Four years ago when Kavin Kuah completed his national service (NS), he decided to forego his tertiary education even though he had secured a place at one of the local universities. “I would have had to take a separate loan if I went to university because my family couldn’t afford the fees,” he says. “So I decided to come out to work instead.”
Kuah figured he had only two options if he wanted to strike it rich, and quick: become a property agent or an insurance agent. As he had little interest in insurance, he decided on the former. Even then, he had to borrow the money needed to pay for the Real Estate Salesperson course. “I had just come out of NS, and I didn’t have the money,” he says.
With no contacts, no referrals and no money to print flyers or for advertisements, Kuah had no choice but to hit the pavement and knock on doors. On weekdays, he would read the news and familiarise himself with the rules and regulations on the HDB, Inland Revenue Authority and URA websites, and called their hotlines with queries. He would also phone and meet up with agents with listings in areas he intended to focus on, to find out the latest transaction and asking prices. In the evenings, he would make cold calls from seven to 10. On weekends, he would start earlier, from 10am to 10pm.
What was hardest for Kuah was seeing people his age dressed up for a night out during the weekends while he had to work. His friends would ask him to join them for drinks or go clubbing, but he had to turn them down. After a while, they stopped calling. “That was the price I had to pay in the beginning,” he recalls.
His misery was compounded on rainy, windy days, when he got drenched walking along the corridors of HDB blocks as he went from door to door. What kept him going during those moments was the reason he was doing it: “I wanted to provide for my family and have a better life.”
Last year, 104 estate agencies closed shop and 3,573 sales agents dropped out of the industry,
according to Council for Estate Agents.
‘Real-time information provider’
Armed with all the information about units for sale and their asking prices, as well as the latest transacted prices in the blocks where he was canvassing for deals, Kuah became a “real-time information provider”, he says. His hard work paid off. Within two months, he earned $20,000 to $30,000 in commissions. He then set $80,000 as his benchmark as that was the minimum required to be ranked among the top 20 agents at ERA. “I wanted to go on stage to be recognised,” he says.
Kuah hit his goal within his fourth month as a property agent. “And once I attained that, I wanted to continue capturing that feeling. That was what kept me motivated.” When he made his first $200,000 in commissions, he paid off his parents’ mortgage. And by December 2012, just 12 months after starting out as a property agent, he bought his first luxury toy, a brand new BMW 320. But to him, that is also a necessity in his line of work.
Four years on, the 28-year-old sports slickedback hair, a jacket festooned with lapel pins — one for each of the four years he was ranked among ERA Realty’s top agents. He is now a poster child for the self-made successful property agent.
According to ERA in a press release on March 16, Kuah’s gross monthly income last year was $119,873.27, or 10 times the median gross monthly commission of $11,686.49 earned by the top 300 real estate agents in the realty firm. His success is all the more astounding as it was achieved against the backdrop of falling real estate transactions, which plunged after the January 2013 hike in additional buyer’s stamp duty (ABSD), and the imposition of the total debt servicing ratio (TDSR) loan framework in June that same year.
‘A numbers game’
Last year, 104 estate agencies closed shop and 3,573 sales agents dropped out of the industry, according to the Council for Estate Agents (CEA). Anecdotal evidence is that many property agents have become GrabTaxi or Uber drivers.
“It’s the part-timers and the less motivated [ones] who drop out,” says Jack Chua, CEO of ERA. “A good property agent may even do better in a tough market, as it’s during such times that sellers appreciate their tenacity, market expertise and experience. Generally, the top 300 agents will take home more than $100,000 a year — in good times and in bad.”
Nowadays, most of Kuah’s clients are referrals, unlike when he first started out. However, he still makes cold calls. “Last week, I had an appointment with a client in Sengkang that ended at 7.30pm. My next appointment was at 9.30pm. So I used that two-hour window as an opportunity to knock on doors in Sengkang.”
In his first year, most of his transactions were of HDB flats. Today, half of them is private housing. The biggest single transaction Kuah has brokered to date was the sale of a bungalow in Siglap for $5 million. “That came from a referral,” he says. “I had sold an HDB flat for the son, who then recommended me to his mother when she wanted to sell her bungalow.”
To maintain his level of commissions, Kuah has to close 10 transactions a month. That translates into one transaction every three days. In the current market, where the sales conversion rate is 25% to 30%, he needs to market 25 to 30 units monthly to close 10 deals. “In the past, you needed just 20 units to close 10 [deals] in a month. It’s a numbers game,” he says.
Nowadays, Kuah has a team of of 10 agents. His twin brother — who is “two minutes older” — has joined him in the business. “I tell my clients, you appoint one agent, but you get two,” he says.
Even though he had put his mobile phone on silent mode, it beeped incessantly. At the end of the 40-minute interview with The Edge Singapore, he had 32 messages and nine missed calls.
These days, Kuah takes time off to meet up with his friends for drinks. “But I make sure I control my alcohol intake because I still need to work the next morning,” he says.
Kuah: In the past, you needed just 20 units to close 10 [deals] in a month. Now, you need to be marketing 30 units to [do that].
New launches, upgraders
Jemerson Toh was PropNex Realty’s top agent in February. He earned more than $150,000 in commissions last month, largely owing to the sale of a JTC factory, where he represented the seller.
However, it was a one-off transaction, as Toh focuses on marketing residential units at new launches. He joined PropNex in 2010 as a part-time agent as he was helping his parents in the family’s carton box manufacturing business. It was only in 2012 that he became a fulltime property agent, and has consistently been ranked among the top since then.
Toh had to start from scratch, making cold calls, and knocking on doors daily, much like Kuah and every new property agent. He remembers his first coup in 2012, at the launch of the 618-unit Parc Centros condominium in Punggol Central, where he closed eight units in a single day. Last year, at the launch of the 546-unit Lake Life executive condo, he sold 13 units in one day.
However, towards the end of last year, he decided to spend more time with his wife, who gave birth to their first child in October, and lost her mother shortly after.
This year, Toh is back in action and says he “will go all out”. He doesn’t see the market slowdown denting his commission earnings as developers have increased the commission rate for agents to incentivise them to push sales.
According to PropNex CEO Mohamad Ismail Gafoor, 2016 will be the year that property owners will be looking to restructure their portfolios. This has benefited agents such as Andy Cheng, PropNex’s top producer for the landed property segment for the month of February. He sold more than $10 million worth of homes, ranging from a corner terraced house for $2.7 million to a semi-detached house for $3.4 million. Most of the buyers of landed homes were Singaporeans upgrading from private condos and even HDBs, Cheng says.
“This is the right time for Singaporeans to upgrade as the TDSR and ABSD have depressed prices,” says Ismail. “There’s a huge market out there — of people wanting to sell their existing properties and to upgrade — from private condos to landed homes, from HDB to executive or private condos, or from a smaller 99-year leasehold condo to a bigger or freehold condo.”
Toh: My first coup was in 2012, when I closed eight units at Parc Centros in a day. Last year, I sold 13 units at Lake Life executive condo.
Transaction volume in the commercial sector has also halved since June 2013, with the TDSR limiting people’s ability to borrow for real-estate purchases. Navin Bafna, originally from Kolkata, India and now a Singapore permanent resident, has been specialising in the commercial sector since he became a property agent in mid-2012.
Bafna specialises in the sale and rental of strata office spaces in the CBD. He has brokered 40 to 45 transactions in International Plaza over the past few years, earning him the moniker “IP Man” among his clients. The 33-year-old was one of PropNex’s top-performing agents in the commercial sector in February, clocking about $120,000 worth of commissions in the first two months of the year.
Bafna reckons prices of strata office space at International Plaza have fallen by $500 psf over the past two years. Mid-floor units that were sold last year fetched around $1,800 to $1,900 psf. In 2013, they were going for $2,300 psf to $2,400 psf, he notes. He is of the view that there is very limited stock of completed strata office space in the CBD. “There are only 38 completed strata office units listed for sale in International Plaza, Prudential Tower, Samsung Hub and Suntec City,” he reckons.
However, Bafna feels Chinese insurance companies and Indian companies are looking to diversify into real estate, and particularly the Singapore commercial sector. “As with every stock market crisis or global financial crisis, it’s when retail investors rush to the exits that institutional investors come in,” he says. “And that’s what we’re seeing now.”
Bafna: As with every stock market crisis, it's when retail investos rush to the exits that institutional investors come in.
The star property agents are not necessarily just those under 40. According to ERA, four of its 300 top agents are 60 or older. “It’s not their age that matters, but their determination and their drive to succeed that differentiates them,” says ERA’s Chua.
One such star performer is Jerry Lum, who became a realtor in 2009. The 60-year-old had spent 18 years marketing BMW cars before starting his own business in the export of luxury cars to other Southeast Asian countries. He decided to become a property agent because he did not want to sit at home like other retirees. “In this business I am like a franchise- holder of ERA, and I get a licence from CEA,” he says in a phone interview. “Whether I want to earn $100,000 or $300,000 a year is all up to me.”
Lum feels his age is an advantage as most of his clients are his peers in the business community. These are entrepreneurs or senior executives as well as people he got to know when he was selling luxury cars. “It’s a small circle, and we we meet up at events,” he says. “Or when we meet up casually, we do what most old men do when they get together — drink coffee, have a meal or drinks. That’s where I get most of my deals.”
Lum focuses on deals above $5 million. “Instead of 50 small deals, I just do 10 to 15 mid-sized or big deals a year,” he says. “That’s good enough for me.”
Lum: Instead of 50 small deals, I just do 10 to 15 mid-sized or big deals a year. That's good enough for me.
Source: Jerry Lum
This article appeared in the City & Country of Issue 721 (March 28, 2016) of The Edge Singapore.