Do property agents act in their clients' best interests? Industry players respond to criticism
SINGAPORE: The professional standards of property agents have improved over the years, industry players said following online criticism that some agents fall short when it comes to helping their clients and acting in their best interests.
This comes after the Council for Estate Agencies (CEA) said on Monday (Oct 21) that a property agent was fined S$30,000 and suspended 12 months for being unprofessional and unethical.
PropNex Realty agent James Ngu failed to tell his client that the seller of a condominium unit would accept a price of about S$1.02 million as he tried to negotiate a higher commission for himself, did not declare his conflict of interest in getting a co-broke commission, and failed to tell his client a counter-offer from the seller that involved getting commission from his own client.
Ngu’s client eventually contacted the seller's agent directly and bought the unit at S$1.04 million. Ngu’s “wrongful conduct” caused his client to suffer a loss of about S$20,000 to S$30,000, CEA said.
Some Facebook commentators responding to CNA's article said agents like Ngu were nothing new, with some stating they have experienced agents who have played up certain property, concocted offers and started bidding wars just to get higher commission.
“As (per) my experience, there're too many unethical and unprofessional property agents,” user Derrick Woon wrote. “They only want money.”
Added user Tann Chee: “I have never once had a good experience with property agents. Never trust the testimonials they state on their websites, leaflets and online property portals. They don't have your interests at heart. They care for your commission only.”
Consumers Association of Singapore (CASE) executive director Loy York Jiun told CNA on Tuesday it has received 153 complaints against the real estate industry over the past five years, with the number of complaints increasing from 29 in 2017 to 37 last year.
These include service lapses like not helping a client with the process of applying for a housing grant, and making misleading claims like requesting commission from both the buyer and seller, something that is not allowed.
“STEADY PROGRESS” MADE IN RAISING STANDARDS
But a CEA spokesperson told CNA on Tuesday it has observed an “overall decrease” from 2017 to 2018 in the number of complaints related to agents acting unethically or against their clients’ interests.
“These form a small proportion of the complaints that CEA receives,” the spokesperson said, noting that the bulk of complaints in 2018 involved service lapses like being late for viewings and poor communication, which are not regulatory infringements.
According to CEA, the number of complaints it received regarding agents “not acting in client’s interests” – including failing to convey offers or counter-offers – dropped from 42 in 2017 to 39 last year.
Complaints regarding agents “not acting ethically and fairly to other persons other than clients” – including misrepresenting facts and conveying false information – also dropped from 43 in 2017 to 26 last year.
The CEA spokesperson also pointed out that findings from its 2018 public perception survey on the real estate agency industry showed that consumer satisfaction with property agents has increased over the years.
For instance, 85 per cent of consumers in 2018 were satisfied with the service provided by their property agent, up from 79 per cent in 2015, while 72 per cent of consumers indicated that they would engage the services of a property agent in future transactions, up from 60 per cent in 2015.
“The uptrend in consumer satisfaction with their property agents’ services is an indication that the industry has made steady progress in raising its professionalism and ethical standards, and improving the service to its clients,” the spokesperson said.
“However, as with any other industry, there will always be errant individuals and companies. CEA will not hesitate to take the necessary and appropriate disciplinary action against such individuals and companies.”
PROPERTY AGENCIES REACT
Singapore Estate Agents Association (SEAA) president Thomas Tan told CNA it was unfair to paint the industry with the same brush because of a few bad eggs.
“Improvement is definitely something that we can work on,” he said. “But if you talk about whether it’s a market norm – I think it’s not a fair statement to say that because of one or two persons’ actions.”
Mr Lee Sze Teck, research director at real estate firm Huttons Asia, said professional standards of agents have improved since the formation of CEA in 2010, adding that agents are now more consultative with clients compared to in the past when they might have focused on pushing clients to buy or sell certain property.
However, he acknowledged that “you can’t really say (the industry) is 100 per cent” free of black sheep. “There will be some cases here and there,” he added.
ERA Realty Network’s key executive officer Eugene Lim said the industry has “come a long way” since CEA started operations, adding that “most of the bad hats have been weeded out and taken to task”.
“The vast majority of agents are law-abiding and professional, but this is also largely dependent on the culture of the agency,” he stated.
“Some agencies are deemed more aggressive, pushing buyers to projects with higher commissions even at the expense of the clients' limited financial abilities, resulting in cases where gains are non-ethical.”
HOW ARE AGENTS TRAINED TO BE PROFESSIONAL?
Nevertheless, SEAA’s Mr Tan said prospective agents learn about professional standards even before they become one, noting that the Real Estate Salesperson course and exam cover conduct and ethics.
“Once they enter an agency, the agency will further reinforce this through their regular training” like the Core Professional Development (CPD) courses, he added.
At Huttons Asia, Mr Lee said agents have to fulfil a minimum of six hours of training each year, of which three hours must be CPD courses. “These classes will cover core conduct, professional standards and all these,” he added.
Mr Lee said the training sessions help remind agents “of the professional standards that they must uphold as well as to have the best interests of the client in mind”.
“So, other factors like the commission should not be a deciding factor,” he stated, proceeding to give an example of potential conflicts of interest.
“Maybe a bigger property pays me high commission, I’ll go ask them to buy this; another property pays me a lower commission, I’ll tell them not to buy. This is something we remind our associates not to do.”
ERA’s Mr Lim said the firm rolls out regular programmes to ensure its agents “exhibit the highest level of professionalism and integrity” when serving clients, including sharing best practices on professional advisory services by partnering banks and financial institutions.
He added that ERA last year launched the FindPropertyAgent.sg website to give consumers greater transparency on property transactions involving its agents. Their profile pages include past transactions, customer reviews, awards achieved and training completed.
HOW CAN YOU PROTECT YOURSELF?
Before engaging a property agent, consumers should also check CEA's public register of property agents on its website, CASE's Mr Loy said.
"Consumers should check that their property agent is registered with the CEA. They can view various details of the agent, such as his or her disciplinary record and sales transactions, on the public register," he said.
Agent commissions should be agreed and documented in writing, he said, adding that consumers should check previously transacted prices for similar properties to verify that the selling or asking price is reasonable.
The CEA spokesperson said consumers can specifically ask their agents if they are in conflict of interest situations, like if they are from the same property agency as the other party’s agent, or collecting a co-broke commission from the other party’s agent.
"Agents should provide their clients a written disclosure of any conflict or potential conflict of interest," the spokesperson said, adding that this could be in the form of a letter, e-mail or text message.
"If the client accepts and agrees for the agent to continue representing him, the client should similarly provide this approval to the agent in writing."