For me, buying a property will always be a huge milestone. However, you have to understand buying a property that fits your criteria is not the end of the road. It is merely the beginning of our journey in getting started with your real estate investment. In order to achieve success, it will always boil down to how fast you can get the property rented/sold, at a reasonable price, and most times, it comes with the help of a good property agent.
With many people losing their jobs over the pandemic period, it is unsurprising to hear an increasing number of dubious stories related to the sales-and-service industry, in particular, property agents. In my opinion, this is generally undeserved, hyped and oftentimes caused by a few bad apples.
Hence, it is crucial for us as property investors to know what to ask and observe when we interview and decide on the property agent that will manage and facilitate the transactions of our property.
As a general rule, it is ideal to work with a property agent that is familiar with the area and has good interpersonal skills. On top of that, always do run some due diligence on their credentials, experience and seek review on their past transactions.
1. Check your property agent’s credentials
The truth of the matter is, you can get anyone to manage a property transaction for you as long as the terms are agreed by both parties. If you are getting the help of a close friend, you perhaps do not need any credentials since you know their capacity and you trust them to manage the transactions.
However, when it comes to choosing a property agent whom you have never worked with, it is always good to run a quick check on their credentials. All individuals who introduce themselves as property agents are required to register with the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP). They can either be a Real Estate Agent (REA), Probationary Real Estate Agent (PEA), and Real Estate Negotiator (REN).
As a homeowner, you can always verify a property agent’s credentials on the official BOVAEP website.
Choosing a registered property agent is important because the property agent will represent you and manage transactional funds on your behalf. With registered agents, funds are deposited in a client’s account and protected by indemnity insurance. If the property agent is found to commit any offences, BOVAEP can easily suspend or fine the responsible agent.
On the flip side, you are putting yourself at risk of being cheated if you engage the services of an unlicensed property agent. In such cases, no regulatory body can protect you and the court cases can be an unnecessary hassle.
2. Check their area of specialisation and experience in the market
Like all businesses in the market, property agents have their own area of specialisation. By working with an agent that highly specialises in your residential compound, you stand a better chance of sealing the deal with potential buyers.
Typically, an agent who specialises in a specific area will be well informed of the local jurisdiction, upcoming development and market sentiment. Having this information, they will have better confidence in advising potential buyers and is well equipped to manage objections.
Information on upcoming developments such as the new MRT route, shopping mall and amenities can be useful in persuading a client to give your property serious consideration. Other than that, you will want a property agent to be able to answer any concerns clients may have about good schools, parks, and even information such as the peak traffic period.
Hence, as a homeowner, it is always good to filter out good property agents specialised in your residential compound. An expert should be able to advise you on the best rental/selling price within your compound, which can be a make or break in your real estate business.
3. Get verification and reviews on their past transactions
Good property agents never show up out of nowhere. It takes time to build a track record that attracts quality inventory and market trust. If a property agent is well versed and trusted within your compound, chances are your neighbours and other homeowners can give you their review and referral on the property agent.
To give you a headstart on this matter, there are a few ways to verify and get reviews on your property agent
- Check how many listings your property agent has on listing portals such as iproperty.com and propertyguru.com.
- Walk around your home compound and try to see if you can find listing banners by your property agent.
- Talk to the local residential community and ask for reviews on your property agent. If your property agent is exceptional, chances are he is already on their recommendation list.
4. Choose a personable property agent you can trust
Have a cup of tea with your property agent. It is a good time to know them better, be it on their experience, specialisation, personality and attitude.
When it comes to engaging a property agent, I strongly believe in having an agent who works for you and with you. Along the sales/rental process, you as the homeowner will spend a lot of time with the agent and you will need to be able to work with them to resolve any issue that may arise.
In such situations, you will want to be discussing with an agent whom you can communicate and rely on for good advice. Someone who is personable, real, reliable and communicable is essential in these times.
To put it simply, you will want someone whom you can work with to get the deal across. To put into perspective, the agent should ideally have the below characteristics,
- Someone who has your best interests at heart
- Someone you can relate to and trust for advise
- Someone who is reliable to market your home for rent/sales
- Someone you can communicate with comfortably to get an idea across
5. Choose a property agent with a solid plan to market your home
Whether you are renting or selling your home, your property agent should have a solid marketing strategy and they should be able to communicate what makes their work different from other agents in the area.
On the other hand, having a solid plan is also crucial for you as the homeowner to keep track of their progress. If an action is scheduled in the plan but never executed, perhaps it is time to reevaluate the effectiveness of the property agent.
Below are some key actions I will always pry more from the property agent,
- How will you, as the proerty agent, market my home?
- When can I expect to see my home listed on the agreed platforms?
- How will you, as the property agent, manage home viewings?
- When will be a good time for us (homeowner and property agent) to reevaluate our approach?
From experience, having a checklist of actions to follow up on is always useful. This adds a tiny bit of pressure to keep property agents motivated and it gives a good reason and timeframe to check in with your agents.
6. Communicate the marketing costs and commissions earlier on
As with any service sales out there, there will be costs and commissions when it comes to engaging a property agent’s expertise and time. Hence, it is always better to communicate and outline clearly the responsibility of both parties, the homeowner and the property agent.
Below are the typical renting costs and commissions to be communicated earlier on in the engagement,
| Typical Rates and Responsibility | |
|---|---|
| Rental Commission | Typically, a 1-month rental as the property agents’ commission |
| Tenancy Agreement | Can be a goodwill service by the property agent. If a lawyer is engaged to prepare the agreement, the cost will be on the homeowner. |
| Tenancy Agreement Stamp Duty | To be bear by the tenant. |
| Marketing & Advertising Cost | Not limited to online listing, banners and flyers. Property agents will typically absorb such marketing costs if as per the standard action plan. However, if the homeowner wishes to push for a more aggressive marketing approach, the cost may fall on the owner |
Below are the typical selling costs and commissions to be communicated,
| Typical Rates and Responsibility | |
|---|---|
| Sales Commission | A maximum allowable 3% as per BOVAEP guideline |
| Sales and Purchase Agreement/ Relevant Documents | A lawyer will be engaged; The responsibility and cost are typically bear the seller and can be negotiated. |
| Marketing & Advertising Cost | Not limited to online listing, banners and flyers. Property agents will typically absorb such marketing costs if it is as per the standard action plan. However, if the homeowner wishes to push for a more aggressive marketing plan, the cost may fall on the owner |
Final Word
When it comes to selling or renting out a property, it is always possible to market your home without the assistance of a property agent. However, having the right property agent to help you through the hassle can be a worthwhile business expenditure, especially when time is a precious resource in our lives.
Until then, take care.
