4 truths about property agent commissions that you need to know

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Property agent shenanigans are much more toned down these days, thanks to the internet/social media. It also helps that buyers/sellers are much more educated than before, and are able to provide more resistance. However, this sensitive issue can still prompt some anger among some buyers and sellers. Quite often, we hear murmurs that the process is still too opaque; or...

Property agent shenanigans are much more toned down these days, thanks to the internet/social media. It also helps that buyers/sellers are much more educated than before, and are able to provide more resistance.Quite often, we hear murmurs that the process is still too opaque; or that there are certain “grey area” practices that work against the client.

So do consider the implications, before you agree to exclusivity. This is particularly important if you have children, siblings, in-laws, etc. who are considering buying your home. Today, from word on the ground, we understand that commissions for new launch properties can reach up to five per cent and sometimes even higher to move units. This number may continue to trend upward, as property agencies consolidate and competition between them diminishes.The worry here is twofold. First, it can mean an inordinate amount is being spent just on commissions, for new launch buyers.

We’ve written about it in detail here, but in a nutshell – it is illegal to do so, and agents caught doing this practice will face disciplinary measures from the CEA. If there’s little demand from the buyer side and the buyer agent calls the shots, then the agent can sometimes negotiate for a higher split.

There’s also a possibility that they’ll end up selling to the buyer who gives the agent the highest commission , rather than a buyer who made the higher offer.

 

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