Commission for Tenant Agent

[koukanamiya]

Dear all, I'm having some challenges finding a place to rent and dealing with my agent. I am currently still looking for an apartment and I have been told by my agent that this is how commission works for tenant agents in Singapore:

- If signing 1 year lease: I pay agent 0.5 of month's rental if monthly rental is less than SGD 4000
- If signing 2 years lease: I pay agent 1 month rental and the landlord 2 months rental up front

I am a bit confused about this because I was told that generally the tenant agent and the landlord agent co-broke so they split the commission. In addition, I was also told that if I sign 2 year lease, I do not need to pay a whole month's rent as commission to the agent.

Any help in this will be greatly appreciated as I feel like I'm being taken for a ride.

[sundaymorningstaple]

Do a search of this forum, it's been discussed many times.

http://forum.singaporeexpats.com/ftopic60579.html

[sammone40]

Agreed with the comission structure - However if you go directly to the landlord's agent no need to pay squat

[koukanamiya]

Do a search of this forum, it's been discussed many times.

http://forum.singaporeexpats.com/ftopic60579.html

Thanks, have reposted there.

Have heard from several folks that if I'm signing two years and the lease amount is above $2500 (not $4000), I don't need to pay commission. My lease is definitely above that. The only thing my agent supposedly did was negotiate and schedule. I found the apartment listings myself and gave her the list - did all the leg work myself ...

[sammone40]

hmmm did you agree to pay a fee to your agent before you started your search with them?

[Truely]

hi koukanamiya

What is mentioned about agent commission structure is generally correct but it is only a guide.

In the past , during "buyer's mkt' - many property agents squeezed commission only from the owner and not from tenant. This created a lopsided situation where tenant is the "king" but a very unhappy owner.

The new guide is that the commission is always a "negotiable" item for all parties. This hv created more opportunity for some property agent to confuse the market and these property agent will always play one against another and try to corner both tenant and owner into paying the commission by giving u/both a lot of funny stories.

The rental market have turned and generally a "seller mkt" now and there are more tenants looking for fewer good houses, the owner will rent out their house to the highest price offer. So when u view a house, do get to know the owner and his/her contact and try to decide fast if you can.

As tenant, pls don't be fooled by some agent and end up settled for unit not of your best choice but one that give the property agent his/her highest commission from both sides.

Deal direct with the hse owner if you can. U can find yr current house owner name in your hse lease agreement doc . Cut off middle man and let both Tenant and Owner save on property agent's commission.

[beppi]

Agent's fees are freely negotiable and anything you agree to is o.k., except if it contradicts the estate agents act (which says agents only get commission from the ONE party - tenant or landlord - who engaged them, and they must be licensed - check with CEA and don't pay anything if yours is not!).
Any rules about how much commission is due under which circumstances were abolished years ago, but many agents will still pretend this is not so, to make you agree to their terms. You should report such errant agents to the CEA (www.cea.gov.sg).

[x9200]

hi koukanamiya

What is mentioned about agent commission structure is generally correct but it is only a guide.

In the past , during "buyer's mkt' - many property agents squeezed commission only from the owner and not from tenant. This created a lopsided situation where tenant is the "king" but a very unhappy owner.

Whether the LL paid the commission was dependent on the rental. I wouldn't be surprise if the majority of the commission was paid actually by the tenants so your above statement is not really correct. The new law was introduced to prevent the same agent charging both parties, not to cheer up the LL.

The new guide is that the commission is always a "negotiable" item for all parties. This hv created more opportunity for some property agent to confuse the market and these property agent will always play one against another and try to corner both tenant and owner into paying the commission by giving u/both a lot of funny stories.

The rental market have turned and generally a "seller mkt" now and there are more tenants looking for fewer good houses, the owner will rent out their house to the highest price offer. So when u view a house, do get to know the owner and his/her contact and try to decide fast if you can.

So you are saying now the tenant pays and demands and this is the LLs market? As far as I can see from my experience it is exactly opposite. Now is the tenants market.

[rickjames]

It's not a 'rule'- just a guideline that they will try to get away with if you agree to it. There are plenty of other agents out there who will not charge this 'fee', just look around.

[sundaymadness]

why not go directly to home owners? there are many websites/forums in singapore where homeowners list their properties directly!.i think most IT-savvy homeowners would bypass property agents to save that few thousand dollars!

[luminoso]

Agreed with the comission structure - However if you go directly to the landlord's agent no need to pay squat

While this is generally true, alot of the time the agent will insist that it is a "co-broke" deal and that you need to engage an agent who the landlord's agent will 'refer'.

In other words he is just referring a friend and you will have to pay.

[beppi]

While this is generally true, alot of the time the agent will insist that it is a "co-broke" deal and that you need to engage an agent who the landlord's agent will 'refer'.

In other words he is just referring a friend and you will have to pay.

These crafty agents are good at finding ways to squeeze their customers, don't they?
Needless to say, this is against the rules and you should report such incidences to the IEA. If they work for a real estate company (like ERA), you might also want to report it to them.

[luminoso]

These crafty agents are good at finding ways to squeeze their customers, don't they?
Needless to say, this is against the rules and you should report such incidences to the IEA. If they work for a real estate company (like ERA), you might also want to report it to them.

What people might want to know is that prior to 2010, it was actually LEGAL for agents to practice what was then known as 'dual representation' which means the same agent representing both the landlord and the tenant.

I don't see how this could be even remotely conscionable, since the parties would naturally have a conflict of interest. This is like having the same lawyer represent both the plaintiff and the defendant in the same trial.

I mean, since the agent's commission is pegged to the rent and the duration of the lease, isn't it then in the agent's interest to NOT negotiate for a lower rent for the tenant, and to pressure the tenant into committing to a two year lease?

In 2010, new legislation (called the Estate Agents Act 2010) was passed to ban this messed up practice of dual representation and obviously alot of agents were affected. As a result, they still continue to practice dual representation but in a different guise.

What happens now is that you call up the landlord's agent, and he then tells you he can't represent you but his 'colleague' can, and he then advises you to engage his colleage to represent you. His colleague is just his buddy from the same company, he takes payment from you and the other guy takes payment from the landlord. Then they split the money in whatever way they deem fit.

This gets around the ban on dual representation but it's effectively the same thing, since the tenant's agent is just a puppet/nominee of the landlord's agent who is still effectively representing both sides of the deal - just that he isn't actually doing it on paper.

Crafty b*stards, the lot of them! Too bad Singapore doesn't have any established channels for landlords and tenants to deal directly... and I wonder why??

[beppi]

What happens now is that you call up the landlord's agent, and he then tells you he can't represent you but his 'colleague' can, and he then advises you to engage his colleage to represent you. His colleague is just his buddy from the same company, he takes payment from you and the other guy takes payment from the landlord. Then they split the money in whatever way they deem fit.

If the landlord's agent tells you to engage another agent or he won't deal with you, this is against the rules and should be reported to CEA (www.cea.gov.sg).

If this other agent is from the same company (e.g. ERA, PropNex or any of the other), then it is even illegal and should be reported to the authorities, since one company is not allowed to take commission from both sides. (The Estate Agent Act uses the word "Estate Agent" for such a company, not an individual person who is calles "Salesperson" in this law.)

[x9200]

CEA not IEA.