Choosing A Property Agent With Lower Commission: Is It The Best Choice?

10 Aug 21

Is lower the better when engaging a property agent in Singapore?

One of the main concerns, be it among buyers or sellers, is the commission received by their property agent in Singapore. Often, their instinct is to choose a property agent based on lower commissions, as they feel it means paying less. In practice however, picking a property agent purely based on commissions can end up costing even more.

Here are some important factors to consider:

  • Slow transactions can be a bigger cost factor than commissions
  • Good agents can more than make up for their commission
  • Top property agents provide advice, not just information
  • An agent who fixes the problem is more valuable than an agent who is cheap


1. Slow transactions can be a bigger cost factor than commissions

Most sellers don’t have all the time in the world to sell their property. The longer your home sits on the market, the greater the costs you might incur.

For example, consider if you have just upgraded from your old condo, into a larger one. You bought the new condo before selling the previous home, as you needed to move in immediately.

This would incur an Additional Buyers Stamp Duty (ABSD) of 12 per cent, which is remissible within six months. On a $1.5 million home, this is $180,000.

To get this back, you need to sell your previous home within six months. You choose to use a property agent (or multiple agents, with no exclusive agreement), going for the lowest service fee. After four or five months, your previous home remains unsold.

At this point, which makes more sense:

Option A: Continue to count on agents who charge a bit less, and risk losing $180,000.

Option B: Switch to the agent who charges a usual service fee, and get back your $180,000.

Based on the above example, you will stand to lose much more, by trying to save a small amount on agent commissions.

Besides this example, you also need to consider other factors from leaving your property on the market too long, such as:

  • More “low ball” offers, as buyers notice the long time your home has been on the market, and begin to suspect problems with the house
  • Loss of opportunity to upgrade, because you can’t move your property
  • Continuing to pay the home loan (with interest) and taxes, despite urgently needing to right-size for financial reasons

Often, all these negative factors can outweigh the savings of a lower commission. You should always consider an agent’s range of prospective buyers, and the speed at which they can close the deal, rather than just their service fee.


2. Good agents can more than make up for their commission

Would you be willing to pay, say, one per cent more in commissions, if your home manages to sell for 10 per cent more? I’m sure most people will agree that this is a deal worth taking.

Besides a speedy transaction, this is the main reason why some clients are willing to pay a higher service fee. They know that the better agents will more than make up for the slightly higher commission.

Good property agents manage to sell your home for more, because they go beyond listing the property. For example: like many property agents, I also market properties on major portals, such as PropertyGuru, SRX, Edgeprop, and others.

Beyond the listing however, I also ensure that my property listings:

  • Get professional photo shoots, which is worth the expense as it makes your home “pop” among the other listings
  • Get video introductions that I link on Facebook, put up on YouTube, etc. This was especially useful during the Circuit Breaker period this year; it ensured I could continue marketing even when viewings weren’t allowed (and it’s especially important to get the attention of overseas buyers)
  • Home staging, such as the use of proper lighting, arrangements, cleaning, etc. to make sure your home is at its best.
  • I also provide guidance on home improvement options that are cost-effective, and improve the saleability (or sale price) of the property; this comes from my background in construction and as a contractor.

Good agents put significant marketing spend behind their client’s listing; they actively seek buyers. Agents who charge less tend to be more passive; they’ll put up your listing, but respond only as-and-when someone calls.

As a recent example of this, I managed to transact a property at Bishan Park Condominium at a record price of $165,000 higher than the previous sale.

This isn’t to say that every listing gets record-breaking prices of course; but dedicated agents can better see the full potential of a property, and can find the right buyer to market it to.


3. Top property agents provide advice, not just information

Almost every property agent – regardless of their service fees – can provide information. An agent who charges a lower commission has as much data on prices, sales volumes, etc. as an agent who charges more. So where’s the difference?

Top property agents, who charge a little more, can also provide advice. For example, rather than just tell you how much to set aside, they can help you to work out if it’s better to buy your new home before you sell or vice versa (or to do it in-contra).

They can also help you work through the timeline, thus minimising other costs such as rental as you might need somewhere to stay if your new condo is still being built. Sometimes this can be avoided with your agent’s help.

For agents with lower commissions, the service is usually more “hands-off”. They can help to list your property and oversee the transaction, but little else. They’re not likely to take the time to offer alternatives, help review your long term property plans, etc.


4. An agent who fixes the problem is more valuable than an agent who’s cheap

Wise home buyers and investors pick property agents who solve their problem, not simply the ones who charge lower commissions.

There’s no point in having an agent who charges less, but cannot close the deal on your house.

This is especially true in the cases of property that’s a tough sell, such as older condos or HDB flats, or homes that have stayed on the market for half a year or more.

Ultimately, being able to offload the property at a good price – in reasonable time – is what you’re paying for. If an agent can’t do this, then what does it matter if they charge two per cent or even one percent? It doesn’t fix the problem.

Just as you would consider more than one facet of a property, you should also consider more than one facet of a property agent

When you’re choosing a property, you wouldn’t just look at its price tag to the exclusion of all else. You need to consider its history, its amenities, its potential for growth, whether it fits your lifestyle, etc. You wouldn’t just look at the price per square foot, and ignore everything else.

In the same vein, don’t just focus on the lowest commission when picking your property agent. Consider the other elements they bring to the table, and choose on a more holistic basis.

If you have any questions about how commissions work, or need property advice, you can contact me by filling up the form below. You can also follow me on, to keep up with the latest news on the property market.

Like what you are seeing?
Contact me for more information!

contact me

I am here to help with all your real estate needs and questions.
Let me know what's on your mind and start a conversation.

    Open chat