What to take note of when engaging a property agent

Property agents can facilitate property transactions and provide advice to you throughout the process. They are responsible for promoting and safeguarding consumer interests in property transactions, and are required to comply with all laws and regulations.

Responsibilities of property agents

Your appointed property agent should:

• Be professional, knowledgeable, and act in your best interests. He/ she should seek your prior consent before advertising your property, and declare to you any conflict of interest and referral fees received.

• Only represent you in a property transaction, i.e., he/ she cannot be appointed by both buyer and seller or tenant and landlord, for the same transaction, which is an offence.

• Update you on all offers and proposals, and explain to you all relevant documents.

Before engaging a property agent

Verify if your property agent is registered with CEA

You should ensure that your property agent is registered with the Council for Estate Agencies (CEA) through a licensed property agency, should you decide to engage one.

Find out how you can verify your property agent and view their past transaction records.

Negotiate your commission rate

You should also discuss and document the agreed commission rate using one of CEA’s Prescribed Estate Agency Agreements before entering into a contract with your property agent. Commissions are not fixed, and you are free to negotiate the amount or rate. You will also need to clarify if GST is included or excluded in the commission to be paid. Only GST-registered property agencies can charge GST.

Important documents

There are two important documents that you will need to take note of when engaging a property agent:

1. CEA’s Prescribed Estate Agency Agreement

The CEA Prescribed Estate Agency Agreement is a binding contract between you and the property agency to protect the interests of both parties. It is a recommended agreement which details the:

• Duties of the property agencies and agents

• Agreed commission rate

• Requirement on the property agency or agent to declare any actual or potential conflict of interest which may arise

You can choose to sign an exclusive or non-exclusive agreement, depending on your needs and preferences.

You are advised to use CEA's Prescribed Estate Agency Agreement when engaging a property agent, even if the property agent is someone you are familiar with.

Before signing any of the Prescribed Estate Agency Agreement, you should ask your property agent to go through the clauses in the agreement with you.

If you and your property agent wish to include mutually agreeable terms and conditions that are not in CEA’s Prescribed Estate Agency Agreement, these additional terms should be added in the space provided or on a separate pink sheet of paper. The additional terms cannot conflict with, or vary from, the prescribed terms.

You should only sign the Prescribed Estate Agency Agreement when you have understood all clauses, especially those on commission.

2. Customer's Particular Form

Once you have decided to engage a property agent, your property agent will require you to fill in a Customer’s Particular Form with your personal details. This mandatory form helps identify parties involved in a property transaction, and mitigate the risk of money laundering, proliferation financing, and terrorism financing in Singapore.

Your property agent should also go through and assist you with:

• Your eligibility to rent/ rent out or buy/ sell a property

• Relevant CEA checklists, including the various due diligence checks, involved in a typical residential property transaction

• Complete the necessary procedures and paperwork for property transactions

After appointing a property agent

After you have appointed a property agent, if you are a seller or landlord, he/ she must:

• Seek your prior consent before advertising your property

• Ensure all material information related to your property in the advertisement is accurate and verified, e.g., lease term, floor area etc. The advertisement must not contain any false, misleading, or discriminatory material that negatively impacts the diverse nature of Singapore’s society

• Arrange for property viewings

• Inform you all offers, counter-offers, or expressions of interest in your property from interested parties or their property agents

Negotiations

Property agents can only act for one party in a property transaction.

In a property transaction, your property agent must only represent you and collect commission from you. He/ she cannot represent and collect commission from both parties in the property transaction, e.g., buyer and seller, landlord and tenant, which is an offence.

However, your property agent can help the other party with their paperwork as long as they have obtained your consent and clearly state that they are neither acting on behalf of nor collecting any fees from the other party.

Request for information on the property

If you are buying or renting a property and request for more information on the property, your property agent should make reasonable effort to obtain such information from the other party or their property agent and convey it to you. These information could be, but not limited to, loan shark harassment experienced by the seller or landlord of the property.

For more information on rental property transactions, you can refer to our webpage on renting or renting out a property.

Co-broking

Co-broking refers to a situation where two or more property agents, representing different parties in a property transaction, work together to complete the transaction for the benefit of their respective clients.  For such co-broked property transactions, your property agent may share or receive a portion of commission with another property agent. The sharing of commission is strictly an agreement between the property agents involved.

The benefits of co-broking are:

• Sellers: Open the property to a wider pool of potential buyers, which may attract more offers.

• Buyers: Property agents can tap on their networks to provide more property options for you to choose from

Complete the necessary paperwork

Your property agent must be familiar with the property transaction procedures and the forms used. They must act lawfully and guide you through, and help you complete and submit the necessary forms, documents, and information required for your property transaction.

Your property agent must give you sufficient time to read and understand the content of the forms used before signing, and ensure you receive copies of all signed documents. 

Closing the property transaction

Paying commission

Once the property transaction is completed, you will need to honour the deal and pay the agreed commission.

You should only make payment to the property agency, and not to the property agent. For rental transactions, you should pay rent to the landlord directly.

Handling transaction monies

You should pay the payee directly (e.g., If you are a tenant, you should pay the owner of the HDB property directly), and not pass the payment to the property agent.

Property agents should not handle any transaction monies and are prohibited from handling the following:

You can refer to the following infographic on what kinds of payments are involved in property transactions, and what property agents are allowed to handle.

Reimbursement situations

There may also be occasions where property agents might offer to help their clients make payments with their own money, and seek reimbursement from their clients later.

You can refer to the following table showing the different situations in which property agents are allowed to pay first on behalf of their clients, then seek imbursement.