If you’ve ever needed to purchase, sell, rent, or lease a property in Singapore, chances are you’ve worked with at least one property agent. Often, this agent will be a family member or friend or will come highly recommended by a trustworthy source.
Alternatively, if you have never purchased or sold a house, your understanding of property agents is limited to what you have heard or encountered with people who work in this field. If this is your first time using a real estate agent, this article will serve as an excellent guide on some of the activities that your agent is not permitted to do.
Before we begin, it’s critical to understand that all property agents in Singapore must be registered with the Council for Estate Agencies (CEA), a statutory body under the Ministry of National Development (MND).
Your property agent’s name should be included on their estate agent cards, which must be worn when they meet with customers and displayed prominently on any ads they place. Additionally, it is illegal for anyone to conduct estate agent business without proper registration. You may do a fast search using the CEA’s Public Register.
#1 Your Real Estate Agent May Not Represent You in a Dual Capacity
At least two parties are involved in every property transaction. When purchasing real estate, there is a buyer and a seller; when renting, there is a tenant and a landlord.
Only 40% of respondents to our study were aware that it is illegal for property brokers to represent both sides. 3 in 10 respondents believed it was not necessarily an offence as long as the agent disclosed the connection, while 30% said it was acceptable for an agent to represent both parties or confessed ignorance.
Bear in mind that your selected property agent cannot operate on your behalf and on behalf of the opposing party in the transaction.
Your chosen agent may represent you exclusively in connection with a real estate transaction. This implies he cannot collect a commission from both you and the other party in the same transaction, since this is illegal. Additionally, this is referred to as dual representation.
Similarly, if you are a buyer who has conducted your own property search and located the home you intend to purchase, the seller’s agent cannot seek compensation from you, since the agent is already representing the seller.
# 2 Agents Are Not Authorized to Handle Certain Funds on Your Behalf
Half of our respondents incorrectly believed that their agents may handle transaction funds on their behalf as long as both parties agreed in advance, or stated that they were unsure if this was permitted.
While you may trust your property agent to manage any transactional concerns with the property, your property agent is not permitted to handle some transactional funds.
For instance, when making a down payment on a home, you should make the needed payment directly to the property’s legitimate owner, rather than relying on your property agent to do so. Similarly, if you are selling a house, your agent should not take any commission.
The following table summarizes the types of funds that your agent can manage on your behalf. Other sorts of funds are illegitimate for your agency to handle.