How much should you be paying for Property Agent Commission?
Most engage agents based on service and results.
While others engage agents based on their fees.
Found your ideal property agent based on our helpful guide (Complete Guide To Engaging The Perfect Property Agent 2023)?
Now it’s time to discuss and agree with your agent what the property agent commission fee (if fixed) or structure (if flexible) will be like.
In a nutshell, the property agent commission is the payment you pay your agent in exchange for their work in helping you find and secure your ideal home, or to sell your existing property.
The Council for Estate Agencies (CEA) Singapore does not fix commission rates or even provide guidelines on this. It is to allow market forces to drive competitive pricing in the industry.
Today, let’s look at some factors that you can consider to determine a fair property agent commission structure.
Table of Contents
Property Agent commission For Sale
Isn’t there a range you ask?
Well, if you asked your friends and family, some common, old-school responses you might hear include:
HDB Flats
- Seller usually pays 2%
- Buyer pays 1%
Private Properties (Condominiums, Apartments)
- Seller usually pays 2- 4%
- Buyers don’t need to pay commission. (If the buyer has a representing agent, seller’s agent to split the commission with co-broke agent.)
Private Properties (Landed Properties)
- Seller usually pays 2- 4%
- Buyers don’t need to pay commission. (If the buyer has a representing agent, seller’s agent to split the commission with co-broke agent.)
The property landscape has evolved over the past decade into a saturated and hyper-competitive market, where thousands of homes are listed on DIY platforms competing for the same pool of potential buyers.
A more accurate range is perhaps, as shared by Channel NewsAsia report in December 2018, showing that local property agent commissions can range from 2% to 5%, depending on several factors.
Curious? Let’s unravel these different factors that determine how much you should pay your property agent.
Difficulty and Urgency of Selling Your Property
Makes sense doesn’t it? Not all properties on the market are equal.
Some are less appealing (could be an older flat, shoddily maintained, inconvenient location, low floors etc.) than others, and are more difficult to sell as compared to others in a better situation (prime location, new estate, well maintained etc.)
In such situations, even with lowered property prices, it is still going to be harder to sell.
In a saturated property market, with hyper-competition coming from all the DIY platforms posting thousands of properties, do you think your property is going to be in demand (especially if it needs to be let go quickly)?
Expectation of Your property selling price
With all things being equal, a property with a lower asking price is likely to be an easier sell compared to a similar property with a higher asking price.
If your neighbours are selling their apartment for $1 million and you are asking for $1.1 million, your agent is going to have to put in extra effort to make that happen.
This may mean having to search harder for more buyers willing to pay that higher price, facilitating more viewings and definitely dedicating a longer time and effort for marketing.
Not all agents know how to price your house right.
Property Agent Value-added Services Offered
Selling a house in the saturated and highly competitive Singapore market these days take a lot more effort than it did 10 years ago.
Nowadays, to even get your property in front of the right potential buyers, takes plenty of effort – and that is just the first step.
Successful property agents that aim to help their clients get the best possible selling price now need to provide significant value-added services to do so.
From providing home styling services to doing market analysis, to advising suitable price position, to coming up with detailed marketing strategies (which platform to use, targeting buyers using social media platforms and unique content), property agents now need to provide these additional services and expertise at additional cost to best service their clients.
Let’s look at some of them;
1) Marketing Platform
Market your house in more than one platform.
Propertyguru, 99.co, SRX, Edgeprop, Social media, can also become a powerful marketing tool for your unit.
Luring in potential buyers who are digital natives with aesthetic photos (no cat-fishing) and features of your unit that would relate to them.
How many platforms are your agent advertising in?
2) Profession Add-on
Professionally-angled photos and videos has become a trend of attracting buyers to consider coming down for viewings.
And it takes effort and cost to the property agent to add all this services to market your unit.
Take some time to Understand what are the actions and game plan the agent will be carrying out during marketing.
3) Marketing Report
Get to know what kind of services they add on during viewing.
Old-school salesmanship no longer works as much in today’s market. Buyers would want to look at market analysis reports comparing price trends and upcoming developments that will interest them in buying your unit.
During get-to-know session with the agent, do try and understand their working style.
Furthermore, knowledge expertise is vital for more complex circumstances for example, HDB contra where you sell and buy properties concurrently.
Property agents are required to determine the exact timeline or you may end up with no place to stay.
Property investments such as Sell One Buy Two will also require in-depth knowledge of the market situation and a comprehensive understanding of financial calculations.
After knowing these behind-the-scenes efforts, doesn’t it make sense to motivate and reward the extra-hardworking agent who’s doing their best to get you that ideal price?
So how much property agent commission should I pay?
Use the above factors as a guideline to help you decide.
Speak to your agent and understand their perspective too.
My recommendation is to consider how value – time saving - your agent is providing to the transaction and adjust the commission fee accordingly.
When to pay property agent commission
Be fair to your property agent.
Pay the agreed commission after he/she facilitates a successful property transaction.
Commission payment should be made the to your agent’s property agency, and not to the agent, after a transaction is completed.
Conclusion
All in all, there is no best choice on how to sell your house and choose the agent.
However, these factors should be able to help you understand what are the pointers to consider when discussing the commission package with your agent.
At the end of the day, a good marketing effort with the right presentation skill set definitely will increase your chance of a higher selling price.
Bonus for my readers
Thank you for taking the time to read my article.
If you’re seeking a win-win scenario where you won’t end up paying your agent more than necessary, why not schedule a discussion today?
By doing so, you can explore how to negotiate a fair deal that benefits both parties.
Who should apply?
- First-time home buyers who are looking for guidance on how much to pay in agent commission fees.
- Property sellers who want to ensure they are paying a fair commission rate to their agent while maximizing their profits from the sale.
- Investors who are looking to invest in Singapore and need the help of an experience real estate consultant to manage their transactions.
Questions and Answers
Q1) Do I have to commit to working with you after our initial discussion?
Answer: Having an initial discussion is a great starting point, and there is absolutely no obligation to work with me after that.
Awards and Accolades
What My Clients Say About Me
Self Introduction
Greetings! My name is Rick Long, and I am proud to serve as the Associate Division Director of Huttons Asia Pte Ltd, with over a decade of experience in the real estate industry.
My passion for helping clients find their dream homes has grown exponentially during my tenure in the field. As a graduate of Singapore Polytechnic, I have always valued the importance of hard work and determination.
My prior experience serving in the airforce instilled in me the value of teamwork, perseverance, and discipline.
Over the years, I have been privileged to receive several accolades for providing exceptional service and dedication to my clients.
My ultimate goal is to ensure that each individual I work with has the best possible experience, whether they are buying or selling a property.
One of the most rewarding aspects of my work is receiving glowing five-star reviews from satisfied clients.
Knowing that I have positively impacted someone’s life is truly humbling, and it motivates me to continue striving for excellence every day.
When I am not working, I enjoy spending quality time with my loved ones, indulging my passion for sports, and exploring the rich and diverse culinary landscape of Singapore.
Amidst the bustling pace of life, I relish moments of calm by immersing myself in the art of tea-brewing and teapot appreciation.
My commitment to delivering exceptional results to my clients is anchored on my extensive knowledge and experience in the real estate industry.
Above all, I always strive to be kind, respectful, and approachable.
Thank you for taking the time to learn a little more about me. I look forward to the opportunity of working with you.
Additionally, Rick is a proud fur daddy to two rescue kitties and loves spending his free time with his wife and furbabies. He believes in giving back to the community and volunteers his time to animal welfare causes whenever possible.
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Looking to upgrade from Hdb to condo? – Read more (Sell Hdb buy condo)
What to take note when selling Hdb resale flat? – Read more (Hdb Resale Process)
Buying another Hdb flat, and using the fund from current home? – Read more (Hdb contra)
Why do some Hdb flat price depreciate so much? – Read more (Hdb depreciation curve)
What is one of the most common reason for property negative sales? – Read more (Cpf accrued interest)
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Great info.
I think its fair to pay comm to an agent, especially in today’s market where the agents have to work harder. However based on past experience we do tend to get some agents that give me the feeling that they just want to close the deal at a lower price which can be quite sian at times.
Hi Entityx,
Thanks for your comment, yes you are right. More often than not, we tend to hear about the bad experiences of clients too. But ultimately, I guess regardless of the trade we are in, there will always be a minority group that is not motivated to act in the clients’ interest. At the same time, there is also another group of us that welcome comments, and feedback as factors to push us towards continuous improvements and towards a win-win situation for everyone.