Updated: Sep 6, 2020
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.