Property Agent Commission Rate and Why Is It Increasing?

Updated: May 11


Property Agent Commission Rate Singapore

When marketing or searching for a property, it is common for buyers, tenants, landlords and sellers to engage the services of a property agent despite being able to handle all parts of the transaction if they really wanted to.


A professional property agent would typically be able to do much more than a consumer as they have carried out alot more transactions and can spot the blind-spots and opportunities much better than a consumer who does much fewer transactions in their life time.


Take for example, when buying a home for the 1st or 2nd time, buyers usually do not know exactly what to look out for except for price, location, condition and basic features of the unit.

There are in fact alot more factors to look at that can determine whether your family ultimately enjoys living there and the potential for you to make a decent profit in the future.


The rise of Do-It-Yourself platforms serve those who wish to save on brokerage fees and are willing to take the plunge into researching and execution of property transactions themselves.


It's similar to the fact that anyone can self-diagnose and medicate if they spend the time to read up and apply their knowledge.


The scary part though is not knowing what you do not know and hence, not being able to tell at a glance where costly pitfalls and ripple effects might return to haunt you.

Time is also an opportunity cost that needs to be taken into consideration when deciding whether to spend time or spend money.

Since 2006, when i entered this industry, real estate brokerage fees has more or less stayed the same.


The Council of Estate Agencies (CEA) does not fix a fee structure.


When serving a seller for a private or HDB flat, the usual rate is 2%+GST.


When serving a buyer for a HDB flat, the usual rate is 1%+GST.


No fees are payable when serving a buyer for a private property or new launch condominium as the agent gets paid by their co-broke agent or the developer.


The difference since 2010 when CEA was established is that no longer can an agent collect a commission from both the seller and the buyer.


It was rampant in the past especially in HDB sale transactions where an agent would collect a 2% fee from the seller and 1% fee from the buyer. However, that presents a conflict of interest as the agent would only to represent and negotiate for one party's interest at a time.


It was definitely a step in the right direction.


Fast forward today, as technology and real estate marketing evolved, we now witness alot more creativity and resources required in order to bring in buyers and commission fee structures have hence started evolving.


It used to require only putting up advertisements in the newspapers or property portals in order to get a sale.


But in today's market, with an abundance of supply of resale and new launch properties, an agent would have to pull more stops in order to get a property sold.


Alot more goes into the marketing of a property these days. It's no longer just posting on a property portal and waiting.

Steps Property Agents Take To Market A Property Today


Proactive marketing methods such as putting up ads in FaceBook, Instagram and Google ads and video production have started to change the skills required of a property agent and increased costs dramatically in the process.


For example, where in the past properties were easily sold through just posting and reposting on Propertyguru.com.sg, iProperty.com.sg and 99.co, agents now have to engage a videographer to film an apartment usually at a cost of $600-800, script their presentation flow and practise their lines before a shoot.


With the video they have produced, a daily budget of between S$20-30 per day reasonably would have to be invested in the marketing through social media platforms.


In instances where the property faces stiff competition or isn't aesthetically pleasing, an agent would likely have to invest in making over the apartment and home-staging it for the video shoot.


All in, thousands could be spent before the marketing commences and the financial risks for the listing agent is hence much higher than before.

Granted, a sale would usually more than cover the marketing expenses, we have to put ourselves in the agent's shoes to understand the kind of risk exposure and returns they are getting.


1st, it may take many months or years to get the property sold. In that case, the expenses above would compound and reduce profitability.


2nd, if it costs $3000 to do a home staging and video for the property, the agent runs the risks of having to commit this amount times the number of properties he or she is marketing.


3rd, people can be fickle and life unpredictable. There will be cases of sellers who change their minds midway after an agent has invested thousands into the marketing costs. In such cases, sadly most agents do not get compensated.


So, despite the fact that tech platforms advocating low fees and DIY transactions have popped up in recent years, the changes in the property marketing landscape has instead seen commissions climbed steadily upwards as the workload and costs have increased.


Today, we see realtors charging up to 3-5% for marketing that involves some to all the above modern marketing platforms.

A range of common property marketing packages that help property owners achieve maximum exposure and higher potential offers. These days, even resale properties can involve collective efforts from a team of agents.

Is the higher fee worth it?


It is hard to say for certain as we can only guess whether a buyer would come by at the same price had your agent not put in that extra touch of a home make-over, video tour and social media marketing.

It could mean the difference of getting an offer within a month or a year, the opportunity and time costs of waiting or the emotional draw for a buyer willing to offer that $100K more to secure the property. It’s anyone’s guess.


What is certain is, proactive marketing will put your property in the best light with the widest possible exposure and emotional appeal, and you would end up with alot more interest and a probability of higher offers quicker.


How much is that certainty worth to you?

Need advice for your upcoming property investment plans? Or help getting your property sold or rented?


Get a 1-time free 30 min Property Wealth Planning consultation. Schedule one right now.


A PWP consultation includes:

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- A clear and customised investment road map for your real estate investment journey ahead.

Stuart Chng, Senior Associate Executive Director of OrangeTee & Tie, is a renowned leader and personality in the real estate industry.


He adores music and can play a few instruments decently without upsetting his neighbours. When not doing so, he enjoys pillow fighting with his son and coming up with silly puns which barely amuses his wife.


Professionally, he is a licensed real estate agent, investor, team leader, speaker and columnist for several property newsletters and blogs and is often quoted in media interviews on 938FM, Channel 8, PropertyReport, PropertyGuru and other publications.


Throughout his career, he has helped many clients grow their wealth through selecting great property investments and managing their portfolios actively.


Stuart has also coached many top million dollar producing agents from different real estate agencies in Singapore.

Related readings:


Is Singapore Property Still a Good Investment?


How To Select A Trustworthy Real Estate Agent?


4 Important Entry Signals That Will Greatly Improve Your Property Investment Returns


Tips For Selecting A Good Unit At A New Launch Project

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