Buying Hdb Flat? You Don't Need To Pay Seller's Agent

[yenfong 0]

Buying HDB flat? You don't need to pay seller's agent

Case gets more complaints from buyers without agents who are misled into paying such commissions

By Tan Hui Yee

MANY HDB flat buyers who bypass estate agents to make their purchases are still being fleeced for thousands of dollars in commissions - by the sellers' agents.

The Consumers Association of Singapore (Case) has received a growing number of complaints from home buyers who were unaware they are not required to pay the fees but who were misled into coughing them up.

Independent buyers complain that the sellers' agents inform them they have to pay the commissions just before the purchase documents are signed. This leaves the buyers with little time to find out their rights.

The buyers, in fact, can opt out of paying the fee - usually 1 per cent of a flat's price - if they say upfront that they will not be using the agent's service. This means the buyer will have to do the paperwork himself.

Case received 85 complaints about the payment of commissions last year, up from 60 the year before. In the first two months of this year, 11 such complaints were received.

The complaints are rising at a time when more buyers and sellers are choosing to deal without agents. According to the Housing Board, 3 per cent of last year's 31,000 resale housing applications - about 930 deals - were made via its online e-Resale system, which caters specifically to buyers and sellers dealing without agents.

The figure has gone up from 2.5 per cent in 2004 and 2 per cent the year before.

Property agencies say more buyers than sellers usually choose to go it alone.

The Institute of Estate Agents receives an average of 30 inquiries a month on the payment of commissions.

There is no law fixing the fees to be paid to agents for property purchases. Agents hired by HDB flat sellers tend to charge independent buyers a 1 per cent commission.

This fee is usually not levied on those buying private property independently. The managing director of C&H Realty, Mr Albert Lu, said this is because there are more restrictions on people buying HDB flats - on their age and marital status, for example - and therefore more paperwork to process.

The assistant vice-president of property agency ERA Singapore, Mr Eugene Lim, added: 'Ninety per cent of HDB flat buyers don't have the time, or don't know the procedures. The agent has to walk the buyer through the whole process.'

But buyers like Ms Jessica Tee, 32, beg to differ. The bank manager and her husband, who bought a four-room flat in Pasir Ris last year for $250,000, said they were misled by the seller's agent into paying the fee.

The agent asked them to sign an agreement stating that they would pay him the fee while sealing the deal for the flat.

Ms Tee said: 'It didn't feel very right. It was a bit strange, because he didn't represent us. But he said it was procedural.'

They gave him the benefit of the doubt and signed the form, only to find out later that it was optional. Ms Tee said she would have done the paperwork herself if she had known beforehand that a fee was payable.

Both Case and the property agencies approached - ERA, C&H and PropNex - stated that agents have the responsibility to make it clear to independent buyers upfront that they would be charging a fee.

But Mr Lu conceded it was unlikely many agents would voluntarily tell buyers they could opt out of paying. He advised buyers to broach the topic before agreeing to the deal.

Case executive director Seah Seng Choon stated: 'Home buyers should not pay a commission if they have not consented to using the service of the agent.'

tanhy@sph.com.sg

[Mousehunt 0]

Sigh..... I am one of the victims......

[wng 0]

have to very careful....! i am one of the victims too!

[currahee 1]

so can one just opt out of this agent fees thing by just doing all the paper work?

the HDB site already made the paperwork quite easy le

[vincelee 0]

Yes you can, Do inform the agent beforehand that you are doing the paper work yourself and not paying him commission

As agent didnt receive commission from you, he is not representing you.

therefore he will not help you neg the price from the seller.

so can one just opt out of this agent fees thing by just doing all the paper work?

the HDB site already made the paperwork quite easy le

Edited August 16, 2007 by vincelee

[v2offer 0]

Yes you can, Do inform the agent beforehand that you are doing the paper work yourself and not paying him commission

As agent didnt receive commission from you, he is not representing you.

therefore he will not help you neg the price from the seller.

Yes. The seller's agent will not represent u if u do all the paperwork.... Any mistake done, u r responsible for that.. Also the agent will may tell u a high last offer to scare u off, unless u willing to pay those sky high price....

[simplelife 0]

some agt wants to earn extra by not cobroking and insisted to get the direct buyer to pay them a fee.. this can only be done when resale flats are limited and more buyers than sellers..

just ask yourself whether you like the flat so much and is it worth it? i personally think that resale market is never clean.. if you want a fare deal, buy brand new

[choc79 0]

i am one of the buyers looking actively for a flat, thinking that i can do without the help of an agent by preparing all the documents that is required. However, as most of the sellers engage agents themselves, when we go thru these agents to express interest in the deal, it is unfortunate that it is market practise that the buyers pay these agents the 1%. I had an unhappy experience (unhappy cos he was **** bloody rude) with an agent from Roots Realty whom insisted that i pay 1% even when i specify that i dun use his service and am prepared to do my own paperwork. When i spoke to my cousin whom is a property agent (shes neutral in this situation, aint acting for me etc), she explained that its difficult to get a hse that u r interested in if one refuses to pay the seller's agent as the agent might refuse to deal with u straightaway and ur hunt for the hse can go on and on. Reason is that there are some paperwork that the agent will need to submit for u blah blah. Another alternative is to negotiate with the agent the amt to be paid to him even if u dun engage his full services....pondered for sometime but i guess saving on this part is rather difficult..

[raincole 0]

Go straight to seller! Or ask your cousin to "act" for you lor and then give her Hong Bao.

[choc79 0]

Go straight to seller! Or ask your cousin to "act" for you lor and then give her Hong Bao.

aiyo hw to when u dun even know where the flats which are gg to be sold at?

dun tell me u wana call up the agent, let the agent bring u up to view the flat then someday later, go up to the seller straightaway? If tats the case,i tell u, u r definitely gg to be scolded +++ by the agent

[christinetan 0]

but if your cousin is willing to help, it's as if there's co-broking and i suppose you can then escape paying the seller's agent? Not too sure abt this either... but of coz like mentioned, some may not even allow co-broking... but really, seller's commission to the agent is more than enough to cover the "paperwork" to ensure the transaction is smooth and all... so isn't it an obligation on their part... sigh!

[zirhk3355 1]

aiyo hw to when u dun even know where the flats which are gg to be sold at?

dun tell me u wana call up the agent, let the agent bring u up to view the flat then someday later, go up to the seller straightaway? If tats the case,i tell u, u r definitely gg to be scolded +++ by the agent

I dun understand why is there a concern to do that? At the end of the day, you are paying back the agents in their own coin. For me, really, I will simply agree to pay the 1% comm VERBALLY but NEVER sign any comm agreement, reason being I am not sure if I want to buy this flat and I am worried that if I signed already then I look for other flats also have to pay you comm. Period.

Wait, I must qualify; I am not saying that I will not pay the agent AT ALL, but I want to reserve the rights NOT to pay if s/he is screwed up. Without the comm agreement, there is almost 0% chance that the agent can collect any money from you, unless s/he go and record your verbal agreement, which could also be challenged in court that the recording was taken out of context and/or tampered with.

Am I being unfair? I really do not think so! As long as I do not make the agent do things for me. In fact, it will ONLY be unfair when one agent collects commission from both sellers and buyers; who is he really representing? In a dispute, who will he side? Oh dun tell me he will be a "neutral party"; how can a neutral party be collecting money from you?

This is the same for many other industries (if not all), especially so for legal services. Guys, think about this: If it is absurd to have one lawyer representing the defendant and the plaintiff, why is okay for one agent to represent both buyer and seller?

Edited September 21, 2007 by zirhk3355