Property agents are licensed professionals that represent buyers or sellers in real estate transactions. Agents provide clients with services such as sales, marketing, and advisory in exchange for a commission. Read on to find out about a property agent’s role, commissionable rates, and more.
The main responsibilities of a property agent include advising and guiding clients through the buying, selling, leasing, and rental process. Property agents help to promote and market properties both online and offline. Sometimes, agents may even conduct open houses to promote the property to potential buyers. Other responsibilities include coordinating private viewings and engaging in price negotiations. They should also advise on the process of obtaining a home loan, using CPF monies, and other fees payable. Most importantly, agents must keep you well informed of all offers from interested parties or property agents.
On top of their main responsibilities, property agents may also offer additional services, giving them a competitive edge. Some agents may go the extra mile to coordinate appointments with lawyers and bankers. Other services include a thorough preparation of all required documents. This includes the Option to Purchase, resale application, inventory list, letter of intent, and tenancy agreements. It’s also good to know that some agents do offer a Comparative Market Analysis (CMA) to value a property.
Currently, there are no industry-standard rental commission rates in place. However, there are industry best practices for calculating a property agent commission. The commission rate varies on the services provided by the agent. It also depends on whether the agent was engaged in making a sale or rental.
A Singapore property agent can earn commission through sales of new launch projects, private properties and HDB resale flats.
The developers for the new launch projects will pay a rewarding commission rate of up to 6 per cent whenever a property agent sells a unit. When the location is not desirable, it will be difficult to find buyers. Likewise, if it is a boutique or small development at a premium pricing, the developers must entice the agents with high commission in order to lure the buyers.
For condos and landed properties, the seller will pay his property agent a standard 2% of the sales as commission. The buyer does not need to pay a commission even if they have an agent to act on their behalf. In such cases, the seller’s property agent will split the commission with the buyer’s agent (cobroke).
According to industry practices, the seller of the resale HDB will pay a standard 2% commission rate while the buyer pays 1% commission to the buyer's agent. To prevent conflict of interest, the agent cannot dual representation. So the agent acting for the buyer and seller cannot be the same person.
Nowadays, most HDB resale buyers are direct without an agent to serve them. However, they must be familiar with the resale procedures.
A Singapore property agent can earn a commission for closing a rental deal. The commissionable amount will depend on the lease duration and rent charges.
The landlord will pay one month’s rental to the property agent as commission. The tenant will not need to pay a commission to the agent.
But what happens if the tenant engaged an agent? If the tenant’s agent was involved in sealing the deal, then the tenant’s agent will also receive a commission from the landlord. How this works is that the landlord will pay the landlord’s agent the one-month commission. Then, the landlord’s agent will need to split the commission with the tenant’s agent.
If only the landlord’s agent is involved, the landlord will pay the agent half a month’s rental as commission. The tenant does not need to pay a commission.
The landlord will pay one month’s commission to his/her agent. Meanwhile, the tenant’s agent will collect a month’s commission from the tenant. If no tenant agent was engaged, then the tenant does not need to pay any commission.
In this case, the payable commission fee is half a month of rent. The landlord pays the amount to the landlord’s agent, while the tenant pays the same to the tenant’s agent. If the tenant had not engaged an agent, then he/she does not need to pay any commission fees.
The landlord pays one month rent as commission to the landlord’s agent for helping to secure the tenant. Whereas the tenant pays the same amount to the tenant’s agent. Both landlord and tenant agent must be different person.
1. When can property agents expect their commission?
Property agents will receive their commission after the completion date. This comes with the estate agency service agreement stating that the agent should only be paid after a successful transaction of the property.
Whereas for rental transactions, the landlord will pay the commission to the agent after the tenant pays the first month rent and security deposit.
2. Can I negotiate the commission rate with my property agent?
There are neither guidelines nor fixed commission rates set by the Council for Estate Agencies (CEA). Because of this, property agents are incentivized to offer competitive prices. As a customer, you are free to negotiate the fees, expenses, and terms with your agent.
3. Why do some property agents quote a higher commission for selling a HDB or resale condo?
Although the standard commission is 2 per cent for sale of residential property, some agents may offer additional services such as staging or video marketing.
Staging will be very helpful if the house is vacant and there is no furniture for the potential buyer to visualize the utlization of space. It helps to create an appealing showflat environment. Thus, effectively reduce the time taken to sell a property. The cost for staging a 2 bedrooms condo is $1,500 per month.
Video marketing may reach out to more audience and it allows the prospect to be certain that your house is ideal before they conduct a physical viewing. A one-time fee of $2,000 is payable for shooting and editing of the video. Most agents will absorb this fee if they sell the house successfully within three months.
In the past when there was no COVID-19 pandemic, some may even offer to conduct open houses with prospects during your absence and sell the house in the shortest possible time.
However, it will pose a serious challenge to sell a house which is on a low floor or in an original condition that requires a major renovation. In such circumstances, some agents may request for more than two per cent commission.
Moreover, if you wish to sell your property above market price or valuation, it is reasonable to reward your property agent accordingly.
Some agents will offer a discounted rate of 1.8% to their friends and immediate families. However, very few agents are willing to reduce their commission.
There are more than 30,000 realtors in Singapore. It is important to find someone who is trustworthy and willing to go the extra mile for you.
If you are planning to sell your house, we can recommend you a trusted and experience realtor for a non-obligatory discussion. The listing presentation takes approximately 45 minutes and it will allow you to know the agent better in person and you can understand the sale procedures. We work with knowledgeable agents with proven track records. They are bilingual in English and Mandarin languages. You pay only 1.80% commission rate for the sale of your residential property, inclusive of video marketing cost. Contact us today.