Is this your first time buying or selling a home? Not sure where to start?
Making property decisions is probably one of the biggest milestones in life, and it’s not easy doing it on your own without the help of an experienced agent.
To help save you time, we’ve put together 6 things to look out for when engaging a property agent:
- Decide if you need a property agent
- Ensure your agent is registered with CEA
- Negotiate your agent’s commission before he starts work
- Sign two important documents with the property agency
- Understand your agent’s responsibility
- Handle your own money
Engaging a property agent
1. Decide if you need a property agent
Contrary to popular belief, it’s not compulsory for you to engage an agent when it comes to buying or selling a property – you can search for or list properties by yourself.
However, if you’re a first-timer, we recommend having an agent on board to ensure all things run smoothly – especially when it comes to the technical and legal bits – and that you don’t get taken for a ride.
2. Ensure your agent is registered with CEA
Not everyone in a suit against a white background is a legit property agent – there have actually been cases of unlicensed property agents trying to pass off as the real deal.
All property agents in Singapore must be registered with the Council for Estate Agencies (CEA) through their respective property agencies.
An unregistered property agent might mishandle the property transaction – and if this happens, you’re not protected by the any property agency.
To see if your agent is registered, ask for his CEA registration number and check it against CEA’s Public Register here.
3. Negotiate your agent’s commission before he starts work
Google may have the answer to almost everything, but information about an agent’s commission isn’t one of them. This is because an agent’s commission is not fixed, and there are no minimum or maximum commission, or industry standard rates.
You’re free to negotiate the amount and components of fees and expenses, as well as terms with the agent before he starts work. (We emphasize: before he starts work!)
Do also check if GST is included in his service – only GST-registered property agencies are allowed to charge and collect GST.
If you’re unsure on whether you’re getting a fair rate, get a few quotations from a couple of agents.
Tip: However, don’t simply go with an agent offering the lowest commission percentage. Each agent operates like a business unit, and sometimes agents may command a higher commission due to their stellar track record.
At the end of the day, you should always go with an agent you feel comfortable with, with a commission rate that you feel is reasonable.
Do also note at this stage that commission should be paid to the agency after the deal is completed, and not directly to the agent.
4. Sign two important documents with the property agency
With all your verbal agreements in place, it’s now time for you and your agent to sign two important documents to kickstart your working relationship:
- CEA’s prescribed Estate Agency Agreement
An estate agency agreement is the binding contract between you and the property agency to protect the interests of both parties. This agreement stipulates the agent’s duties, agreed commission rate, and requires the agent to declare if there is a conflict of interest.
Estate Agency Agreements can be exclusive or non-exclusive. In an exclusive agreement, only one property agent is employed to help you source for leads and drive the transaction; whereas in a non-exclusive agreement, you can appoint more than one agent.
Why go with an exclusive agreement? Since you’re liable to pay commission to the appointed agency (without them having to compete against other agents), chances are, they’ll be more motivated to help to close the deal.
Tip: In an exclusive agreement, even if you end up transacting through another property agency, you’re still liable to pay commission to your appointed agency.
You can find the full list of prescribed exclusive and non-exclusive Estate Agency Agreement forms here.
- Customer’s Particulars Form
Once you have decided and confirmed your agent, you must complete the compulsory Customer’s Particulars Form. This is more for your property agent’s sake – the CEA mandates that all agents have their customers fill this up to prevent money laundering and what-have-you. Nothing personal!
Your agent will be able to supply you with this form. Just fill in your particulars, attach your signature, and hand it back to the agent.
5. Understand your agent’s responsibility
Your agent should always be professional and act in your best interest. He should only represent you in a property transaction.
Check out this article for some ‘no’s on what your agent is not allowed to do.
6. Handle your own money
It is illegal for your agent to handle certain money related to the transaction.
Here’s a list of fees your agent is allowed to handle:
As much as possible, you should pay your payee via verifiable payment modes like crossed cheques and bank transfers.
Click here for a full breakdown on the monies your agent is allowed to handle.
You, your agent and your property
And there you have it: 6 easy steps to engage your first property agent. Still have questions? Join our friendly community of fellow home seekers and get help from others on a similar journey as you.
The above information is provided by the Council for Estate Agencies.