Is public grading of property agencies fair or foul?

Find out why CEA’s plan to implement grading system is contentious.

The Council for Estate Agencies said last week that property agencies will soon be publicly graded based on the quality of their agents.

According to Straits Times report, the grades will primarily be decided by the number of complaints lodged with the CEA from the public against an agency, as well as instances of disciplinary action taken against its agents. A working group is being formed to finalise the criteria.

The CEA also said that it is unlikely to issue letter grades like “A” or “B”, but rather bands such as “Excellent”, “Fair”, and “Poor”.

While grading system is generally deemed as a good disciplinary action to prevent agents’ abuse, property agencies interviewed by Singapore Business Review pointed out several downsides.

Here are their comments:

George Tan, director, Savills Residential

It's good to have a grading system. However, we have to take into account of the fact that being judged purely on the number of complaints may not be truly representative of the actual conduct of the agency. Anybody can make a complaint to CEA on frivolous ground. By chalking up these frivolous complaints, an agency will be penalized. Take 2 examples of frivolous complaints: Vendors can lodge complaints if they don’t want to pay fees, or they can't get what they want, even if the agent is doing his job well.

The grounds of the complaints must therefore be properly verified and substantiated.

Giving "excellent" as a commendation is good. However, it should just stop at that grade for the exceptional companies. If the agencies not get the Excellent Grade, just don't give any. It’s just like Asia Property Awards. Having a "fair" and "poor" category lowers the image of the whole industry. Also, where does one cut off the definitions for Excellent, Fair or Poor? A small agency with just a handful of agents that hardly deal in a year can fall into the Excellent category whereas a large agency that is active in all segments of the market but, who by nature is active, is almost bound to receive complaints and thus be unfairly penalized.

The Asia Property awards has terms like "Excellent" and "Commendable" which is more politically correct and using this can be a positive rather than a "negative" motivational force.

Agencies awarded " Excellent" or "Commendable" will be looked up upon while agencies that have not made the grade will strive to get the award without being weighed down by the sneering mentality of the public.
For our industry that thrives on positive motivation, for grades like “Fair” or “Poor”, it immediately generates negative vibes for the business of the agency. Once applied, the public will keep that in mind and even if they work hard to finally achieve the good grades, the stigma remains for a long time.

If they did not meet the criteria or have not performed well, it's better not to have a grading. People would then ask why they are not graded, in this instance; they will be more motivated to work towards achieving the grading without a heavy negative impact on their business.

After all, the objective of grading is to motivate better operational behaviour.
Also as agents are not paid a salary, if they misrepresent, they can easily leave the company. However, the agency will have to solely bear the consequences of the grading, especially if a large group of agents leave them.

Of course the agency must help make sure agents behave, but, there must be a mechanism to tie the rogue agents down too.

Sze Teck, senior manager, Dennis Wee Group Research

The move by CEA is neither a good nor fair initiative. Salespersons are still very mobile in this industry and hence it is meaningless to grade estate agencies when the rogue salespersons can just simply move on to another estate agency and leave the current agency to bear the repercussions of an unfavorable grading. As it is now, the public can search CEA website to find out whether a salesperson has an unfavourable record.

One bad egg does not represent the whole basket.

Salespersons also receive letter of compliments from their clients, should this not be considered as well?

Estate agencies may have to suffer the repercussions of a unsatisfactory grading for up to a year even though there may be significant improvements or no more complaints as such a grading system can only be done periodically likely on an annual basis.

Conversely, clients may engage a salesperson on the assumption of his/her service based on the agency's grading. And should the experience be unsatisfactory, the client may feel "shortchanged" by the grading.

Past records may not be indications of future performance.

In the end, consumers may be lulled into thinking such a grading is indicative of service levels. Their interests are not served at all.

here should be no grading system in our opinion. Institutions for professionals are never graded so far. Examples hospitals, law firms, architect firms, etc. Even service-oriented institutions such as insurance companies, banks, etc. are also never graded.

Instead, CEA should consider just a simple acknowledgement system on the level of service. Example, a merit or star or excellence recognition for those agencies who have done well and just simply remain silent on those that don't.

Rewarding for good performance encourages salespersons to improve.