Agent’s commission – just a %?

How much do you know about your agent’s commissions, other than the amount you have to pay? Test yourself to find out!

1. Are commissions fixed at a certain percentage?
   1. Yes, depending on whether you are the buyer or seller, the percentage will differ
   2. No
2. When should you pay commission?
   1. When both parties have agreed on the transaction price
   2. At the end of the transaction
3. Who should the payee be?
   1. The property agent
   2. The property agency
4. Can my agent collect commission from me and the other party in the same transaction?
   1. Yes, if the agent had helped to do work for the other party too
   2. No
5. Is GST automatically included in the commission?
   1. Yes
   2. No

If you answered ‘A’ to any of the questions, you may not be as familiar with commissions as you would have thought.

Here are the facts:

• CEA does not fix commission rates or provide guidelines on commission amounts so as to allow market forces to drive competitive pricing in the industry. This incentivises property agents to price their services competitively. You are free to negotiate the quantum and components of fees and expenses, and terms with the agent.
• Property agents only earn their commission upon a successful transaction. You should only pay commission after the transaction is completed.
• You should always pay commission to your property agency and not directly to your property agent.
• Property agents cannot collect commission or fees from more than one party in a transaction. If he collects commission from you, he cannot collect a commission or co-broking fee or payment from the other party or from the latter’s agent, regardless of who he has helped do work for.
• Only GST-registered property agencies are allowed to charge and collect GST. Furthermore, whether the GST payable is factored into the commission amount is dependent on the outcome of the agreement between you and your property agent. Be sure to document this in the Estate Agency Agreement with your agent.

Your property agent is professionally qualified and they deliver their service with compliance to their duties and obligations. As a responsible consumer, you should pay them commission when they have fulfilled their duties and have facilitated a successful transaction for you.