{"id":120189,"date":"2021-02-05T02:43:16","date_gmt":"2021-02-04T19:43:16","guid":{"rendered":"http:\/\/www.siamlandbank.com\/propertynews\/property-news\/ura-probes-into-agents-commission-rates\/"},"modified":"2021-02-05T11:11:58","modified_gmt":"2021-02-05T04:11:58","slug":"ura-probes-into-agents-commission-rates","status":"publish","type":"post","link":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/ura-probes-into-agents-commission-rates\/","title":{"rendered":"URA probes into agents\u2019 commission rates"},"content":{"rendered":"


\nURA probes into agents\u2019 commission ratesThe move comes amid a hike in commissions as well as market speculation of new\u00a0cooling measures\u00a0as residential property prices continue to increase despite economic woes.
\nThe Urban Redevelopment Authority (URA) has queried housing developers on the latest commission rates they pay property agents to market new private homes in Singapore, reported The Business Times (BT) citing industry participants.
\nThe move comes amid a hike in commissions as well as market speculation of new cooling measures as residential property prices continue to increase despite economic woes.
\nDevelopers usually pay agents commissions of 1% to 3% of the transaction price. The commissions can go up to 5% to clear slow moving projects. Developers have to complete a project and sell all units within five years for them to qualify for upfront remission of the Additional Buyer\u2019s Stamp Duty (ABSD) on the land purchase price.
\nHigher commissions of 8% to 10% may be offered for \u201cspecial\u201d units like penthouses or houses with odd-shaped lots since they tend to be less popular among buyers, noted BT.
\nRecommended article:\u00a0Property Owner\u2019s Dilemma: How Much Should I Pay My Estate Agent?
\nFatter commissions may also be given if agents achieve a higher sale price above a certain tier, particularly for luxury homes.
\nIn responding to BT\u2019s queries, a spokesperson for URA said they \u201cdo not regulate the commission rates paid by developers to their appointed sales agent. As part of our monitoring of the property market, we engage developers regularly to obtain information and provide feedback\u201d.
\nThe Council for Estate Agencies\u2019 (CEA) website stated that commission rates are determined by market forces.
\nHowever, one market participant suggested imposing a cap on commission rates to help level the playing field, said BT.
\nTheoretically, placing a cap can improve market transparency, while benefitting both buyers and developers, said Lee Nai Jia, Deputy Director of the Institute of Real Estate and Urban Studies at the National University of Singapore.
\n\u201cDevelopers can better estimate their costs if there\u2019s a limit on commissions, unlike the current situation which may lead to a race to the top for commissions especially if a few projects are launched at the same time,\u201d he said as quoted by BT.
\nMoreover, capping commissions provide agents less room to offer kickbacks. Some agents offer a portion of their high commissions to buyers indirectly. Such payments, which may be disguised as \u201creferral fees\u201d or \u201ccash back\u201d via the buyer\u2019s relative or friend, go against CEA guidelines.
\nSee also:\u00a03 Times Property Agents in Singapore Broke the Rules (And What You Can Do)
\nThis essentially inflates sale prices, causing distortions in the private housing market. Commissions are included under the cost of sales of developers, hence, do not affect headline prices that are reported by developers to the URA. The reported prices are used by URA to determine the private home price index.
\nWith the cap, buyers will have a more accurate picture of market conditions, said Lee.
\nHe acknowledge, however, that it will not entirely solve the problem since the full extent of the kickbacks remain unknown and the errant agents are not identified. It is also hard to monitor all channels used by errant agents and sellers to bypass a cap.
\nAs such, Lee suggested incentivising the buyers to disclose the kickbacks.
\nSuggested read:\u00a0Being a Property Agent: 4 Surprising Things You Might Not Know
\nEugene Lim, Key Executive Officer at ERA Realty, believes there is no need for a cap since majority of commissions remain at \u201cstandard rates\u201d due to the property agency business\u2019 competitive nature.
\nEchoing his sentiments, RHB Analyst Vijay Natarajan said it may be best to leave agent incentives to market forces.
\nAlan Cheong, Executive Director of Research and Consultancy at Savills Singapore, does not expect regulations targeted at agents to have a significant cooling effect on the market.
\n\u201cThere\u2019s only so much agents can do to fan demand. If sentiments are negative, purchases will be unlikely no matter how much the agents spin a positive story, and vice versa,\u201d he said as quoted by BT.
\nLooking for a property in Singapore? Visit PropertyGuru\u2019s Listings, Project Reviews and Guides.
\n
\nSource : proppertyguru.com.sg\/Property Market
\nRead more…URA probes into agents\u2019 commission rates<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

URA probes into agents\u2019 commission ratesThe move comes amid a hike in commissions as well...<\/p>\n","protected":false},"author":1,"featured_media":120190,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true},"categories":[1],"tags":[],"class_list":["post-120189","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-property-news"],"jetpack_featured_media_url":"https:\/\/i1.wp.com\/www.siamlandbank.com\/propertynews\/wp-content\/uploads\/2021\/02\/property-agent-house-and-keys.jpg?fit=820%2C410&ssl=1","jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p75ss1-vgx","jetpack-related-posts":[{"id":70174,"url":"https:\/\/www.siamlandbank.com\/propertynews\/property-news\/speculation-abounds-on-uras-request-for-collective-sale-details\/","url_meta":{"origin":120189,"position":0},"title":"Speculation abounds on URA\u2019s request for collective sale details","date":"October 27, 2017","format":false,"excerpt":"\r The property market is rife with speculation on why the Urban Redevelopment Authority (URA) is requiring property agents marketing en bloc sales to submit detailed information on the tender results, reported the Business Times. 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Despite last year\u2019s property cooling measures, Edmund Tie and Company expects residential property prices to remain relatively stable.\u00a0 Prior to the latest cooling\u2026","rel":"","context":"In "Property News"","img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/120189"}],"collection":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/comments?post=120189"}],"version-history":[{"count":0,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/posts\/120189\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/media\/120190"}],"wp:attachment":[{"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/media?parent=120189"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/categories?post=120189"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.siamlandbank.com\/propertynews\/wp-json\/wp\/v2\/tags?post=120189"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}