Key Things to Know about the SEAA Best Practice Guide for Co-broking Commission

Mar 2025 - 3 min read

The Singapore Estate Agents Association's (SEAA) Best Practice Guide for Co-broking Commission was officially launched on 14 November 2023, during SEAA’s Singapore KEOs and Leaders Conference.

Here’s a quick backgrounder: The Best Practice Guide is an important part of one of the Memorandums of Understanding (MOUs) signed that day, between SEAA and 16 estate agents (EAs) which represented about 88% of real estate salespersons (RESs) in Singapore then.

The Best Practice Guide seeks to address co-broking disputes and potential conflicts of interest faced by RESs, by encouraging them to collect commission only from the client that they represent in a property transaction.

The key principle of the Best Practice Guide is that RESs should avoid conflict of interest in their work and be paid for their services rendered to their clients, just like any other professional service engaged by consumers.

Here’s what else you should know:

1. The Best Practice Guide is aligned with industry practices in other jurisdictions

In a typical co-broking scenario, two or more RESs – representing different parties in a transaction – will work together to complete the transaction for the benefit of their respective clients.

According to SEAA, there is no uniformity in the current practice of how RESs are renumerated.

For example, in some sale transactions, the seller will pay commission to the RES representing them. On the buyer’s side, it is up to the discretion of the buyer to pay commission to the RES who represents them – or not.

If the buyer chooses not to pay the commission, the buyer’s RES will negotiate with the seller’s RES to share the commission. The sharing of commission would then be strictly an agreement between the RESs involved.

This creates a potential conflict of interest as RESs representing buyers may find themselves caught between (a) putting their clients’ interest first to negotiate for a lower price for the buyer and (b) protecting their commission in a co-broking situation by convincing the buyer to accept the seller’s asking price.

A similar dilemma could occur in rental transactions.

In addition, a buyer's or tenant's property agent may show their client only those listings where the other party's property agent is willing to share the commission, instead of showing all other available listings that meet the client’s requirement.

SEAA shares that adopting the Best Practice Guide on Co-broking Commissions will align the industry with other jurisdictions, where the agents collect commission from the party that they represent.

2. It is already in effect

The Best Practice Guide came into effect on 1 July 2024, and it is gaining support from key industry players.

As at February 2025, 70 EAs representing 90% of RESs in Singapore have adopted the Best Practice Guide.

The guidelines represent a step forward in promoting a more consistent industry practice. This is not an entirely new practice, as RESs typically collect commission from their own clients directly for HDB resale transactions.

SEAA says that change will take time, but by maintaining transparency and educating consumers on the advantages of having a dedicated RES advocating for their best interests by agreeing to pay a commission fee, clients of RESs are more likely to understand and accept the commission structure.

3. There is a process for resolving co-broking disputes

SEAA has also partnered with the Law Society of Singapore to establish a Dispute Resolution Scheme for its members.

SEAA members are encouraged to use the mediation and arbitration schemes offered by the Law Society to resolve any disputes arising from co-broking arrangements between EAs and RESs.

More details can be found on SEAA’s website.

Information accurate as at 25 March 2025