Real Estate agents retain a percentage of the purchase price as their commission. When you employ the services of a real estate agent to either market your property or to look for a property for you, then it is understood that they will get a percentage of whatever the purchase price may be. The amount that they will get is subject to the agreement of both parties. There are usually two agents involved in a real estate transaction, wherein the commission is divided between the two.
The Singapore Institute of Estate Agents (IEA) has finalised and published the recommended commission / fee for real estate transactions. Please click:
Professional Fee / Commission For Real Estate Agents / Agencies
Some commission-related questions you could ask:
Will my property be listed in the Multiple Listing Service (MLS)? When you list your property in the MLS, you give every agent the right to present your property to their prospective buyer. This may lead to a higher price or offer and a shorter waiting period before your property becomes sold.
What kind of Internet marketing will you do? A lot of websites have excellent feedbacks in terms of traffic to their site and visibility of their ads. You may want to consider posting your property with them. Inquire of your real estate agent as to which websites do they use to market your property and give suggestions on the websites that you like it to be seen. Also, ask how extensive the exposure of your property is. How often will it be advertised? How is the advertising done?
What multi-media marketing options do you employ? Is Virtual Tours offered? Do they have a 24/7 streaming video of your property? On what website is it found?
What Exclusive and Customized services do you offer? Do not be afraid to try out different marketing and advertising schemes to market your property. Find out how unique the marketing strategies of your agent are.
What is the effect of the added incentives on the company representing the buyer? Part of the commission from the sale of the property is usually divided between the buyer’s agent and the seller’s agent. If the commission received by the buyer’s agent is less than the standard percentage, they may lose the willingness to encourage the buyer to select your property. Try increasing the commission they receive so as to also increase its exposure to other buyers’ agents, hoping to get a part of that commission.
What is the effect of your marketing to other agencies? It is better to market your property to different agents instead of having an open house or spending more on open advertising. Only a handful of properties are actually sold via these methods. Sales are usually from buyers who were brought by agents. So if you really want to sell your property quickly, advertise to the agents and they will bring the buyers to you.
Lastly, ask yourself...
What is more important to you - getting the most amount of money from your sale, or paying the lowest sales fee? Decide which one you value most so as to know how to price and negotiate the price of your property.
Don't be fooled by discount brokers. The commission that agents get is usually used for profit, marketing and overhead. Since the overhead expenses are basically constant in price, they either cut down on profit or marketing, with marketing being the most logical choice to cut down on. Lesser fees mean lesser marketing. Lesser marketing means lesser opportunities for your property to sell. Lesser opportunities to sell your property will ultimately end up in selling for a lesser price.