Buying your HDB property: Brutal truth on saving the 1% agent fees, but at what intangible costs?

​I know, most people will prefer to save that 1% agency fees when buying their HDB unit. I’m sure you are in the same boat as well. One can easily go on property listing sites like Property Guru and 99.co and easily shortlist units and view them without any help from agents, make an offer, and handle the transaction themselves.

A true case story, of my clients. Let's call them Sally and Joseph.

Case study - One of my client's story

​Let me share with you more on my previous client’s case. Let’s call them Sally and Joseph. Sally is a direct buyer. She goes onto PropertyGuru and shortlisted ideal units for her and her fiancé, Joseph, to view. After shortlisting units, they decided to go ahead and view the units, and decided to shortlist some. Sally checks the recent transactions around the area on HDB’s website and decided to put in a comfortable offer based on that information.

​However, only to realise that they have been out bided by other buying parties, and this has been going on for a few units that they like. What’s going on here? 

About me

Hi, my name is Howgene, a real estate consultant with Propnex Realty. I've been in the real estate industry with a purpose of coaching consumers and clients on blind spots in the marketing and deep diving into crucial details in a property purchase. Today, I’m happy to share with you more on why saving that 1% buying agent fees might do more harm than good and can even cost you time, your dream unit, or up to even 30-50k of potential savings.
 
I’ve also heard comments from direct buyers, stating that agents only go on PropertyGuru to look for units for them, and send them links to arrange for viewings, even they themselves can do it. However, I think a buying agent’s job is more than just that and let me share why.
 
To understand the value of an agent in your home-buying process, we must understand that most important factor that facilitates the entire buying transaction, the sellers’ agents.

In summary, the sellers’ agents will prefer to deal with buyers represented professionally by agents.

The sellers' agent is the most important in the facilitation of the transaction.

Sellers' agent, the main facilitator of the transaction

​Truth to be told, agents often prefers to work with buyers who are also represented professionally by agents. Think about it, there is another professional party (buyer agent) in charge of managing the buyers, from shortlisting their units, to ensuring their affordability, to paperwork management and more. Would this make the sellers’ agent job easier?
 
This preference also stems from the streamlined communication and paperwork involved, if both seller and buyers have professional representatives. As agents have transacted countless properties throughout their career, they are well-versed with all the ins and outs of HDB transactions and will be more efficient throughout the deal.
 
When both parties have agents, it reduces the workload for sellers’ agents, who can focus on qualifying offers without having to manage the buyer's side of the transaction. This efficiency can lead to faster negotiations and smoother transactions, which is why most agents will prefer to work with ready buyers who are represented well by agents. Next, let’s deep dive into some specific factors on why buyers who are represented by agents are more successful with their home-buying journey.

Negotiation is extremely crucial in the securing of a deal.

Lack of negotiation skills / knowledge
Firstly, another intangible downside is the lack of negotiation skills as a direct buyer. This will cause sellers’ agents to be more firm on the terms with less room for negotiation with direct buyers as they are aware that direct buyers may lack the experience and knowledge necessary to navigate the complexities of property transactions. This perception can lead seller agents to be more stringent with pricing, knowing that a direct buyer may not fully understand market value or negotiation strategies.
 
Increased Risk
Secondly, another intangible downside is increased risks. Without an agent, a buyer may inadvertently make mistakes during negotiations or fail to present a compelling offer for a unit. Seller agents, aware of this potential pitfall, may feel less motivated to entertain lower offers from unrepresented buyers, as they perceive a higher risk of complications arising from inexperienced negotiations, which might jeopardise the deal.
 
Focus on Efficiency 
Thirdly, seller agents are often under pressure to close deals quickly and efficiently. When dealing with represented buyers, they can streamline communication and paperwork, reducing their workload. In contrast, negotiating with direct buyers may require additional effort to explain processes and clarify terms, leading seller agents to prioritize offers from those who come with professional representation.
 
Overall
As a result of these dynamics, direct buyers may find themselves at a disadvantage when it comes to pricing negotiations. Without the backing of an experienced professional on their side, they may be met with resistance from seller agents who are less willing to budge on price or the deal terms, or might even use their lack of knowledge and expertise to their advantage to secure better terms for their sellers.

This strict approach by sellers’ agents on direct buyers can lead to missed opportunities and higher costs for buyers who lack the expertise to navigate their home-buying journey effectively for themselves.

On the flipside, if a buyer is represented by a professional, they are viewed as credible representatives who understand market dynamics and can present offers in a way that resonates with seller agents. This credibility fosters a more collaborative negotiation environment, increasing the likelihood of securing favorable terms and prices, which overall increases the chance of closing the deal for your ideal HDB unit, saving time and money in the long run.

In Summary

​Ultimately, for buyers looking to navigate the competitive HDB market successfully, engaging an agent is not just about convenience; it's also about leveling the playing field in negotiations and ensuring that they have the best chance of attaining their unit of choice, at a small expense of just 1% of their property cost. ​

Many buyers find that the benefits—such as better negotiation outcomes, higher chances of securing a unit at a good price and terms, and the reduced time spent on home-searching significantly outweighs this cost.

Buying property in Singapore can be complex, with regulations and processes that can be overwhelming. I'd love to meet you and provide a clear breakdown of what you need to know to ensure a smooth and successful purchase.

Let me know when you're available for a quick chat or meeting —'ll be happy to walk you through everything, a step at a time.
 
 
Best regards,
Howgene Leong
+65 9367 1301 
R068579F
Propnex Realty Pte Ltd

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​Still not convinced? Here are some other important value-add that engaging a professional for your buying journey can provide.
 
Expertise and Guidance
Real estate consultants possess in-depth knowledge of the real estate market, including current trends, pricing, and availability of properties. They can help buyers navigate the complexities of the market effectively.
 
Legal and Procedural Assistance
The property buying process involves numerous legalities and paperwork. An experienced agent can manage these aspects, ensuring that all documentation is correctly handled and submitted on time, from complex timeline planning to ensuring that buyers will not be left without a home due to poor timeline management, especially if buyers are transiting between places with both a buying and selling timeline.
 
Negotiation Skills
Agents act as skilled negotiators, helping to secure better prices and favorable terms for buyers. They can provide data-driven insights to support negotiations, which can be particularly beneficial in a competitive market. We also have resources that help us offer for units with minimal to no COV (Cash Over Valuation). Agents have transacted and worked on a lot more property deals throughout their career, hence they are familiar with industry practices and negotiation skillsets to help achieve favourable prices and terms for their buyers. 
 
A form of Emotional Buffer
Buying a home can be an emotional experience. An agent helps to keep emotions in check during negotiations, allowing for more rational decision-making in the buyers.
 
Access to Resources / Networks
Agents typically have extensive networks that include mortgage brokers, contractors, and other service providers which might be beneficial to streamline the home-buying process.
Exclusive Listings: Many agents have access to listings that may not be available to the general public, including off-market properties. This can expand a buyer's options significantly.
 
Time-Saving and Efficiency
The process of searching for a property, arranging viewings, and managing offers can be time-consuming. An agent takes on these tasks, allowing buyers to focus on other priorities.
 
Handling Complications: 
Should any issues arise during the buying process, such as financing delays or disputes with sellers, an agent is equipped to handle these challenges efficiently, minimizing stress for their buyers.

Blog post written by Howgene Leong