I think I speak for all Singaporeans when I say that we’re sick and tired of reading about the latest property agent who just became a millionaire. We all know property agents who are driving BMWs and carrying Chanel handbags, so no need to rub it in already.
But Singaporeans are now getting smarter, and about a quarter of all HDB buyers and sellers since 2013 did not use a property agent, up from 11% in 2010. Why is this so? Here are five reasons more Singaporeans are buying and selling their homes without the help of agents.
There are now lots of online portals that let people advertise and browse property listings
In the past, the only way you could DIY a property sale was to publish a listing in the classifieds section of the local papers, and then go to your local NTUC Fairprice and stick an ad on the noticeboard, yes one of those with the little tear-off tabs on which you would write your phone number.
Nobody does that nowadays thanks to the many websites online that enable people to publicise their listings. In fact, agents usually use these very same portals to advertise their clients’ listings.
For instance, the STProperty site has pretty much replaced the Straits Times’ physical classifieds section, while there are other sites like iProperty and Snappyhouse which publish listings. People can also more easily reach out to strangers and their personal networks for referrals thanks to social media, as evidenced by the number of landlords turning to Facebook and forums like the Singapore Expats Forum to rent out their homes.
People are more informed about property transactions
Property agents used to be the only ones who knew how property transactions worked (well, except lawyers, and those are possibly the one group of people who’ll take your money even faster than the agents), the only ones who could efficiently find buyers for a home or research properties being sold, and the only ones who could make sure you weren’t getting ripped off.
Now, anybody with an Internet connection has access to the very same information, and that means people are now a lot more knowledgeable than before.
The HDB website maintains a wealth of information about how to buy or sell your property, as well as apply for the various grants.
They even have a section that lets you search for past resale flat transaction prices so you can do price research and not get ripped off. They also conduct resale seminars, which is basically a DIY guide.
Then there are the zillions of property websites and blogs, all giving their commentary of the property market and their tips on how to get the best prices and the best time to buy or sell. That means people are a lot less clueless than before, and are better able to DIY their transactions.
People don’t want to pay the high commission fees
Considering real estate agents earn 1% to 2% commission each time they sell a property, and considering property in Singapore costs, uh, a hellova lot, that adds up to a truckload of cash. Selling a $500,000 HDB flat with the help of an agent would mean you’d end up paying him $10,000 worth of commission—ouch!
While DIYing a property transaction without the help of an agent is without a doubt a laborious and time-consuming process, especially since nobody will be chauffeuring you to house viewings or meeting prospective buyers on your behalf, many people would rather do all that on their own then sacrifice thousands of bucks’ worth of agents’ commission.
Change in regulations
Part of the reason it seems like so many people are DIYing these days could just be a technicality.
In the past, agents could act for both buyer and seller at the same time. Both the buyer and seller would be officially recognised as having used an agent.
In 2010, the rules changed, and since then agents have only been allowed to represent one party in a transaction. That means if you as a buyer answer a property listing placed by an agent who’s acting for the seller, even if the agent chauffeurs you to the property viewing and acts as a go-between when negotiating the price, he is officially acting only for the seller and not you.
People are afraid agents won’t give unbiased recommendations on peripherals
Buying or selling property doesn’t just involve you and the other party. No, there’s a bunch of other people and organisations that will benefit from the transaction, and who’ll be waiting with open arms to take your money.
You’ll need to convince a bank to lend you money, hopefully at good rates, hire a lawyer to handle the transaction and, if you’re the buyer, perhaps engage contractors and/or an ID firm to make the flat look decent.
Unless you have your own lobang, the traditional way to find such services used to be to ask the agent. But many people don’t really trust agents to give unbiased recommendations anymore, preferring instead to do their own research.
Considering you can do your own research to find the best home loan interest rates right here on MoneySmart, you can feel pleased that there’s at least one recommendation you don’t need an agent for.
Have you ever handled a property transaction without an agents Share your experiences in the comments!