AN EXAMINATION OF REAL ESTATE AGENT'S REMUNERATION

Abstract

The profession of real estate agent started as early as in the 1970's when Singapore economy experienced the boom and people began to have higher aspirations in terms of bigger and better property. These aspirations generated a stream of economic benefits for all industries and numerous property transactions from the 1970's to 1990’s. Since then the trade of real estate agents has been flourishing even during the down times of the economy. The remuneration package for real estate agents back then was not based on any scale or standard guidelines, and most of the time it was purely negotiable and subject to agreement between both the clients and agents. It is only until the recent occurrence of many fraud cases and complaints involving the real estate agents and their clients in terms of the remuneration that resulted in the formation of certain governing bodies to regulate and control the profession and industry. It is, however, to some dismay that even with the setting up of the regulating bodies and the recommended commission guideline of 2% payable by seller and 1% payable by buyer, there are still occurrence of undesirable cases and problems. As the property market in Singapore is ever-changing, newer sets of problems will occur and it seems that the existing system cannot contain or alleviate the situation. This dissertation seeks to provide the general scenario of the remuneration practice and to discuss the problems arising from the current remuneration practice. Problems like "under-the-table money", "cash back" and poor and unethical services from real estate agents will be highlighted. It is hoped that with the exploration of the problems, factors affecting the real estate agents? remuneration structure will be revealed. It is hoped that with the revealed factors, it will assist the relevant authorities in the future formulation and recommendation of a better remuneration structure and an operating system for the real estate agency industry which will benefit both the agents and the clients.