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Dear Guru, What is the standard practice for commission given to agent? I heard that new laws is such that both parties (owner & tenant) have to be represented by own agent. Am i right? If so, then how much are they paid? Eg. rental lease of 1 yr and 2 yrs. Appreciate your advice!
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2 Answers

Mike Lim
Replied
Morning Jess,

Under the Free Trade guideline, there should not be a fixed rate to the commission chargeable. This guideline have being in place long ago. Very few agents are practicing it though.

FYI.
Mike Lim
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  • JP
    Replied
    thanks Mike! I was told by my agent that because there are too many unethical agents last time who spoiled the market by lowering their commission to less than 1mth for 1yr lease (standard practice) so that landlord/tenant will engage them as agents. thats why now CEA is very strict with this and wanted all agents to follow this ruling to collect 1mth for 1yr lease. but i was surprise u mentioned there should not be a fix rate to the commission chargeable and has been in place long ago. very disappointed with my agent
Ander Ang
Replied
Hi Jess,

The market practice is 0.5 mth comm per 1 year lease. It applies to both landlord and tenant side.

Landlord and tenant do not need to be represented by agent. The new rule only states that agent cannot represent both landlord and tenant and cannot take commission from both sides.

For example, i am serving the landlord and a direct tenant comes to me and we close the deal. I take the comm from my landlord (whom i represent). The direct tenant does not need to pay comm to me, and also does not need an agent.

Hope that answers your question.

Thanks,
Ander ERA
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  • JP
    Replied
    thanks Ander for your prompt reply. Im not sure why my agent told me i will have to give her 1mth for 1 yr lease and 2mth for 2 yrs lease! and since u mentioned it's market practice. From your example in 1yr lease, am i right to say, if both side represented by an agent, then landlord will receive 1mth deposit and 1mth advance rental from tenant right? then landlord will pay 0.5mth to her representing agent and tenant will pay 0.5mth to their representing agent as well? or tenant agent will share with landlord agent the 0.5mth?

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