Property agents put in a lot of effort, and they deserve their commissions. But, it can be a puzzling question for many people, like buyers, sellers, landlords, and tenants. Don't worry, we've got your back with a super easy guide to help you figure out how much to pay them, whether you're buying, selling, or renting!
In Singapore, there are two types of property agents when it comes to commissions.
A landlord's or seller's agent, appointed by the landlord or seller, does a lot of important things:
Comes up with a plan to make the property look great
Finds potential buyers or tenants using different methods (like listing on 99.co)
Sets up and handles property viewings
Helps with negotiations and bids once there are interested parties
Makes sure all the rules and legal stuff are followed
Plus, they have to be registered with CEA (that's the Council for Estate Agencies) and always look out for their client's best interests!
A buyer's or tenant's agent
A buyer's or tenant's agent helps people looking to rent or buy a property in these ways:
Finds and picks out suitable properties
Sets up property viewings
Bargains with the seller's or landlord's agent to get the best deal for the buyer or tenant
The buyer or tenant's agent also gives expert advice, like where's a good place to live, and helps with all the paperwork needed to rent or buy a property.
Just like the other agents, a CEA-registered buyer's or tenant's agent must always look out for their client's best interests. CEA stands for the Council for Estate Agencies, the group that makes rules for property agents in Singapore.
Agents can't be both the landlord's/seller's agent and the tenant's/buyer's agent in one deal because it would create a conflict of interest.
In rental situations, the landlord's agent (and sometimes the tenant's agent) might help with any problems during the lease, like repairs or arguments, but they don't have to.
What is co-broking exactly?
Co-broke, also known as co-broking, is when two agents team up to help make a deal happen. One agent works for the landlord, and the other works for the tenant.
Renting: How property agent fees work in Singapore
While there are no set rules for rental commissions in Singapore, experienced property agents have some common practices. Keep in mind that rates can change based on the situation, like how fast or complicated the deal is. If you're a landlord or tenant, it's a good idea to ask your agent why their commission rates might be different from the ones mentioned below
REMINDER: NO FIXED RULES
Remember, these are just common practices, and there's no strict rule about who pays the agents and how much. It all depends on the situation and how much help the tenant or landlord needs. There are some exceptions:
For unique or popular properties, the landlord's agent might not share the commission because they have lots of interested people.
In lower-end rentals (like rooms under S$1k), the landlord's agent might not get paid by the landlord. Instead, they may collect fees from the tenant because tenants might not have as many options.
In the hot rental market, tenants might even pay their agents to increase their chances of getting a place."
For rent above S$3,500 and a two-year lease, the landlord pays one month's rent as commission
If there's only a landlord's agent (meaning the tenant found the agent on their own), the landlord pays the landlord's agent one month's commission, and the agent keeps it.
If the tenant has their own agent who looks out for their interests, in 2023, it's usually the tenant who pays their agent's commission. Refer to the 'No Fixed Rules' section above for more."
For rent above S$3,500 and a one-year lease, the landlord pays half a month's rent as commission.
If there's only a landlord's agent (meaning the tenant found the agent on their own), the landlord pays the landlord's agent half a month's commission, which the agent keeps.
If the tenant has their own agent who looks out for their interests, the tenant pays the tenant's agent half a month's commission, and the landlord still pays the landlord's agent half a month's commission.
A two-year lease and rent at or below S$3,500
The landlord's agent gets one month's commission from the landlord.
The tenant's agent collects one month's commission from the tenant. If there's no tenant's agent, the tenant doesn't have to pay any commission.
A one-year lease and rent at or below S$3,500
The landlord's agent gets half a month's commission from the landlord.
If the tenant has their own agent, the tenant's agent collects half a month's rent from the tenant. If there's no tenant's agent, the tenant doesn't have to pay.
Selling/Buying: How property agent fees work in Singapore
1. Non-landed private property, such as condominiums
Seller typically pays 2% (but occasionally up to 4%).
Regardless of whether they use a buyer's agent or not, the buyer pays nothing. The seller's agent and the buyer's agent split the commission.
2. The fee paid to resale agents by HDB
Usually, a seller pays a 2% commission.
Commission is often paid by the buyer.
3. Agricultural property
Seller typically pays 2% (but it might be considerably more; there is greater leeway for negotiation as each circumstance is different).
The buyer pays nothing, regardless of whether they work with a buyer's agent or not. The commission is shared between the agents for the buyer and the seller.
No fixed rules: Just like with rental commissions, there are no set rules for property agent commissions when buying. It all depends on the situation, and buying is even more flexible. Here are some exceptions:
Sellers might pay higher commissions if they're in a hurry to sell or if the property is tough to sell.
Buyer's agents may ask for more if they're helping overseas buyers by doing extra work like investment advice. Some agents working with buyers from places like Hong Kong or China might request up to 5% commission, but it's up to the seller to agree.
In luxury property deals (like above S$5 million), there can be special commission plans to encourage the seller's agent to get a higher price. For example, they might start with 2% commission for a minimum sale of S$5 million, but if it sells for more, they get 5%."
Wondering how to save on agent commission when selling or buying a property?
If you're thinking about saving money on property agent commissions in Singapore by buying or selling without an agent, it's worth reconsidering. Property transactions are major financial decisions, and they involve complex laws and rules.
Property agents also bring negotiation skills and experience to the table, which can be crucial in dealing with other agents.
Without proper market knowledge and legal expertise, going solo might lead to delays or even legal issues, costing you time and money.
Before choosing an agent, compare their fees and services. Some seller's agents may ask for Exclusive Rights, meaning they're the only ones marketing and selling your property
If you're a landlord or tenant, do you really need an agent?
As a landlord, having a landlord's agent can save you a lot of hassle. They can find and screen potential tenants and help with tenant issues, depending on your agreement.
If you're a tenant and have the time to search and arrange viewings, you might skip having a tenant's agent. But it's a good idea to rent from a landlord represented by a landlord's agent. There have been cases of tricky landlords taking deposits or making unfair evictions.
Even for a one-year lease, having a property agent on either side can give you peace of mind.