Agent Charging 0.5% Commission?

[bluelit3 0]

My parents are intending to sell off their HDB Executive flat and buy a smaller flat. They heard from other relatives that there are agents charging only 0.5% commission for the transaction.

I dont really trust them but I need more information abt these kind of agents so that I can 'educate' my mum. She thinks that y should we give agent so much commission since there are people charging lesser.

Appreciate all advise

[seek_a_home 0]

My parents are intending to sell off their HDB Executive flat and buy a smaller flat. They heard from other relatives that there are agents charging only 0.5% commission for the transaction.

I dont really trust them but I need more information abt these kind of agents so that I can 'educate' my mum. She thinks that y should we give agent so much commission since there are people charging lesser.

Appreciate all advise

U sell flat : 2% payable

u buy flat : 1% payable

Usually there are 2 scenarios to this case :

1. First, u got to ask the 0.5% means 0.5% for selling the executive flat OR 0.5% for buying the smaller flat. They will most probably tell u, if you let him help u sell your current flat and buy flat for u at the same time, he will charge 0.5% (instead of the usual 1%) for buying the smaller flat. He is most UNLIKELY willing to sell an executive flat, which is highly priced, at a 0.5% commission compared to the usual 2%.

example : 1% of a small flat say 300k = 3k

0.5% = 1.5k ---> u save 1.5k, agent earns 1.5k lesser

2% of executive flat say 500k (very conservative here) = 10k

0.5% = 2.5k ---> u save 7.5k, agent earn 7.5k lesser

which do u think it's a likely scenario?

You can counter offer : tell the agent, i let u handle both selling and buying, but i pay u 1% for both selling and buying. U calculate,

sure save more. He dont want to do, NEXT. Market so many agents, sure got 1 willing to do.

2. Unlikely, but maybe this agent focus on turnover than profit margin. He is willing to selling your flat at 0.5% instead of 2%, but most probably will want you to assign him the buying job at 1%. If this is true, snap the offer. However, if this is really the case, be cautious. There are rogue agents who prey on un-informed customers, especially the elderly. I know a colleague who sold aa Executive flat half a year ago without any COV!!!!!! And she still praise her agent very hardworking, highly recommended. PUI !!!! That agent must have told the buyer "hey! i got an EA, i can help u buy at value price WITHOUT COV but instead of 1% buying commission, u pay me 2%, ok?" If i am the buyer, i sure snap the offer. So what happen, buyer got it cheaper than market rate, agent earn 2% from selling AND 2% from buying of an EXECUTIVE FLAT, my poor colleague still thought she got a good deal. She was trying to sell since Lehmen bro collapse, but unsuccessful. But the moment got willing buyer, she just let go, din know market stage a "V" shape recovery. But i din tell her the truth. Deal already done, no point make her gek sim. Sell flat still must fork out cash from saving to pay agent.

So bottomline is do your homework. Very simple one, just go HDB website check transacted prices around ur area, and add 10-20k to your asking price cos HDB transacted pirce history reflects prices were deal 3 to 6 months ago.

Good agents usually will be more concern, especially for elderly,

what happen after they sell the flat,

where are they staying, with kids or what

want to understand if currrent flat fully/partial paid so can buy a smaller unit at one shot without needing to take installment becos its hard for elderly

to take loan

After assessing its a possible job, then they make recommendations and then talk about commission last.

Rouge agent will want to know how much they can make first. If they are satisfied, they will have 101 ways to make sure the transaction goes can go thru.

Hope this help.

Edited May 23, 2010 by seek_a_home

[Plastic3 0]

Agree with seek_a_home

[bluelit3 0]

Thanks seek_a_home. That was very informative. Now I'm more aware on what are the 'traps' so that I can counter-react

[leechaorui 2]

My friend sold his place through an agent that charge her 0.7%. Transaction was smooth and she sold her flat for a fairly good price and the entire sale was very transparent.

Commission is negotiable between owner and agent. Owner has to give agent a chance to make a fair return and agents need to charge competitive comm to get the business.

[seek_a_home 0]

Thanks seek_a_home. That was very informative. Now I'm more aware on what are the 'traps' so that I can counter-react

no problem Buy and sell house is quite a tricky process. Important part is money management. Many people only focus on the affordability of the COV, but there are many hidden cost to it. By the time they realise, they need to take more loan/overdraft/cashline/readycredit...whatever there is available in the market.

[htng 1]

no problem Buy and sell house is quite a tricky process. Important part is money management. Many people only focus on the affordability of the COV, but there are many hidden cost to it. By the time they realise, they need to take more loan/overdraft/cashline/readycredit...whatever there is available in the market.

I always believe give peanuts, get clowns...

Same..If you really steady, why ask for less. Like a job, if you are desperate, you ask for less pay..I got people who recommend cheap contractors. They do one time ok, then people keep praising them, in the end problem happen.

Just read forum lah...Lots of such cases. Never skimp....

[Warrior88 0]

1% , 2% agent comm also got problem.

0.5% , why not, if $600k, got 3k comm.

Sometimes, client recommend client.

Undercut is good for for consumer, I think it is high time for agent comm to go down.

Sometimes agent can even waive GST of of goodwill, especially if agent is your

relative or good friend.

[htng 1]

1% , 2% agent comm also got problem.

0.5% , why not, if $600k, got 3k comm.

Sometimes, client recommend client.

Undercut is good for for consumer, I think it is high time for agent comm to go down.

Sometimes agent can even waive GST of of goodwill, especially if agent is your

relative or good friend.

I am worry about dealing with friends because of some emotion involve:

1) I bought my 1st insurance from my friend, until today, didn't really see her

2) my parents sold their flat using my aunt's friend. That guy ask for more commission.

3) my 1st contractor is my relative's friend. Years after my reno, I realize he gave a commission to my relative.

[Warrior88 0]

I am worry about dealing with friends because of some emotion involve:

1) I bought my 1st insurance from my friend, until today, didn't really see her

2) my parents sold their flat using my aunt's friend. That guy ask for more commission.

3) my 1st contractor is my relative's friend. Years after my reno, I realize he gave a commission to my relative.

My hse rental done by my sister in law, absorb my GST, get someone to clean my hse, and rectify some defective installation. all FOC

My ID from college wife, after standard quote, straight away give discount. ( not mark up then down type) Finally, actually paiseh, never do all, so actually cheap liao. Somemore, I keep changing plan,

still not angry.

But, my friend remover, quote me high, so I use outside remover cos cheaper.

Heng Suay one lah