AS A harbinger of how technology is encroaching into the role of real estate agents, the latest survey by the Council for Estate Agencies (CEA) suggests that more people may eventually choose to complete property transactions on their own.
In the Public Perception Survey, three in every 10 consumers were undecided about whether to engage a property agent for future transactions. This was up from 25 per cent of consumers polled in 2012, the last time the survey was conducted.
Minister of State for National Development Koh Poh Koon noted that estate agents' work is going to be increasingly challenged as disruptive technologies compel them to add value for their customers or risk being cut off from the property transaction process.
"Many people today, especially those who are IT savvy, can gather enough information online and make property transactions on their own, hence cutting out the middlemen," he said. "Therefore, as property agents, it's time for them to level up their professionalism and also to take this chance to add value to their services in order to retain their position in the whole value chain."
Dr Koh was speaking to reporters on Wednesday after a visit to OrangeTee's office where he was briefed by the management on on-going efforts in the real estate agency industry to cope with changes.
CEA conducted its second Public Perception Survey over a four-month period from November 2015 to February 2016 where 2,113 consumers and potential consumers - meaning those who have not engaged the services of property agents before - were interviewed. The survey found that consumers between 21 and 39 years old were more undecided about engaging a property agent for future transactions than those in other age bands.
In such a climate, real estate agents with staying power will be those who offer better advice, better service and are consumer-centric, Dr Koh said.
"Web portals that give reviews from actual transactions may be a way for consumers to endorse the good services, professionalism and the value that agents can bring to the transaction process," he said, in reference to OrangeTee's "Property Agents Bank" search engine.
This new platform, launched in February, goes beyond the usual search features for property listings and past transactions to publishing customers' ratings and reviews of the agents' performance. All reviews consented by customers are shown on the corporate website without any filtering - which is unprecedented in the industry.
OrangeTee managing director Steven Tan conceded that some agents were initially circumspect about having reviews instantaneously published on the website without filtering, given that each review will stick with the agents for 12 months.
But the home-grown agency of about 2,400 salespersons decided to push ahead with the initiative in order to raise industry service standards and empower customers to make informed decisions, though at the risk of losing sales people who may choose to leave the company after receiving poor reviews.
As at April 26, 648 reviews have been received from customers, of which 511 reviews on rental transactions have an average 4.89 stars. The other 137 reviews from sales transactions have an average of 4.8 stars. Some 30-40 per cent of customers offered ratings.
Mr Tan said the firm plans to develop a separate website for "Property Agents Bank" and expand the OrangeTee brand into the region by leveraging this search engine.
Hailing the initiative, Dr Koh observed that such a platform presents a multiplier effect to traditional word-of-mouth referral, which is itself already a mechanism that allows agents offering good service to secure more deals. "At the end of the day, the agents' behaviour will be shaped by what consumers expect of them and they will want to see that the overall pool of agents retained in the system has a higher level of service and professionalism."
In CEA's survey, there was a minor drop in satisfaction level among respondents. Some 79 per cent indicated that they were satisfied with the services provided by their property agents - a slight decrease from 81 per cent in 2012 - with the decline in satisfaction mainly from consumers in resale transactions.
The survey found the level of consumer awareness of key industry practices and regulations to be similar to that in 2012. But consumers in resale transactions showed a higher level of awareness than those in rental transactions.
A total of 104 property agencies and 3,573 real estate agents left the industry in the last licence renewal exercise with CEA. The CEA had licensed 1,369 firms and registered 29,262 salespeople as at Jan 1, 2016.
This article was first published on May 5, 2016.
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