A property-listing portal has come under scrutiny for offering half the commission earned by agents back to the buyers.
The Council for Estate Agencies (CEA) is looking into home-grown site DirectHome, after complaints from property agents alleging that the firm breaks existing rules by promising 50 per cent cashback of a typical commission on a new condominium unit to entice buyers to use its service.
A CEA spokesman told The Straits Times that whether the company flouts any laws under the Estate Agents Act "depends on the actual facts and circumstances, such as how DirectHome and/or property agents are involved in the transactions, and the source and flow of the monies for cashbacks".
Appropriate action will be taken against DirectHome if it is found to have conducted unlicensed estate agency work, she added.
On Thursday, the regulator issued a circular to property agencies, reminding them that the giving of direct or indirect benefits as a way of obtaining clients is "disreputable and tarnishes the professional image of the real estate agency industry".
Housing agents who work with or use such third-party platforms to offer such benefits would be in breach of the rules, the CEA added. It named DirectHome as an example of a third party giving such benefits.
DirectHome founder and housing agent Kiegan Chia, 37, said the company itself has not crossed any lines, "as we are not an estate agency".
He added that the firm, which has about 10 people, does not directly employ any housing agents.
The two-year-old firm, which claims to have 130,000 users, was highlighted by the CEA last year for its do-it-yourself portal, as an example of a property firm capitalising on technology.
In recent years, the authorities have pushed for more productivity in an industry that observers said is saturated with too many agents.
In its reply, the CEA said it welcomes disruptions and new business models "if they offer value-added services and more options for consumers, as well as contribute to raising the professionalism and productivity of the industry".
Mr Chia said his firm helps customers get more value out of a property transaction. He said: "There's a huge disparity between the amount of commission a property agent gets and the actual work he does, which is not that much."
He added: "We receive a lot of hate mail from agents. But not a single one has been from a member of the public."
International Property Advisor chief executive Ku Swee Yong urged the CEA to take action, as other property agents lose out on deals by not being able to offer cashback. "The message being sent out is: If you're ethical and follow the rules, you'll end up losing some business," he said.