Should You Engage A Property Agent Or DIY?
For many Singaporeans, buying or selling a home is a key step and possibly the biggest transaction they will ever make in their lifetime. This involves a lot of legwork, requires careful research and consideration, and can be a tedious task.
Many tech-savvy Singaporeans turn to online real estate portals and listing websites to conduct research and explore their options. With so much information available online, this begs the question: can you DIY the whole process?
The obvious consideration here is the cost. Some people go the DIY route because they want to save money on paying a commission to a real estate agent. However, sometimes they can end up being missed in the market or have difficulty dealing with the paperwork and legal issues arising from not knowing the buying and selling process.
Basically, if you don’t get it right, you could end up with a costly mistake – and it can cost even more than the commission fees you were trying to save on.
While it is not mandatory to hire a real estate agent, hiring a real estate agent makes a lot of sense if you have little or no knowledge or experience in managing real estate transactions.
If you think you should bypass realtors because they are just posting ads on various platforms, you are absolutely wrong. Here’s why it pays (pun intended) to hire a real estate agent.
What is a real estate agent Really Make?
A real estate agent is like an intermediary who receives a commission for finding the right match between buyers and sellers.
However, many people seem to have a misconception about what real estate agents can help. They are often mistaken for financial advisers because their job could include calculating your finances and assessing your eligibility to buy or sell a property.
Agents also often provide advice on areas relating to guidelines and restrictions for home loans, stamp duties, and various fees payable when buying or selling a property, as well as providing information on market trends. so you can decide if it’s the right time or the right price to sell. or buy.
On top of that, how can a real estate agent help you?
1. You get professional price advice and help negotiate prices
If you are a seller, one of the main roles of a real estate agent is to provide advice on how to sell your home for the highest possible price in the shortest possible time.
There is a lot of price analysis. Price it too high and you may find that your ad is out of date after several months on the market; price too low and you might not get what you pay for (or buyers might think something is wrong with the property).
While agents cannot dictate the price or market value of your property, they can provide you with all the relevant facts and figures to help you set a realistic price range for your property. Data sets can include variables like the average selling prices of homes in your area, the average cost per square foot of homes similar to yours, and the average time homes in your area spend on the market.
Likewise, if you are a buyer, a good agent will be able to give you advice on the prices of the properties you are interested in, thus preventing you from paying more than you should. They would probably have a good idea of the prices of similar properties in the neighborhood and can help you negotiate a better deal when you’re ready to express your interest in a property you love.
With sellers naturally wanting to sell their property for the highest price possible and buyers wanting to negotiate lower prices, the negotiation process can become quite difficult and time consuming. Agents with good persuasive skills can help manage this and achieve the best outcome for both parties.
2. An agent can market your home, select properties, and coordinate viewings for you, saving you valuable time
Trying to visit or market your property on your own can be time consuming and require a lot of coordination.
It may take many visits to the house before you finally find your dream home. Given that this is now a buyer’s market (as there are so many choices), decision fatigue can be a real problem.
An agent can select the properties that match your criteria and coordinate the consultations for you, saving you valuable time. If you are a typical Singaporean working full time with long hours, finding accommodation can take a lot longer than you can spare.
If you are a seller, your agent can help you take visually appealing photos, or create videos or virtual tours to market your home and use them to advertise your home on various platforms to reach potential buyers.
An agent can also help select buyers who are not serious to avoid unproductive visits, thus increasing the chances of a likely sale.
3. Real estate agents have access to information you are not aware of
Realtors have access to information, listings, and platforms that you won’t have.
As a DIY seller, there are certain platforms that you may not be able to advertise on because you do not meet specific requirements such as being a registered real estate agent or paying sales fees. ‘subscription.
This limits the exposure and visibility of your property, which in turn affects the potential offers you would receive. Realtors could use the marketing channels available to them to maximize your property’s visibility in the market.
If you are a buyer, the real estate agent can give you “inside information” on upcoming developments or unlisted properties that match your criteria.
They also usually have access to details that the general public may not be aware of, such as how long a unit has been on the market and newly available units that may not yet be listed online.
The real estate agent would likely have their own database of buyers and sellers, and could also leverage the databases of their network of fellow agents to help you find the right match.
4. The agent can explain and go through the paperwork for you
Successful real estate transactions require in-depth knowledge of specialized laws and regulations, and the associated paperwork is certainly not a breeze.
The real estate agent can walk you through all the clauses of the various documents involved in the real estate transaction, making sure you understand everything before signing. This is important because you will be legally bound by these documents once you put your name on them.
The agent should be able to answer your questions about the terms and conditions of the documents, but if you have more in-depth legal questions, you should seek the advice of a lawyer.
The agent can also help you verify if the transaction is legitimate, for example by confirming ownership of the property and verifying the details of the property, or verifying the buyer’s eligibility to purchase the property so that the sale does not fail.
Hire a qualified real estate agent
With around 30,000 real estate agents in Singapore, how do you choose the right one?
When looking for an agent, it’s important to make sure they are registered with the Council of Real Estate Agencies (CEA).
CEA is a statutory council that regulates the real estate agency industry in Singapore. They authorize and register real estate agencies and agents respectively.
It is important to note that only registered real estate agents are legally authorized to handle real estate transactions.
Aspiring real estate agents must meet certain criteria, including passing the real estate salesperson exam, and not have a history of fraud, dishonesty or breach of fiduciary duty.
You can check your agent’s identifiers by entering their name, registration number (it appears on their business card and estate agent’s card) or their mobile number in the CEA’s public register.
The public ledger also contains a list of each agent’s latest transactions so you can see how active agents are and which neighborhoods they know.
While an agent commission is an additional cost, it could be a reasonable expense to save you from having to educate yourself about all the procedures, legal requirements, and paperwork involved.
So yes, you are paying for their expertise and knowledge – but how much should you pay them?
You’ll be happy to know that an agent’s commission is in fact negotiable; there is no minimum or maximum percentage set by the CEA.
That said, you should discuss the commission rate with your agent. before all work begins. Factors that would influence the commission rate include the scope of work you require from the agent and the time frame within which you want the transaction to be completed.
Once the decision is made, make sure that the agreed commission rate, the scope of work as well as the conditions involved are all documented in the prescribed CEA real estate agency agreement. This is a contract that serves to protect your interests and those of the agent.
Your agent will also ask you to complete a specific client form. This is a mandatory form and one of the steps real estate agents should take to prevent money laundering and terrorist financing in Singapore.
Other important things to note:
- You can have an exclusive or non-exclusive relationship with your agent. This means that you can appoint one or more agents for the real estate transaction.
- Commission fees should be paid to the real estate agency and not to the agent. There might be GST on the commission, so it’s best to check with the agent and document this in the real estate agency contract.
- You should never give cash to the agent for payments related to the real estate transaction, such as down payment for HDB apartments, transfer fees, etc.
- You must be your agent’s only customer in the transaction. The agent cannot represent both the seller and the buyer to avoid conflicts of interest.
Ultimately, buying and selling a property can be a long and unfamiliar process. If you don’t know what to do or just don’t have the time, you might want to pay a real estate agent to handle the transaction for you.
For more advice on hiring real estate agents, you can visit the CEA website here.
This article was written in collaboration with the Council of Real Estate Agencies.
Featured Image Credit: Shutterstock
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