Buying, selling or renting a property is an important milestone in your life.
Yet, it can also be challenging and complicated for some. To smoothen the process, you can engage a property agent to facilitate the property transaction.
Before you engage a property agent, here are five things you should know about their commission.
#1: The rate is negotiable.
Yes, you read it right.
The commission rate is not fixed by the Council for Estate Agencies (CEA) or any other government agency. It is determined by market forces to encourage competitive pricing.
Your property agent may propose a market rate (that ranges depending on the type of transaction), but feel free to negotiate it with your agent to ensure it suits your budget.
#2: There are several factors that might affect the commission.
The most basic factor is the scope of work.
If, for example, you only require your property agent to do paperwork, you can negotiate for a lower commission. If you expect your agent to provide the full suite of services, then you can expect to pay a higher rate.
For the latter, there are also other factors to consider, such as the type of experience the property agent has and the size of his/her database of leads. Some agents focus on certain types of transactions, like HDB resale, or private rental transactions, and in certain locations.
All agents’ completed residential property transactions for the past 24 months are available on the respective agent’s profile page in the CEA Public Register. There, you can view the party they represented, the type of transaction, and the town or general location of the property.
#3: Fix the rate before your property agent starts work.
This is an important step that should not be missed out to minimise misunderstanding after the transaction has been completed.
State the commission rate clearly in the CEA Prescribed Estate Agency Agreement that should be signed between your property agency and you to formalise the relationship, before your agent starts to work on the transaction.
#4: Mind the GST.
There is no avoiding this, unfortunately.
If the property agency that your agent works for is GST-registered, you must pay the prevailing GST rate. Check this with your agent upfront.
Some agencies might agree to absorb the GST and this is something you should clarify with your property agent. Regardless of the outcome, be sure to document the GST payment arrangement in the CEA Prescribed Estate Agency Agreement signed with the property agency.
#5: The commission is only payable to the agency your property agent works for.
In fact, no costs related to the transaction should be paid to your property agent. If they tell you otherwise, you are not being properly advised.
Additionally, the commission is to be paid only after your property agent has fulfilled all the duties listed in the CEA Prescribed Estate Agency Agreement and the transaction has been successfully completed. Payment modes should be verifiable, and these include crossed cheques and bank transfers.
Of course, you can also choose not to engage an agent and handle the property transaction yourself. This is provided you are familiar with and confident to navigate the rules, regulations and processes in a property transaction.
Otherwise, you might want to engage a property agent to do that for you.
Looking to sell your property?
Whether your HDB apartment is reaching the end of its Minimum Occupation Period (MOP) or your condo has crossed its Seller Stamp Duty (SSD) window, it is always good to know how much you can potentially gain if you were to list and sell your property. Not only that, you’ll also need to know whether your gains would allow you to right-size to the dream home in the neighbourhood you and your family have been eyeing.
One easy way is to send us a request for a credible and trusted property consultant to reach out to you.
Alternatively, you can jump onto 99.co’s Property Value Tool to get an estimate for free.
If you’re looking for your dream home, be it as a first-time or seasoned homebuyer or seller – say, to upgrade or right-size – you will find it on Singapore’s fastest-growing property portal 99.co.
Meanwhile, if you have an interesting property-related story to share with us, drop us a message here — and we’ll review it and get back to you.
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