Could more homeowners bypass using agents to sell their properties?

[SINGAPORE] Over recent years, private home and Housing & Development Board (HDB) resale flat prices have risen strongly.

Doubtless, higher housing prices islandwide cheers many residents who are homeowners.

Steeper home prices can also benefit property agents as higher prices may translate into fatter sales commission per transaction.

A sale of an HDB resale flat for S$1.5 million or a resale private home for S$2.5 million may generate a sales commission of S$30,000 or S$50,000 respectively, assuming commission rate is 2 per cent of the transaction price.

As sellers are not mandated to use an agent, might some property owners seek savings by marketing a home without using an agent?

In a letter to The Straits Times published in early September, HDB said over 12,500 verified listings have been published on its resale flat listing (RFL) service since its launch in May 2024. 

According to HDB, more than 60 per cent of the flats listed completed their resale transaction, and close to 40 per cent of these completed transactions were by sellers who listed their flats without a property agent.

The RFL service on the HDB flat portal is a one-stop platform for the listing and transaction of HDB resale flats. Sellers can list and market their flats independently or through an appointed property agent. 

The RFL service was launched to help create a transparent, reliable and trusted marketplace for HDB resale flats for sellers, buyers and property agents. 

Sellers must have a valid intent to sell before they can list their flat, and each seller can only post one flat listing to ensure that there is no duplicative listing for the same flat.  

Prospective buyers must have a valid HDB flat eligibility letter before they can obtain the sellers’ contact details and/or schedule viewing appointments through the HDB flat portal.  

Bypassing agents

Going forward, might more owners market HDB resale flats and private resale homes independently without using an agent?

The resident population is increasingly well-educated. If reliable housing market data as well as resources relating to the mechanics of a property transaction are easily accessible, owners may have the confidence to market a resale property independently, without using an agent.

Bypassing the use of agents could lead to meaningful cost savings on agents’ sales commission as well as better control over the exchange of information and negotiations with interested parties.

Indeed, if more homes get transacted without involving an agent, more owners may pluck up the confidence to market their units independently.

In turn, removing frictional costs of agents’ sales commissions in resale housing transactions can arguably improve market efficiency and support housing mobility. 

The RFL service helps HDB flat owners market their units for sale independently as buyers and sellers have the assurance of relying on a reliable and transparent service.

When a listing is created on the RFL service, recent transacted prices of nearby flats are shown to help sellers make informed decisions on their listing price. Step-by-step guides and videos are also available to guide buyers and sellers. 

In future, could all resale flat sellers be required to list their units on HDB’s RFL service?  

Potential for a new URA platform

Perhaps, the Urban Redevelopment Authority (URA) could follow HDB’s lead and launch a platform for listing private homes in the resale market.  

Such a service can help improve transparency and reliability in the private housing resale market. And should such a service exist, more private home sellers may look to market their units without using an agent.

For the first nine months, there were 10,839 transactions of private resale homes islandwide, accounting for nearly two-thirds of the private homes sold in Singapore, according to URA’s data. 

The number of property agents in the Republic has generally been growing in recent years. At the start of this year, there were 36,816 property agents according to the Council for Estate Agencies.

Flexible working hours coupled with potentially rich rewards for top performers help attract people to become agents.

However, property agents are facing stricter rules to raise professional standards. For one, agents must complete at least three property transactions over three years, or pass a refresher examination to be eligible for registration renewal from 2027.

While the livelihoods of agents matters, supporting owners in selling their homes independently can benefit many Singaporeans and improve market efficiency. 

Fewer but more productive agents

Even if more housing transactions get executed without involving an agent, all is not lost for property agents.

For one, leading property agency PropNex has a diversified revenue stream, with the housing resale segments contributing less than half of revenue in the first six months.

Looking ahead, developers will likely continue using agents in new condo launches, especially agencies with large sales forces, as notching up strong sales at launch can help generate good financial returns and sales momentum for projects. Moreover, sales commission rates for new condo projects may be higher than for resale homes.

Importantly too, many resale home vendors may continue engaging the services of agents.

Some vendors may not feel sufficiently confident to market their home on their own and fear screwing up a big ticket sale. Other vendors, who are pressed for time, may opt for the convenience of using an agent to help market their property.

Also, owners of homes which may be harder to sell, might need to tap the creativity of agents. 

The onus lies with agents to convince vendors that they bring value-add when handling a property sale, thereby justifying their sales commission. Think of agents who leverage their deep network and experience to achieve better prices and close deals faster.

Major property agencies are investing heavily in artificial intelligence and other technologies to help upgrade the knowledge and productivity of agents.

Still, as more housing resale transactions potentially get executed without using an agent and rules tighten to raise professional standards of agents, the property agent population could decline.

Ultimately, having fewer but more productive agents can be positive given Singapore’s tight labour market and a maturing economy that is striving to raise productivity.