HOUSING agents should not take commissions from both the buyer and seller of an HDB flat, the Consumers Association of Singapore (Case) said yesterday.
The reason: There is a potential conflict of interest.
If an agent appointed by a seller also expects a commission from a buyer, it would not be clear whose interests he is best representing.
Currently, the common - but controversial - practice is for an agent to collect 2 per cent of the HDB flat sale price from the seller and 1 per cent from the buyer.
For private home sales, however, buyers who are not represented by agents are usually not asked to pay the 1 per cent fee.
This is mainly because private home prices are much higher, translating into higher commissions.
This practice appears to be supported by the Institute of Estate Agents (IEA).
For private home sales, its guidelines say that buyers should pay a 1 per cent 'finder's fee' if they have appointed the agent.
But the similar guideline for HDB flat deals simply states that the buyer should pay a 1 per cent service fee - without stipulating whether the agent is appointed by him or not.
The IEA also says that agents should not collect commissions from both the buyer and seller without their prior knowledge.
Although there is no law on the commission payable, Case yesterday took issue with the different standards.
It told The Straits Times: 'The IEA allows its member agents dealing with HDB transactions to collect commissions from both buyers and sellers, citing it as a 'market practice'.
'We feel strongly that buyers and sellers of HDB flats deserve the same protection as those contracting in private property.'
But the IEA yesterday defended the need for different commission structures.
Its second vice-president Low Swee Kim said that, due to lower prices of HDB flats, it would not be viable for sellers' agents to waive the fee they charge buyers.
Also, he said that agents dealing in HDB flats have to do more work because they do not have the help of lawyers, who are usually hired for private home sales.
He added, however, that agents should make known upfront the fee that they charge.
But some flat buyers have complained that this does not happen.
They say they are told about the 1 per cent fee just before they sign the purchase documents, putting them under pressure to pay.
One of them is Ms Tati Hussain, who bought a four-room flat in Chua Chu Kang earlier this year.
The 34-year-old sales support coordinator did her own research on resale procedures of HDB flats and went house-hunting late last year without the help of an agent.
In January, just as she was concluding the purchase of her flat, the seller's agent asked her to pay a 1 per cent fee, saying that it was 'a regulation'.
She said: 'I was shocked. He had never mentioned the commission earlier.'
Ms Tati refused to pay, but the deal was completed anyway.
The debate over the double commissions comes at a time when more buyers and sellers are choosing to shun agents.
According to the HDB, 3 per cent of last year's 31,000 resale housing applications were made via its online e-Resale system, which is designed for people who do not want to employ agents.
The figure has crept up from 2.5 per cent in 2004 and 2 per cent the year before.
tanhy@sph.com.sg
