Even when a client backs out from an exclusive agreement to sell a property, some real estate agents are still requesting to get paid for their services.
For instance, a prospective seller could engage an agent to do detailed valuations of a home and then arrange for viewings. But the owner may change his mind or refuse to sell the property to a buyer who is willing to pay more than the asking price.
The Council for Estate Agencies (CEA), the authority regulating the real estate agency industry, said it is not illegal for agents to ask for exit compensation, provided that sellers are agreeable.
“Since the property market started booming last year, every month, at least two to three sellers have backed out on me because they only wanted to test the market and didn’t want to sell,” said property agent Eric Ng.
Since last June, Ng has adopted exit clauses, which require customers to pay for expenses incurred in marketing their properties.
At least 10 other agents are doing the same, aside from getting the seller to sign estate agency agreement forms with the CEA. The forms indicate that an agent will get exclusive rights to market the home and receive the agreed commission.
The exit clauses state that a seller backing out for no valid reason is obliged to pay consultation fees of between S$150 to S$250, as well as reimburse the amount spent on valuation reports and advertising. Overall, this works out to an average of S$500.
“I started putting in this clause about four months ago to deter home owners who are not serious. We have to let them know that, for us, there is also an opportunity cost for the hours we put in selling their homes,” said real estate agent Dayangku Rozarita.
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