Public grading for property firms next year

Public grading for property firms next year

Property agencies will soon be publicly graded, just like hawker stalls and security guard firms. The Council for Estate Agencies (CEA), which regulates them, told property agency bosses on Monday that it intends to start releasing grades next year, based on the quality of their agents.

The grades will primarily be decided by the number of complaints lodged with the CEA from the public against an agency, as well as instances of disciplinary action taken against its agents.

The CEA also said at the briefing that it is unlikely to issue letter grades like "A" or "B", but rather bands such as "Excellent", "Fair", and "Poor".

In response to queries from The Straits Times, the CEA would only say that it encourages agencies to "constantly improve the services delivered by their salespersons and put in place effective processes to manage complaints when service lapses occur".

Details on new initiatives to raise professionalism will be shared when they are confirmed, it added.
When it is implemented, the proposed grading system will be the CEA's latest step to professionalise the industry since the agency was set up in 2010.

But the proposal is already encountering some resistance from real estate agencies.

Property agency bosses are worried that frivolous complaints and a simplistic methodology will result in worse grades than they deserve, they said.

Chief among agencies' concerns is that the criteria disregard the number of transactions each agency chalks up.

The CEA currently provides each agency with its own quarterly number of complaints per 100 agents. Last year, the agency that topped the charts had 5.7 complaints per 100 agents.

"It is simplistic to divide only by the number of agents," said ERA Realty key executive officer Eugene Lim, who stewards some 5,000 agents.

He pointed out that ERA agents, for example, carry out an average of 3,300 resale and rental transactions a month.

If 10 complaints are lodged, that works out to a 0.003 complaint rate; but its statistic per 100 agents would be a higher 0.2.

"It's not fair to a company that does a very high volume compared to the rest," said Mr Lim.

There are also smaller agencies which do not have more than 100 agents.

The Straits Times understands that the CEA intends to use a different set of criteria to grade such smaller agencies.

Bosses also claimed that the "majority" of complaints that streamed in from the public to the CEA have been frivolous.

Examples of frivolous complaints include cases where tenants have security deposits forfeited by a landlord.
There have also been instances of complaints against agents for not including their CEA registration numbers in advertisements, even though these ads were published before the CEA came into existence.

Despite these concerns, property agencies are resigned to the public grading system, and expressed hope that the CEA will work with them to iron out the kinks.

Source: The Straits Times – 3 August 2012