Archive | 12:10 pm

Yaw Shin Leong: Who is he representing?

27 Dec

The party that takes on the cause of the workers and stands against the hegemonic might of the MIW is somehow getting its priorities wrong; or at least one of its MP. Workers’ Party’s Yaw Shin Leong has put up on his blog a series of informal dialogues which he is leading with a group of about 30 real estate agents who are unhappy with the Council for Estate Agencies (CEA).

The CEA was established in Oct 2010 to regulate the real estate industry (especially rogue real estate agents) and protect the consumer from unfair business practices as property transactions are often very expensive and can be complicated. Before the CEA, there was no licensing of real estate agents and the industry had very low barriers of entry leading to many agents who are not only uncommitted to their trade but also devised various means to extract unfair commission and fees from unsuspecting consumers, property owners and even banks.

I bought my first house, a re-sale HDB directly from a seller and we did not engage any agents on both sides. It was pretty neat and clean as we decided on an agreeable price rather quickly although we have not met previously. HDB assisted in us completing the transaction and while it was complicated at first, it was not rocket science, you just needed some effort. Most of all, it saved buyer and seller a combined agent commission fees of $10K on a $350K apartment that is leasehold in the first place!

NOW Mr Yaw and his group of real estate agents is proposing that the CEA ban individual seller and buyer from any property transaction.

On Yaw’s blog: The Council should not permit sellers, buyers, landlord and tenants to transact any property deals themselves, as they are not trained; they do not attend classes; they do not sit the examinations such as Common Examination for Housing Agents(CEHA), Common Examination for Salespersons(CES) etc, and they are not registered with the Council. Therefore, the seller, buyers, landlord and tenants are not licenced to transact any deal with regards to property transactions. If a seller who is not licenced, sells his property to a buyer, essentially, the buyer is not protected, he is not being served by a licence agent.

IMHO, this is the most ridiculous of suggestions, it is anti-consumer and gives an unfair unending meal ticket to real estate agents. If seller and buyer are known to one another, relatives etc, they can just settle the deal at HDB or engage a conveyance lawyer in the case of a private property. Buyers, like me, who approached the seller directly can currently settle the transactions ourselves. If the seller is hard on cash, such a rule would force him to part with more cash and worsen his financial position. Why should a fee be paid to the property agent when he/she had made no introductory at all?? This also increases the cost of business as the property agent would get a cut of every rental property deals. Ultimately, such a suggestion is most damaging to consumer interest, dampens business environment, and basically creates a monopoly for very very small segment of interested persons.

Another ridiculous suggestion found in Mr Yaw’s blog states that real estate agent must be compensated half of the deposit forfeited by the seller if the deal is aborted. Currently, compensation to agents for aborted deals are non-obligatory.

On Yaw’s blog: As stated in Form 1-Estate Agency Agreement for the Sale of Residential Property and Form 3-Estate Agency Agreement for the Lease of Residential Property by a Landlord. Sellers and landlords are not obligated to pay commission to the real estate agents if the sale and the leasing of the property fall through. The real estate agents must be compensated half of the deposit that is forfeited by the sellers and the landlords when deals are aborted, as the real estate agents have successfully secured the deals, and cost spent in marketing the property.

The question of compensation should be a private arrangement open for negotiation between interested parties. If the agent did not perform his role adequately and cause the deal to fall through, why should he/she be compensated half the deposit?? The agent should stipulate in his contract with the seller that any marketing costs should be borne by the seller if the deal does not eventually succeed. Stipulating that real estate agents must be compensated half the deposit of any fallen through deal again grants them an unfair meal ticket.

Mr Yaw together with his group of real estate agents also proposed that the annual license fee for real estate agents imposed by the CEA be amended to a one-off payment.

On Yaw’s blog: The Council imposes an annual licence fee of $246.10 including GST should be amended to a one-off license fee, as agents are paying fees for courses, examination as well as the yearly Continuing Professional Development (CPD). The fees of these courses, examination and CPD amount to more than $500. Currently, if a new agent obtains the relevant certification, say in October 2011, upon registration with CEA, he has to fulfill the full amount of $246.10 for the entire year of 2011. Come January 2012, which is just 3 months after his registration on October 2011, the same agent has to fulfill another payment of $246.10 for the entire 2012. The new agent should only make a full payment of $246.10 as a one-off licence fee regardless the date of registration.

Next thing we know, Yaw would be joining pubs, karaoke and coffeeshops owners asking the government to make their entertainment and liquor licenses one-time payment also. This is part of their business costs and real estate agents should acknowledge it. Real estate agents should bear part of the costs of licensing, enforcement and administration of CEA as they are the ones that benefit from a well-regulated industry. If the CEA license fee is only one-time payment then the long-term buget of the CEA would be borne by taxpayers!!

Is Mr Yaw telling us that real estate agents who earned ten of thousands a year cannot afford a few hundred in licensing fees. If these real estate agents don’t earn a decent salary annually then perhaps they can consider changing jobs. The government can consider waiving the annual license fee if the economy is really bad and there is a drastic drop in volume of property transacted.

There are many other points worth countering in Mr Yaw’s suggestions but I won’t do them here (maybe he would be write to me if he is interested…haha). Is Mr Yaw still in the GE mode where he is opposing zheng hu for the sake of opposing?? Consumers now have more protection with the CEA established as it provides a platform for aggrieved consumers to lodge a complain, meditations to be carried out and rogue real estate agents turfed out. Workers’ Party and Mr Yaw should concentrate on fighting for everyday Singaporeans and the interest of normal consumers rather than the 30-odd real estate agents. And maybe one way of really helping the 30-odd real estate agents would be keeping the dialogue out of blogosphere and addressing it directly with the relevant interested parties together with perhaps the Institute of Estate Agents, a professional body of real estate agents. 30-odd agents out of the tens of thousands in Singapore is really a tiny tiny dot in the little red dot.