When is commission payable and what are the market standard practices?


According to the Council of Estate Agencies, commission is negotiable; but just when is commission payable and what are the market standard practices? Sellers and landlords understand that when they engage an agent to market their properties, a fee is involved. However, tenants and buyers are sometimes confused due to varying standards in the market. Today this article looks are what the norms are.




Whether or not a tenant needs to pay his agent depends on various factors such as the rental amount of the property they are leasing and their lease terms. Of course, there may be circumstances where tenants have special requirements and agree to pay their agents regardless of these factors. If you would like to find out more about why you should use and agent, click HERE. You will be required to pay if:


  • You are going for one year lease
  • Your rental amount is below $3500 to $4000. This amount varies from agent to agent.
  • You are looking for a HDB unit


Let’s explain why this is so.


An agent serving the tenant gets paid when the listing/landlord’s agent cobrokes his property and shares his commission. When the amount gets too small to split, most agents are unwilling to share and tenants will be required to pay for the agent’s service.


Two Year’s Lease

A listing agent typically charges the landlord one month’s commission for a two-year lease in return for marketing his place, and sometimes for managing the property during the term of the lease. If the rental amount is reasonable, most agents are happy to share the commission.


One Year’s Lease

The landlord pays half a month’s lease for a one-year lease. Usually the amount is too small to split as agents have to incur costs when marketing the units for rent and there is no saying how many viewings are required to secure a tenant for the property.


HDB units

For HDB (public housing) units, most times the rental amount is low, hence tenants do have to pay their agents. Even when the amount reaches $3500, most listing/landlord’s agents are not eager to share the commission due to the market practice.




If you are purchasing a developer’s unit, there is no charge for securing a purchase on your behalf. However, you will be required to pay if:


  • You are buying a HDB property
  • You are buying a private property with low quantum


HDB buyers typically pay their agents 1% for the entire process of consultation, working out their financial calculations, arranging viewings, negotiation and finally attending the HDB appointment with their clients.


Private resale property buyers are in a trickier position. There are no hard and fast rules about whether they have to pay their agent for the purchase of a private property.


It largely depends on the agreement between them and their agents. Buyers may agree to pay in such circumstances – their purchase price is low, their benefits from engaging a highly-skilled agent justifies the commission, their agents have expended an inordinate amount of time during the search for the right property, or they may be looking for a highly specialized niche property.


If you are wondering why you need to engage an agent in the first place, do read HomeReward’s article on this topic.