There are sometimes shady tricks and methods of the trade within the industry being performed by agents who are either not skilled or knowledgeable enough to service clients, or looking for short cuts to success. Today, we are divulging some of these little secrets to help sellers and buyers be more informed and learn to distinguish the good from the bad.
Co-broking
To understand what goes behind some of the tactics and secrets discussed today, we need to understand the motivations of agents. Agents are expected to act in the interests of the client that engages them, but as their compensation comes in the form of commissions, there is a bit of grey area of what actually motivates agents when these two come into conflict.
Co-broking is the act of two agents coming together to broker a property transaction together, and is considered a must in the CEA guidelines. That means, an agent should not stop other agents from co-broking with him/her when approached as this opens up more opportunities for sale and a higher price offer from potential buyers. In reality though, things might be different. Why?
In HDB, there is no issue with co-broking as the buyer agent and seller agent both gets paid a commission by the buyer and seller respectively. For private property though, the standard process is that the buyer does not give any commissions to the buyer agent. So, the buyer agent's share of the commissions actually comes pre-agreed from the seller agent who is paid by the seller.
This creates a situation where seller agents might not want to co-broke in order to earn the full commissions. Of course, this goes against CEA guidelines so fines or suspensions might be possible for offending agents.
Checking on your agent
To judge and check on the agent, first we need to understand the roles they play. When picking a buyer agent, the main thing is a responsive agent. As long as you get a responsive agent, more or less he/she will be able to act for you and find possible listings that meet your needs.
When engaging a seller agent though, there are more things to consider. Other than the prerequisite of the agent being responsive, in order to reply to you and potential buyers quickly, you need to judge how serious he/she is in selling your unit. Is the agent open to co-broking with other agents that approach him? Is the advertisement exposure correct or not?
As a good competent agent is not afraid of being tested, the fastest way to check on the seller agent as a seller yourself is to pose as a buyer or buyer agent. You would then be able to find out if the agent is responsive or not, or if he/she is accepting co-broking offers. Only a dubious agent would be afraid of being tested, as there is nothing to fear if one is acting right.
Listings on property portals
Next, we look at the listings on property portals.
On these portals, Aaron tends to recommend PropertyGuru as the advertising cost incurred forms a natural barrier for listing fake or expired listings. Expired listings are listings where the unit has already been sold but still are available to be found online. As for fake listings, there is no such unit depicted by the photos in the address listed. We treat both expired listings and fake listings the same, they are a dirty tactic of certain agents.
Why would agents want to keep these fake or expired listings online and available?
For the simple reason of having a source of leads generation. Whenever a direct buyer goes to this type of listing and contact the agent, he might get answers ranging from "the unit has been sold" to "the seller is reconsidering" and more, signifying that the unit advertised is not available for viewing.
It does not stop there. The agent then 'naturally' suggests an alternative unit or some other available listing they have on hand to introduce to the buyer and asks if the buyer is interested. Sounds great right? The agent is actually offering to help.
Here's the catch. After going to the alternative unit for viewing, the buyer is informed that this unit is not the agent's unit and for that, they need to charge a 1% buyer commission as the buyer agent. So, suddenly the direct buyer now has this buyer agent who is asking for a 1% commission when usually the commissions are only paid by the seller. This just feels like an underhanded tactic to bring in buyers whilst also leaving a bad taste for buyers.
Other than warning buyers, seller agents should also be understanding the kind of agents they are engaging.
Multiple advertisements
For sellers, there will be agents that come to you, approaching you to sell your unit.. After you agree, sometimes they will say they are getting other members of their team to advertise for you. This comes with its pros and cons.
To Aaron though, one well crafted advertisement is good enough as everyone is looking at the same places online. Multiple advertisements repeating the same info would not be required, even if it feels like more advertisements would reach more people.
Next, the only person that is going to collect a commission off this transaction is the agent engaged. The rest of the team that is advertising your unit might not be helping to sell the unit. Like earlier discussed, they could be finding buyers and bringing them to other units.
Instead of finding the main lister of the property, the direct buyers end up calling agent B or agent C who then asks for a buyer agent commission of 1%. The buyers then pull out.
The seller thus loses out from missing the potential sales. Sometimes when buyers try to contact agents through the property listings, they take a long long time to respond or do not even bother replying. This is a telltale sign that they are not the main lister and thus do not care as much about the listing. Main listers will respond quickly as they earn the commissions once the transaction goes through.
Conclusion
Hopefully, with us shining a light on these tactics and maneuvers sometimes attempted by agents in the market, buyers and sellers will be more aware of what to look out for!
Watch how Aaron dissects the behaviors and secrets behind agents' actions in his trademark honest and direct way!