Tuesday, September 12, 2006
[RealEdge] TodayOnline Forum : Dual commissions help make ends meet
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| Dual commissions help make ends meet Tuesday ? September 12, 2006 Letter from Yap Swee Hoo I refer to the brouhaha on the dual commissions for housing agents of HDB resale flats and reader Narayana Narayana's letter, "Huge anomaly, 50 years on" (Sept 7) on the contrasting sharp reduction of stockbroking commissions from 1 per cent previously to 0.4 per cent or less now. While buyers and sellers of HDB resale flats may fuss over the dual commissions payable to housing agents, the issue should be looked at more broadly with an appreciation of the housing agent's profession. It is not every day or month that a housing agent can close a property deal, despite his footwork, paperwork and whatever. Many housing agents have been known to languish for months without closing a property deal, for the tough market competition and the huge capital outlay involved in the purchase of a property. The majority make just enough for a decent living. Whereas a buyer or seller of an HDB resale flat pays only a one-off commission for a purchase or sale, the housing agent depends on the commission, irregular and uncertain as it is, to sustain a livelihood. It would, therefore, be inappropriate to cut back on the commissions just to placate some disgruntled property buyers or sellers who want to have their cake and eat it. On the possible conflict of interest for a housing agent to handle both the purchase and sale of a property, the two transactions are so closely inter-linked that a housing agent would be foolish to pass on a lead to another agent to be undercut by the latter. A key reason for the dual commissions is that HDB resale flats are relatively low-priced compared to private properties. If commission is paid only by the seller of an HDB resale flat, this may be insufficient to tide over a housing agent in the lean months. It is, therefore, essential that the bottomlines of the housing agents are taken into careful consideration before any step is taken to restrict their commission. | |
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// posted by Shajahan @ 8:54 AM 