When the property market cools, developers' creative juices start to flow. To boost sale they have come up with all sort of ways to pique buying interest. It ranges from the most straightforward of dangling discounts at buyers to providing rental guarantees for retail spaces; now they have moved up further in the marketing chain to target property agents.
Some recent development launches have seen developers offering up to 3% in commission to these ubiquitous middlemen, up from the usual 1%.
Projects like La Fiesta, Urban Vista and Sant Ritz provide agents with a 3% commission.
Whereas the popular condominum project, Thomson Three, has 1.25% for both co-brokering agents. Mixed development Kensington Square at Upper Paya Lebar has a co-brokering rate of 1.5% to 2%.
Co-brokering agents usually earn 0.5% commission only.
Upcoming Liv on Wikie is expected to offer a 2% rate.
Developers are probably offering more to compensate agents for extra efforts to find buyers. With the slew of regulatory changes, buyers are shying away from property, as a result agents may have to put in more effort at promotion including spending more in advertising. The higher commission will help to defray these costs.
At any rate, agents are facing a more difficult time. Even with the higher commission, they have to go the extra mile to clinch sales in the slowing market.
In addition, since 1 January 2011 all agents must be registered with the Council for Estate Agencies (CEA) via their estate agency. To be registered they must have passed the Real Estate Salesperson (RES) examination or equivalent, and meet other criteria.
Apart from having to meet higher professional standards and face falling sales, a small proportion of agents is also directly impacted by the cooling measures. These agents speculate in property investments to augment their incomes but now they have to tone down on such activites as the measures have it harder.
With the real estate market slowing, what better time to buy a property than now? A PropertyBuyer mortgage consultant can help you compare Singapore home loans and sort out your finances - at zero cost to you.
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