Consumer education for ‘DIY’ resale sellers
Feb 15, 2012
Sheena Chua
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National Development Minister Khaw Boon Wan revealed recently that one in 10 Housing Board (HDB) resale transactions in 2011 were completed without the aid of real estate agents.
(10% of HDB resale transactions last year were done without a property agent. Image courtesy of Thinkstock.)
In light of this statistic, the minister announced that the Council for Estate Agencies (CEA) would be helping homeowners better understand their rights should they opt to conduct such ‘do-it-yourself’ (DIY) resale deals, as part of the council’s ongoing consumer education efforts.
Khaw noted on his Housing Matters blog that among the feedback he received from members of the public were two opposite suggestions: preventing property agents from handling HDB resale transactions, and prohibiting such agent-free DIY resale transactions.
However the minister found both inappropriate to carry out, explaining that the HDB already provides homeowners who want to conduct DIY resale deals with a checklist of requirements that covers issues such as eligibility and financing.
Although industry analysts commented that there was currently no observable DIY trend, they admitted that it is a common thing for buyers and owners to choose to undergo at least a part of the transaction process without an agent.
The reason is simple: buyers and sellers who do without agents can avoid paying more for the agent’s commission. Real estate agents generally charge about 1% of the transaction price for buyers and 2% for sellers.
Speaking to The Straits Times, SLP International head of research Nicholas Mak explained that although the cost-cutting benefit is attractive, going DIY could be tricky because of all the unfamiliar paperwork involved.
To tackle this obstacle, some DIY sellers like youth worker Kumar Suresh, 39, will only rope in an agent to handle the paperwork. Suresh, who is aiding his sister in selling off her three-room HDB unit at Jurong West, told The Straits Times that he will ultimately complete the resale deal on his own.
“Even with [the agent] doing the paperwork, I can save up to $5,000. By dealing with the buyer myself, I can also decide what is a reasonable price rather than having an agent who might coax me into accepting a figure,” he said.
Business owner Vera Chua, in her 30s, also intends to sell her four-room flat at Tiong Bahru without an agent. She told The Straits Times that she would be engaging a lawyer to deal with the paperwork complexities.
“I'm doing it to save on the agent's commission and learn how the process works so I can use the skills in future. And because I conceptualised the flat's decor myself, I think I'm the best person to present it and match it to the new owner,” she explained.
Khaw, meanwhile, assured consumers that his “bias will be towards the consumers, but to do so in a fair manner”. In his blog post he acknowledged suggestions from members of the public, such as improving the quality of agent training, and upping agents’ minimum education qualifications.
The minister also let on that the council is working on shortening the time taken to resolve disputes between agents and consumers.
Parties with disputes over the Estate Agency Agreement—which states for the record the agreed commission amount—can look to the CEA’s resolution scheme for mediation and arbitration.
Since last January, all real estate agents have to register with CEA, which investigates complaints and imposes the necessary penalties. The council told The Straits Times that some aspects of its training courses that could be worked on include professional ethics, and business leadership and management.
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Related Categories: HDB and Public Housing, Selling, HDB
Tags: agents, CEA, Council for Estate Agencies, DIY resale, do-it-yourself resale, HDB, HDB flats, HDB resale, Housing Development Board, Khaw Boon Wan, Ministry for National Development, MND, property agents, real estate agents, Singapore resale HDB market
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