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MANY HDB flat buyers who bypass estate agents to make their purchases are still being fleeced for thousands of dollars in commissions - by the sellers' agents.

 

The Consumers Association of Singapore (Case) has received a growing number of complaints from home buyers who were unaware they are not required to pay the fees but who were misled into coughing them up.

 

Independent buyers complain that the sellers' agents inform them they have to pay the commissions just before the purchase documents are signed. This leaves the buyers with little time to find out their rights.

 

The buyers, in fact, can opt out of paying the fee - usually 1 per cent of a flat's price - if they say upfront that they will not be using the agent's service. This means the buyer will have to do the paperwork himself.

 

Case received 85 complaints about the payment of commissions last year, up from 60 the year before. In the first two months of this year, 11 such complaints were received.

The complaints are rising at a time when more buyers and sellers are choosing to deal without agents. According to the Housing Board, 3 per cent of last year's 31,000 resale housing applications - about 930 deals - were made via its online e-Resale system, which caters specifically to buyers and sellers dealing without agents.

The figure has gone up from 2.5 per cent in 2004 and 2 per cent the year before.

Property agencies say more buyers than sellers usually choose to go it alone.

The Institute of Estate Agents receives an average of 30 inquiries a month on the payment of commissions.

 

There is no law fixing the fees to be paid to agents for property purchases. Agents hired by HDB flat sellers tend to charge independent buyers a 1 per cent commission.

This fee is usually not levied on those buying private property independently. The managing director of C&H Realty, Mr Albert Lu, said this is because there are more restrictions on people buying HDB flats - on their age and marital status, for example - and therefore more paperwork to process.

 

The assistant vice-president of property agency ERA Singapore, Mr Eugene Lim, added: 'Ninety per cent of HDB flat buyers don't have the time, or don't know the procedures. The agent has to walk the buyer through the whole process.'

But buyers like Ms Jessica Tee, 32, beg to differ. The bank manager and her husband, who bought a four-room flat in Pasir Ris last year for $250,000, said they were misled by the seller's agent into paying the fee.

 

The agent asked them to sign an agreement stating that they would pay him the fee while sealing the deal for the flat.

 

Ms Tee said: 'It didn't feel very right. It was a bit strange, because he didn't represent us. But he said it was procedural.'

 

They gave him the benefit of the doubt and signed the form, only to find out later that it was optional. Ms Tee said she would have done the paperwork herself if she had known beforehand that a fee was payable.

 

Both Case and the property agencies approached - ERA, C&H and PropNex - stated that agents have the responsibility to make it clear to independent buyers upfront that they would be charging a fee.

 

But Mr Lu conceded it was unlikely many agents would voluntarily tell buyers they could opt out of paying. He advised buyers to broach the topic before agreeing to the deal.

 

Case executive director Seah Seng Choon stated: 'Home buyers should not pay a commission if they have not consented to using the service of the agent.'