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Why do you need an estate agent?

Some people think estate agents are not necessary, citing poor service standards or even complete lack of service at some agents, as well as the availability of many free property websites that carry a large number of property listings. I have sometimes heard assertions that estate agents can be dispensed with in Hong Kong’s transparent and mature market. I think, however, these people have confused functionality with service quality.

It is true that some estate agents in Hong Kong are not delivering a service commensurate with a sophisticated market and in some aspects lag seriously behind their counterparts in advanced economies such as North America and Britain. Some even have problems with integrity. But that doesn’t in anyway diminish the importance of their function as the go-between. Let me ask you this: if you are selling a three-bedroom sea view flat in Repulse Bay without the help of an estate agent, do you know –

~ what price tag you should put on?

~ what other flats in your building or the neighbourhood are asking for?

~ what are the competing properties in the neighbourhood and how do they compare with your property?

~ have any similar flats been sold recently and at what prices?

~ in what condition the other similar flats were sold?

~ what new developments are planned or going on in Repulse Bay that will affect your property value in one way or another?

~ how high will the building under construction in front of your property will rise to and how will it affect your sea view?

~ how to write an attractive description and take good pictures of your property to post it on a property website or to place an ad with a newspaper / magazine?

~ how to continue marketing the property when all sorts of media exposure have been exhausted and the property still doesn’t sell?

~ how to sell the property in a sluggish market?

~ what your flat’s actual gross area and saleable area are?

~ if your enlarged window and enclosed balcony are unauthorised structures? And the converted master ensuite from two bedrooms?

~ if the storeroom you erected on the roof with temporary materials needs approval from the Buildings Department?

~ if it’s illegal if you do not tell the prospective buyer that your bathroom has a soaked wall caused by leaking pipes or the sewage pipes are blocked?

~ how much time you will have to spend taking buyers to view the property and negotiating with them and can you afford the time and patience?

~ how many times you will need to attend viewings before striking a successful sale?

~ if can you go back to the buyer when you find out he was the only one who had made an offer but who you had shooed away because of his lowball number?

~ how to squeeze the last dollar out of the buyer without breaking the deal?

~ how to prepare a preliminary sale and purchase agreement before you employ a solicitor?

~ why you cannot prevent the buyer from rescinding the sale and purchase agreement by challenging your legal title even if you have made declaration of your unauthorised structures?

~ how to resolve the quandary when there is an unauthorised structure in your property and you have agreed to sell it “with good title” but in “as is” condition? And how the buyer can get a mortgage when there is an existing unauthorised structure?

~ how to make a binding or a non-binding preliminary agreement and what are the merits and demerits of them?

~ what you can do when a higher offer is received only after you have signed a preliminary agreement?

Or, if you are a landlord trying to let your flat, do you know, in addition –

~ if the tenant is only gathering market evidence to bargain with his existing landlord?

~ when is the high season and when is the low season?

~ what incentives major landlords are offering to entice tenants and how you can match them?

~ what you need to do to make the property attractive without spending a fortune just for a two-year lease?

~ what to do if the co-owners have decided to refurbish the external walls, thus blocking the sea view but the actual work has yet to start?

~ what are the landlord’s usual obligations before and during a tenancy?

These and many other questions will arise well before you engage a solicitor for the sale or the tenancy. If your answers to the above are affirmative, congratulations! You can dispense with the service of an estate agent.

But if you have problems in regard to the above, you need an estate agent.

A professional estate agent will provide you with the necessary information for you to make those important decisions on pricing, timing and marketing. He will also advise you on market conditions, comparable or competing listings, marketing strategies and negotiation tactics. You may leave the deal negotiation to the agent while maintaining a cool head to make wise decisions. Viewings and walk-throughs are better handled by estate agent, who knows best how to prepare and present the property. Documentation may be handled by the agent who has extensive working knowledge and experience. With his expertise, it is easier for an estate agent to close a deal acting as the catalyst than a direct negotiation between seller and buyer or landlord and tenant, who may easily run into deadlock. Estate agents are also well trained in managing handovers and the follow-ups after completion of a sale or signing of a tenancy. Now, tell me you don’t need an estate agent.

By Koh Keng-shing