Steven POON Kwok-lim
Chairman, Estate Agents Authority

Dear Fondy,

Thank you for looking after my house in California in the last few months, and for selling it for me. Today Susan, my estate agent, faxed me a statement, setting out the expenses of the sale, from which I saw that she had charged a 6% commission! Although it is something I had already agreed to, actually paying such a huge commission still gives me "excruciating pain".

Estate agents in Hong Kong don't enjoy such high rates of commission, as they get only about 1%. But their work is no easier than that of the Californian agents, and often they have to endure pressure from the community.

Recently controversy has stirred up over the so-called "internal sales" of first-sale properties, and the integrity of estate agents is being questioned by some members of the community.

Many years ago, developers would sell a portion of a development to their staff, business partners and friends through "internal sales", before the public sales would begin. With the transformation of the real estate market, however, some of these "internal sales" have gradually become "public internal sales". Estate agents handle the sale of properties in what are effectively disguised public sales, but without a comprehensive price list from the developer, and that leads to complaints against the agents concerned.

Ever since developers started to deploy estate agents to help them sell properties, a "triangular love-hate relationship" has developed amongst developers, estate agents and consumers. Whether such relationship can be fruitful depends on whether developers can exercise self-discipline, estate agents can raise their levels of professionalism, and consumers can understand their rights and responsibilities.

Since late 1998, the Estate Agents Authority has been gradually implementing the licensing and regulatory systems. The aim of the Authority is to enhance the standard of services and professionalism of the estate agency trade. Through licensing, examination, enforcement and disciplinary action, the Authority has urged the estate agency sector to practise according to the law. After the hard work in the last few years, the Authority is now well received by estate agents, consumers and the community. The work of estate agents has been regulated. Laws and regulations are in place, so that practitioners know what is right and what is not.

The implementation of the regulatory regime is merely the first goal of the Authority. We still have to work hard to raise the professional standards of the estate agency trade. As the Chairman of the Estate Agents Authority, I have set "professionalisation" as our next goal.

Professionalisation starts with the Qualifying Examinations. The Authority will raise the standard and widen the scope of coverage of the Qualifying Examinations from July this year. This will ensure that newcomers to the estate agency trade possess a certain level of knowledge and language proficiency.

The community's response has been positive since then. The response from the trade has been more favourable than I expected, and that reflects their increasing maturity, and also their recognition and support of professionalisation.

In the long run, however, apart from relying on examinations, I think we may need to raise the entry requirements of the trade in terms of education level. At present, one only needs to have completed Form 5 to apply for a licence. It is the stated goal of the SAR government to raise the level of education of young people. Given the rising education level of young people, if we are to make the trade truly professional, and if estate agents are to be well-respected by the community, raising the entry level of education for the estate agency trade will be an inevitable trend. We have not yet reached a conclusion on this subject, and we welcome ideas and suggestions from members of the trade and the community.

Apart from attending to the newcomers, the Authority is also raising the professional standards of practising estate agents and salespersons. Recently, the Authority has launched the "Continuing Professional Development" Scheme to provide practitioners with opportunities to continue learning. The scheme will be implemented on a voluntary basis in the first two years. Practitioners are encouraged to participate, and to earn at least 10 CPD points each year. So far the scheme has been well received by members of the trade and the community.

For the estate agency trade to perform well, in addition to having high-calibre practitioners, it is also necessary to raise consumers' awareness. The Authority handles more than 1,000 alleged non-compliances every year. While some involve the conduct of practitioners, some cases are related to the handling of the cases on the part of consumers. For example, the consumer signing a Provisional Agreement without thoroughly understanding its terms and conditions, or appointing an agent but not wanting to sign an Estate Agency Agreement. The Authority seeks through various channels to educate the community on the important things to pay attention to when appointing an estate agent.

Property development has been a mainstay of the economy of Hong Kong for many years. Last year, the number of property transactions exceeded 123,000, with their value amounting to more than 350 billion dollars. Estate agents played an important role in most of these transactions, which in turn provided a means of livelihood to the 20,000 practitioners of the trade.

In many countries, estate agency is considered a profession, and practitioners enjoy a good status. In the Mainland of China, estate agency is an important service industry, which plays a key role in promoting the nation's economic development. I believe practitioners of the estate agency trade in Hong Kong will have the same respect and social status. My hope and my dream is that, in the same way as we can trust lawyers and architects to provide us with professional services, we can also trust estate agents to do the same.

Dear Fondy, are you coming back to have a share of the pie?

Steven Poon 4th June 2005