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  • Writer's pictureAaron Lin

When To And Why Pay Property Agents?


Property agents are engaged for selling, buying, renting as well as finding tenants.

Property agents take a commission when selling property because they have to incur marketing costs and risks.

Property agents may take their commission from other property agents in the same transaction, depending on the structure of the transaction.


There are four main circumstances where you pay your agent.

Firstly, you pay your agent when you want to sell property. The market norm is around 2-3%. From an agent’s perspective, the agent has to spend money on marketing before they earn a return. The agent will bring buyers for viewing, negotiate prices, settle all the paperwork and complete the transaction if possible. If they sell for too long, the marketing expenses could go above profits, which means that the agent takes on risk. Hence, the agent requires a commission to compensate for that risk.

Secondly, you pay a service fee to your agent when buying a property. The agent will arrange for viewing, represent you in negotiation, offer and close for you, go through the paperwork and complete the transaction. The market norm is around 1-2%. For private property, buyers rarely pay commissions to their agents. Buyer agents usually receive their commissions from the co-broke/seller’s agent. As such, sellers are paying more since the buyer agent is not being paid by the buyer.

Thirdly, landlords pay commission based on rental fees to their agents. For instance, if the tenant is residing for 1 year, the commission will be half a month of rental; if the tenant is residing for 2 years, the commission will be one month of rental.

Finally, some tenants are represented by an agent. However, they do not pay their agents if the rental price is above S$3000. Instead, these tenants opt for a 2-year lease such that the tenant’s agent can ask for a commission from the landlord’s agent. Since HDB rental is very low, this practice mainly applies to the private property market.

There is no agent commission or service fee for new launches in the private property market. The developer will be paying the property agent a fee. In addition, agents do not do BTO or Sale of Balance flats.

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