WHAT IS THE SCOPE OF YOUR PROPERTY AGENT? Expectation of a Property Agent
As much as Aaron is open to help with questions and education with regards to the property market in Singapore, we are unable to provide free consultation and free information for customer-specific situations. Hence, we are here to explain more on the scope of a property agent, what their responsibilities are and what are extra value-adding services agents provide.
When a buyer or seller chooses an agent, many times it's by referral. It's great when the person is referring an agent to you out of a good experience with the agent previously or just being sincere in wanting to recommend someone good. However, it's also possible that the person that is referring an agent is getting some agent referral fee. So one should always consider such possible agendas when choosing an agent to act for you.
Next, when considering pricing and negotiation as a buyer, there are some common beliefs which Aaron personally does not agree with. Firstly, a decision on what is a good price.
Some buyers believe that a good price is when you go to propertyguru, check out the listing price of say 1.2million, and if you manage to negotiate a price lower that 1.2million then it is a good price. That's not how things work.
Also, there are some buyers who believe that a seller has to sell at 'market value' similar to other units in the same area, or that they have such good negotiation skills to make sellers agree to the prices they want. Again, this is not the way to handle a purchase and thus vital to get a competent agent working for you.
Scope of Agent's responsibilities
Sometimes, buyers or sellers only do research on buying or selling a property when they run into issues or complications dealing with an agent in a transaction. Perhaps they came across Aaron's youtube videos and learn a bit more of what to expect and what to look out for. Today, we would also want to clarify about the scope of an agent's responsibilities and specifically what agents are not obliged to do for sellers/buyers.
In the rental market, prior to the formation of the Council for Estate Agencies (CEA), the agent was expected to find the landlord/tenant and manage the unit from the start till end of the lease, liaising with counterparty, acting as the line of communication while solving any possible problems that arise.
After the CEA, the scope of agent's duties regarding rental has changed. Agents are not obliged to manage the unit for the whole period of the lease. When acting for the landlord, their duties are to find the tenant, settle the paper work and ends after the handover.
Agents that liaise with both parties when there are problems that arise or even do the handover when the lease ends are just providing extra services, providing value to their clients that engage them.
In fact, $1000 for the agent also includes the money they spend on advertising, paperwork and they do not pocket the full $1000.
Private transactions are relatively straightforward for the agent too. In private selling, the agent selling the unit finds the buyer, settles the otp and then hands the otp over to the lawyers to start the legal process. The agent's job technically stops after handing over to the lawyers.
Also, after the otp has been exercised, the seller has no obligation to open the unit for the buyer, be it to plan for renovation, consider fengshui or other requirements. If the seller is kind and willing enough to facilitate these openings for the buyer, note that the agent also does not have the obligation to be there.
For private buying, the buyer agent is tasked with finding the property, negotiating the purchase price and conditions, while exercising of the otp should be at the law firm. Here, agents accompanying buyers to the law firm is also an additional service being provided. Agents going to the law firm with buyers is helpful to help explain certain technical jargon and help communicate the buyer's expectations to the lawyers.
The agent's responsibilities here end after the lawyers take over and if there are any issues or complications that arise with the transaction, the buyer should be going to the lawyer.
In HDB transactions, the process is more complicated for agents with there having more processes and a stricter process controlled by HDB.
When handling HDB selling transactions, it's vital for the agent to conduct the planning process. This planning includes doing all the necessary calculations, planning the transition, before doing up the intent to sell, advertising, finding a buyer, negotiating. It's important to ensure that the whole process is well thought through, following the schedules and timeline
that takes HDB standard timings into consideration. (such as the 21 days for otp)
For HDB, there currently is one appointment of completion and due to covid, the agent is also not involved. The HDB process has almost entirely eliminated the agent's involvement, with everything accessed via singpass, emails and sms to the buyer/seller themselves. It might be beneficial for all if HDB does include agents in the process to be aware of how things are proceeding or provide assistance where necessary.
Overall, by having an understanding of the agent's role and scope of responsibilities, it's better and easier to manage expectations. By having a competent agent that knows what he is doing, and is able to bring you through the whole process, your property buying and selling journey would definitely be a more fruitful, and peaceful one.
Watch how Aaron goes through the scope of your property agent and learn what to look out for!