Agent fee : who is right, me or my hubby?

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pomelostudio
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Agent fee : who is right, me or my hubby?

Post by pomelostudio » Tue, 19 Jul 2011 8:08 pm

my husband and I went to Singapore for a look/see visit, and also engaged an agent to show us around. ( just so we have a feel of the housing situation in Singapore).

one agent through friend's recommendation showed us 5-6 places within 2 days.

The places that we are interested was around $4800 per month which he said would be negotiable. ( he said down to about $4300). All of the condos we visited also had landlord's agent present.

Our budget was around $4500-$5000 per month. and would want a 2 year lease. This agent told us that he would charge 1 month rent for 2 year lease, 0.5 month for 1 year lease.

Me: look up the forum, and think that for a place over $2500, we shouldn't be paying any agent fees, especially when we want to sign up for 2 years.

Husband: this guy would act as a "buyer's agent" sort of thing, and negotiate for us and saving us money in the long run. He would rather pay him and get a good deal, rather than paying an inflated rent. agent is obviously working for commission, not working for free.

Me: yes, but according to the forum which I've been reading for quite awhile, for 2 yrs, usually the landlord need to pay, not us. I just don't want the agent to "double dip", and us being the idiot.

Husband: my friend who recommended him also paid a fee as well, so this is common in singapore.

My question is:
1. when you first arrived Singapore, how many properties did you look at before you found "the one", how long did that take you?
2. did you pay your agent?
3. did your agent negotiate the rent on your behave, if so, how much less?
4. who is right? me or my hubby? -- should we keep the agent or find someone else?

thank you for your help.

Singapore Property Search

 

cxxx
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Post by cxxx » Tue, 19 Jul 2011 8:25 pm

Im not sure who is legally/contractually correct but here is my experience:-

1 - I viewed at least 10 apartments with the one agent over the space of a week (agent appointed by partners employer)

2- we/employers did not pay the agent (LL did)

3 - yes she negotiated the rent and furniture, from memory from 5k unfurnished to 4.7k furnished

4 - no idea who's actually right but I had though tenant fees were only applicable under a rent of 3k

Good luck with your search!

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Post by x9200 » Tue, 19 Jul 2011 9:00 pm

@pomelostudio, legally your husband is right after the change to the law that happened last year but IIRC it is also required from the agent to sign an agreement with you before (s)he starts to do anything. More over it is still related to the rental so no motivation for the agents to negotiate down the price.
Practically I expect many agents will still follow the old 2500/3000 rule and if rental is above that share the commission payed solely by the LL.

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Post by BillyB » Tue, 19 Jul 2011 9:18 pm

- Norm for a 2 year rental is the landlord pays even on a co-broke. The landlords agent simply splits the commission with your agent as an introducer fee.

- 1 year can also be negotiated - usually only if the agent is working direct for the landlord, and you do some of the sourcing work, and they only turn up to let you have a look around the unit. but this can vary hugely. Some agents will make the decision to refuse a 1 year deal, often without consent of the landlord, because it halves the commission they make.

In your case its slightly different. If your agent is under the impression he is working for you, you need to make it crystal clear from the outset that you aren't going to pay them. As a remedy in your case, act naive and say you thought it was part of the service!! If it becomes an issue, walk away. Then simply use the property sites to search for similar units in the same condo and approach the agents looking after those and ask if its a co-broke or not. A bit sneaky, yes, but the agents here will shaft you nine times out of ten given half the chance.

P.S. Don't buy into all the benefits they say they bring to the table. It's not in their interests to negotiate a lower price as it reduces their commission. They add very little value on a co-broke, other than being able to make a few phone calls and set-up appointments. A few hours of research on the property sites - including the condo overview on this site - will provide you with the information you need to do most of the legwork yourselves.

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Post by Mad Scientist » Wed, 20 Jul 2011 4:17 am

Read this to get more understanding

http://www.cea.gov.sg/cea/content/estat ... smain.html
The positive thinker sees the invisible, feels the intangible, and achieves the impossible.Yahoo !!!

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Post by pomelostudio » Thu, 21 Jul 2011 7:52 pm

Thank you everyone for the valuable information. I guess I won't be counting on the agent to negotiate the price down for us.

Husband tends to think that the landlord would put the price up in anticipation for the commission that he/she has to pay, and if we pay the agent fee up front, there will be more room for negotiation in terms of rent.

I tend to think that there is no guarantee ( depends on how long the place is vacant...etc , lots of other factors) for the rent to come down even if we pay ( agent fee)

Husband also going first, 2-3 wks each time, til end of the year. Hopefully he can find out how the "system" works a bit better.

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Post by x9200 » Thu, 21 Jul 2011 8:14 pm

pomelostudio wrote:Thank you everyone for the valuable information. I guess I won't be counting on the agent to negotiate the price down for us.

You actually may count on this but it is some kind of delicate balance between how much time the agent wants to spend driving you around and willingness to get a lower commission. After all if the price is too high you may say No! and the quests starts over again from scratch.

Husband tends to think that the landlord would put the price up in anticipation for the commission that he/she has to pay, and if we pay the agent fee up front, there will be more room for negotiation in terms of rent.

I tend to think that there is no guarantee ( depends on how long the place is vacant...etc , lots of other factors) for the rent to come down even if we pay ( agent fee)

Yes, there is no guaranty. You have here an impressive mixture of people. Some acting very reasonably some like lunatics ready to lose 20k keeping the flat vacant rather then lowering down the rental by $S100.


Husband also going first, 2-3 wks each time, til end of the year. Hopefully he can find out how the "system" works a bit better.

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Post by Saint » Fri, 22 Jul 2011 12:23 pm

Landlord pays agents commission full stop. As the agents are co-broking they need to share the commission.

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Post by Saint » Fri, 22 Jul 2011 12:27 pm

And just to add yo what Billy mentioned. I always make it clear to the agent that he/she isn't acting on behalf of me but the Landlord and I will not be paying any commission.

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Post by x9200 » Fri, 22 Jul 2011 12:32 pm

Only if the agent represents the landlord only. If the agents represents the tenant this would be illegal.
http://www.cea.gov.sg/cea/content/resou ... aqInfo.htm

Q46. My client is the buyer/tenant. As my client does not pay commission to me, can I collect the commission from the seller/landlord when the deal is closed?
A46. No, it will be a case of dual representation as a salesperson can only act for one party in a property transaction and can only collect commission from the party he acted for.

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Post by ausinsg » Fri, 22 Jul 2011 5:17 pm

The rules brought in last year, were meant to enforce ethical behaviour which good agents followed anyway. The ruling is that a salesperson cannot represent both parties in a transaction, and cannot collect money from both parties in a transaction.

The confusing part is that the legislation refers to agency/agent meaning the real estate business. Sales person is the term used for the individual which we all commonly refer to as the agent!

So whilst the salesperson cannot represent both a landlord and a tenant, if they get a direct inquiry from an internet ad, the sales person can ask their colleague to represent the tenant, and they continue to represent the landlord. That is legal. One agency, but separate individuals who should be showing professional conduct to represent the client to the best of their abilities.

Typically if the tenant has a salesperson (agent) representing them, that agent expects to co-broke the commission the landlord's salesperson (agent) receives. The landlord's agent will normally say at the outset if they co-broke or not. If they don't there is a good chance you will never be shown the place.

If you do agree to pay a fee for the property search to your salesperson, it is illegal for them to accept any money from the landlord's agent in a co-broke deal. You cannot accept money from both sides of the transaction.

Good luck finding a place you like. :)

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Post by nismavrik » Thu, 09 Feb 2012 4:04 pm

Hi
I was not able to find the official link on the cea govt website. It will be awesome if you could point me to the correct link for 2500/3000 rule.

Thanks and have a nice day !

Cheers
nismavrik
x9200 wrote:@pomelostudio, legally your husband is right after the change to the law that happened last year but IIRC it is also required from the agent to sign an agreement with you before (s)he starts to do anything. More over it is still related to the rental so no motivation for the agents to negotiate down the price.
Practically I expect many agents will still follow the old 2500/3000 rule and if rental is above that share the commission payed solely by the LL.

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Post by zzm9980 » Thu, 09 Feb 2012 5:17 pm

nismavrik wrote:Hi
I was not able to find the official link on the cea govt website. It will be awesome if you could point me to the correct link for 2500/3000 rule.

Thanks and have a nice day !

Cheers
nismavrik
x9200 wrote:@pomelostudio, legally your husband is right after the change to the law that happened last year but IIRC it is also required from the agent to sign an agreement with you before (s)he starts to do anything. More over it is still related to the rental so no motivation for the agents to negotiate down the price.
Practically I expect many agents will still follow the old 2500/3000 rule and if rental is above that share the commission payed solely by the LL.
The 2500/3000 "rule" isn't a law, and thus won't be on that site. It is just the adhoc standard agents generally push.

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Post by beppi » Thu, 09 Feb 2012 5:49 pm

I think I sound like a broken record, as I have posted this several times before (the forum has a SEARCH function!!!):

There is no S$2500/3000 rule. In fact, such an arrangement (which was common 10 or more years ago) would now be illegal!

The agent's fee is always paid by the one (and only) party who engaged him/her. If a landlord asks an agent to advertise and find a tenant, landlord pays. If a prospective tenant asks an agent to find a place, tenant pays.
In the OP's case it is clearly the tenant who engaged, so he needs to pay.
But if you reply to an ad and an agent answers, you need not pay him.

In addition, there is no rule for the height of the fee - everything is up to negotiation (and preferably written agreement beforehand).
I personally think a tenant's agent paid according to the monthly rent is counter-intuitive (he/she has no motivation to negotiate well!) and should be avoided. A fixed fee makes more sense in my eyes.

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Post by zzm9980 » Thu, 09 Feb 2012 8:00 pm

If I were to use an agent again (which I wouldn't), I'd actually even try for something inverse. Tell them my budget is X/month, I'll pay them $1000, plus a dollar under dollar X my rent is. Of couse only if I liked the unit. Hell, I'd maybe even tell them 2 to 1 to motivate them. :)

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