market and newly available units that may not be listed online yet.
The property agent would likely have his own database of buyers and sellers, and would be able to tap on his network of fellow agents’ databases too to help you find the right match.
4. The agent can explain and go through the paperwork for you
Successful property transactions require a thorough knowledge of specialised law and regulations, and the paperwork that goes into it is definitely not child’s play.
The property agent can walk you through all the clauses in the various documents that are involved in the property transaction, making sure that you understand everything before you sign. This is an important point as you will be legally bound by those documents once you’ve inked your name on them.
The agent should be able to answer your questions about the terms and conditions in the documents, but if there are more in-depth legal queries you have, you should seek professional advice from a lawyer.
The agent can also help check whether the transaction is legit, such as confirming the ownership of the property and verifying the property details, or checking on the buyer’s eligibility to purchase the property so the sale doesn’t fall through.
Engaging A Qualified Property Agent
With around 30,000 property agents in Singapore, how do you get around to choosing the right one?
When you’re looking for an agent, it’s important to ensure that they are registered with the Council for Estate Agencies (CEA).
CEA is a statutory board that regulates the real estate agency industry in Singapore. They license and register property agencies and agents respectively.
It’s important to note that only registered property agents are legally allowed to handle property transactions.
Aspiring property agents have to fulfil certain criteria that include passing the Real Estate Salesperson Examination, and not have a history of fraud, dishonesty, or a breach of fiduciary duties.
You can check your agent’s credentials by keying in their name, registration number (this can be found on their name card and their Estate Agent Card) or mobile number on CEA’s Public Register.
The Public Register also has a listing of each agent’s latest transactions so you can see how active the agents are and which neighbourhoods they are familiar with.
While an agent commission is an added cost, it could be a reasonable expenditure to save yourself the hassle of learning about all the procedures, legal requirements and paperwork involved.
So yes, you’re paying for their expertise and knowledge — but how much should you pay them?
You’ll be happy to know that an agent’s commission is actually negotiable; there is no minimum or maximum percentage set by CEA.
That said, you should discuss the commission rate with your agent before any work starts. Factors that would influence the commission rate include the scope of work you require from the agent, and the time frame you would want the transaction completed.
Once it’s decided, ensure that the agreed commission rate, scope of work, as well as the terms involved are all documented in CEA’s Prescribed Estate Agency Agreement. This is a contract that serves to protect your interests and that of the agent.
Your agent will also ask you to fill in a Customer’s Particular Form. This is a compulsory form and is one of the measures that property agents must take to prevent money laundering and counter terrorism financing in Singapore.
Other important things to note:
- You can have either an exclusive or non-exclusive relationship with your agent. This means you can appoint one or several agents for the property transaction.
- Commission fees must be paid to the property agency, not the agent. There could be GST levied on the commission, so it’s best to check with the agent and document this in the Estate Agency Agreement.
- You should never hand over cash to the agent for payments related to the property transaction, such as down payment for HDB flats, conveyancing fees et cetera.
- You must be your agent’s only client in the transaction. The agent cannot represent both seller and buyer to prevent conflict of interest.
At the end of the day, buying and selling a property can be a time-consuming and unfamiliar process. If you are unclear about what to do, or simply don’t have the time for it, then it could be worth paying a property agent to handle the transaction for you.
For more tips on engaging property agents, you can visit CEA’s website here.
This article was written in collaboration with the Council for Estate Agencies.
Featured Image Credit: Shutterstock
