SINGAPORE — On the surface, it may seem great to have a trusted close friend as your property agent. After all, the property market can be a difficult place to navigate, especially if you have no insights into price movements and market rates.
However, mixing business with friendship caused Anne Lee (not her real name) a valued close relationship. The analyst in her late 20s had engaged a friend to help sell her parent's Executive Condominium (EC) in northern Singapore.
When Lee's parents first considered selling their home after its Housing Development Board (HDB) Minimum Occupation Period (MOP) lapsed some two years ago, she suggested enlisting the help of her "really close friend" who was a property agent. The family was not familiar with the property market and needed someone they could trust to find buyers. However, several red flags arose throughout the process.
Property listing was 'underpriced'
"When we first engaged my friend, we didn't know how much was ideal to price our property. We trusted his advice," Lee told Yahoo Finance Singapore.
"We thought that he was the expert, that he understood the market and had what it took to help us negotiate a better deal. So, we went with his recommendation of pricing the unit at around 14 per cent more than the purchase price," said Lee, adding that her parents had bought the property for over S$1 million.
Shortly after listing the unit, however, Lee suspected that something was amiss with the pricing when she spoke to several friends who were familiar with property valuation. They told her that the property was worth much more. She then decided to do her own research and found that the market valuation for her parents' unit was at least 36 per cent more than the purchase price.
Lee then went to her agent friend and asked for an adjustment to a price that was higher. He promised to recheck his own estimated valuation. He eventually came back with a buyer's offer for the minimum amount that Lee's family wanted.
"I'm not sure how the market value moves, it might differ from month to month, but I just feel that it was his responsibility to inform us if our property could fetch a much higher value. That, to me, is working in the best interest of your client," said Lee, who thought that her friend could have tried harder to get a better price for her family.
Lashed out at friend's parents
There were already warning signs before this, according to Lee. When he was first engaged, Lee's friend asked her parents to sign an agreement that barred them from engaging other agents to sell their property.
According to Lee, her parents were indifferent about whether the property ended up being sold or not, as there was no urgency to move out. Lee's parents were upfront with the agent that if the property was not sold in the three months, they would consider renovating the unit instead.
When the three-month agreement lapsed, the agent had yet to find a buyer. Lee's parents decided that they no longer wanted to sell their property. Lee's mother then made a call to the agent to inform him of their decision but was taken aback by his "nasty" attitude.
"He actually scolded my mother over the phone, saying that we couldn't back out, and that he had spent a lot of money on marketing materials. My mum was on speakerphone at the time, so I heard the exchange. I took over the phone over and told him off for being disrespectful to her," Lee recalled.
The situation soon diffused, and Lee's friend apologised for his behaviour. Despite the incident, the family later agreed to proceed with trying to sell the property through the same agent. "I decided to 'let it go' and continued with the deal," said Lee. About two months later, the property was sold.
Further tension between agent and sellers
After the deal was closed, Lee and her family began the process of looking for a new home. Scarred by their experience with the agent, they decided that they were going to look for a new home by themselves through online portals without engaging any agents. The process was slow, and to make matters worse, it was difficult to do house viewings given the restrictions that were in place during the COVID-19 pandemic.
"We did ask my agent friend some very basic questions, like the documents required for the buying process, but he said that if we wanted his advice, then we would need to engage him as a buying agent," said Lee. This created another point of tension within the once-close relationship.
Please also reconsider if you are engaging a friend as an agent... if things go wrong, there goes your friendship as well.Anne Lee (not her real name)
The family eventually found a suitable HDB flat, which they intended to renovate before moving in. Coupled with financing timelines, the family sought their agent's help in asking for an extension from their EC buyer. Again, Lee shared, the agent was not helpful in negotiating for more time from the new owners.
"We asked to push the handover date further, but he kept emphasising that the buyer had to move in as soon as possible," said Lee. Although they eventually got a three-week extension, Lee felt that her friend was not acting in their interest, considering that he had already earned his commission. In the end, the family had to clear out regardless and were left having to rent an apartment for several months.
"The friendship will never be the same again," said Lee of the whole experience, adding that her friend has since blocked her from his social media accounts.
Lee has vowed not to engage friends as agents in the future.
"It was partly my fault for not doing more research or speaking with more property agents," Lee said. "It's very important for home sellers or buyers to do their own research and speak to multiple experts."
"Please also reconsider if you are engaging a friend as an agent... if things go wrong, there goes your friendship as well," Lee added.
If you have an interesting True Singapore HDB story to share, email us at firstname.lastname@example.org