If you are looking to sell your home or search for one through a property agent, protect your interests by using one of the Council for Estate Agencies’ (CEA) prescribed estate agency agreements.
The agreement formalises the contract between yourself and the property agency that the agent represents. It sets out the agent’s scope and duties, as well as the terms and conditions involved when the agent acts for you.
CEA’s prescribed estate agency agreements are binding, and there are two types of agreements:
- Exclusive agreements: You appoint only one property agency during the validity period of up to three months
- Non-exclusive agreements: You appoint a few property agencies to help you in your transaction
You can choose the type of agreement to use, depending on your needs and preferences.
The agreement protects the interests of both you, the consumer, and the property agency. It provides the following details.
i) Commission amount and conditions of payment
Commission rates are not fixed; there is no minimum nor maximum percentage, nor “standard market rate”. You should negotiate, agree on, and document the commission rate in this agreement before your agent starts work. If Goods and Services Tax is levied on the commission, your agent should reflect this in the agreement as well.
Do remember to pay the commission to the agency, not the agent, only when the transaction is completed.
The prescribed agreement also sets out various scenarios of when the commission is payable.
For instance, it states that you are not obliged to pay commission to the agency if the transaction falls through without any fault on your part.
If you have signed an exclusive agreement, the agreement will state that you will be liable to pay commission:
- during the validity period even if you sell or buy the property through another agency or completed the transaction on your own, and
- within three months after the validity period if the property is transacted with a party introduced by your appointed agency during the validity period.
ii) Duties of the property agency and agent’s duties
The agreement should provide a clear idea of what the property agency and agent are supposed to do when facilitating your sale or purchase transaction.
iii) Any potential conflict of interest
The property agency and agent must declare to you in this agreement whether there is any potential conflict of interest ahead of the transaction.
By signing CEA’s prescribed EAAs, you will be able to use CEA’s Dispute Resolution Scheme if you encounter any contractual disputes with your property agency and agent. You can choose to go for mediation or arbitration through centres approved by CEA.
While the prescribed estate agency agreements help to protect your interests, the Customer’s Particulars Form helps to protect Singapore’s interests. Do your part by filling in this mandatory form, which is one of the measures agents must take to prevent money laundering and counter-terrorism financing in Singapore. Your agent will provide you with the form. Fill in your particulars, sign it, and hand it back to your agent.
To get more tips on protecting your interests when working with your property agent, visit www.cea.gov.sg/happyconsumer.