When buying or selling a house in Singapore, whether you are the buyer or the seller, you are likely to need a real estate agent to assist you. So, in what aspects can a real estate agent help you? And how do they charge? This article will provide you with the relevant information.
Do You Need a Real Estate Agent When Buying or Selling a House in Singapore?
Real estate agents play a crucial role in the real estate market in Singapore. They assist both buyers and sellers in completing transactions, providing professional advice and services, and facilitating the smooth progress of transactions.
Types of Real Estate Agents in Singapore
Real estate agents in Singapore can be divided into buyer's agents and seller's agents based on the clients they serve. As the names suggest, a buyer's agent is appointed by the buyer and represents the buyer's interests, and the same goes for a seller's agent. They represent the respective positions and interests of the buyer and the seller. To avoid conflicts of interest, the Singaporean government does not allow a real estate agent to represent both the buyer and the seller simultaneously. This means that in the same transaction, an agent cannot charge agency fees from both parties.
The Role of Real Estate Agents in Singapore
A buyer's agent helps homebuyers accurately match properties, provides real estate market information and property analysis, saving time and effort in searching for and viewing houses. Once a house is selected, the agent assists in price negotiations between the two parties to ensure a fair and reasonable transaction price. They can also connect with banks and lawyers on a pro bono basis to assist in coordinating relevant matters. With professional knowledge and extensive experience, a good real estate agent can provide clients with valuable professional services, enabling them to save money, time, effort, and worry.
A seller's agent provides market trends and information to help sellers accurately price their properties. They create marketing materials such as photos and videos and promote the property through multiple channels, including real estate websites, social media, and industry networking. They help screen potential buyers and conduct property viewings. Once a buyer shows interest in the property, the agent assists in submitting the buyer's offer, facilitates price negotiations between the two parties, and helps the seller issue the Option to Purchase (OTP) and handle related matters. They also assist the seller in connecting with lawyers to ensure the smooth completion of the entire transaction process.
Transactions Without an Agent
Although there is no requirement to appoint an agent for a transaction, for buyers lacking experience and professional knowledge, DIYing the entire process can be not only time-consuming and labor-intensive but also carry significant risks. For example, it is easy to overlook major flaws in the property, fail to conduct basic background checks on the other party, or misunderstand the market housing price level, leading to over- or under-bidding. This could result in saving a small amount but losing a large amount, ultimately making the transaction uneconomical. Especially in price negotiations, a direct buyer without an agent is often at a disadvantage compared to a seller with an agent. It is advisable to find an agent who represents your interests to oversee all aspects of the transaction, as it is more reliable and reassuring to leave professional matters to professionals.
Even in some special cases, such as when the buyer and seller are relatives or friends, you might consider handling the transaction on your own. However, to avoid legal disputes, it is advisable to seek at least the guidance of a professional.
How is the Agent Fee Charged?
The Council for Estate Agencies (CEA) in Singapore does not provide guidance or regulations on the commission rates charged by agents when buying or selling houses. Therefore, the agent fee is entirely influenced by market supply and demand. Generally, the agent fee is calculated as a certain percentage of the transaction price of the property. You can negotiate the percentage with the agent you hire and sign a service agreement. Note that you should pay the commission to the real estate agency, not directly to the agent. Additionally, if a real estate agent violates any regulations, you can file a complaint with the agency or the industry association CEA.
The agent fees for buying and selling houses usually vary depending on the type of property being transacted, whether it is a new or second-hand property. The following are the common market situations:
HDB Flat
New HDB Flats
Buyers directly apply for purchase through the HDB's flat transaction system, so they do not need to pay any agent fees.
Second - hand HDB Flats
Usually, the seller pays 2% + GST to the seller's agent, and the buyer pays 2% + GST to the buyer's agent. If you handle the buying and selling process on your own without your own agent, then you do not need to pay any fees to the other party's agent. It is a serious violation if the other party's agent attempts to charge you.
Condo
New Launch
Developers will pay the commission to the buyer's agent, and the specific commission rate is determined by the developer. That is, if you buy a new condominium from the developer, even if you are assisted with your own agent’s help, you do not need to pay the commission.
This is because developers usually authorize the sales agency of the property to 1 to 4 real estate agencies and pay the buyer's agent fees for the buyers brought by these agencies. Whether you visit the show flat accompanied by your own agent and purchase your desired unit, or you visit the show flat on your own and make a purchase, the purchase price remains the same. When you decide to buy a unit, the real estate agency on duty at the show flat will assign an agent to deal with the direct buyer and receive the commission paid by the developer.
Resale Condominiums
When buying and selling a second-hand condominium, the seller usually pays 2% + GST to the seller's agent (this may fluctuate depending on the specific situation, and in some transactions, the commission can reach 3% - 4% or even higher). The seller's agent usually shares this part of the commission with the buyer's agent, negotiating the sharing ratio between the two parties. That is, the buyer does not need to pay the commission. In the case of a direct-buyer transaction, the seller's agent will receive the full 2% + GST paid by the seller.
Notes
When choosing an agent, you should fully understand the agent's service scope, agent fees, past performance, and other relevant information to ensure the best service experience.
Confirm the details of the fees, including whether there are hidden fees, newly added temporary fees, and whether the commission includes the Goods and Services Tax (GST). If your real estate agency is a GST-registered company, it can charge GST from clients. For example, if the commission amount is S$10,000 and the GST is calculated separately, the agency can charge the client S$10,900 (the prevailing GST rate is 9%).
Please note that the commission should be paid to the real estate agency, not directly to the agent. Real estate agencies and agents themselves are not allowed to handle any funds involved by either party in the house transaction, including deposits, option fees, down payments, stamp duties, and purchase prices. The commission is solely for the agency service and is not included in the property transaction amount.
Conclusion
To ensure the smooth progress of the transaction and protect your rights and interests, it is recommended that you find a professional and reliable agent to collaborate with at the beginning of your plan to buy or sell a house. This can help you save money, time, effort, and worry.
We highly recommend using Housebell, which offers a vast array of genuine property listings sourced exclusively from CEA-certified agents. This ensures safety and reliability while avoiding scams, unlicensed agents, and sub-letting issues. If you have any questions, feel free to contact the online customer service for professional assistance.