Commissions earned by real estate agencies up sharply in 2007

Commissions earned by real estate agencies have gone up sharply, by as much as 80 percent, according to one agency.

Market watchers said that is not surprising, given the hike in property prices and number of transactions.

As a result, the industry is also attracting more agents.

Three days into the new year and real estate agency Propnex is already training 200 agents who have entered its fold. About half are new to the industry, but some are returnees.

Industry players said the renewed interest is not surprising. Some real estate agents have seen their income double in the last year.

At Propnex, about 100 agents earned more than S$200,000 each in commission.

Jenny Lee, real estate agent, Propnex, said: “Last year was one of the best years that I had in my nine years in this industry. Generally, all my clients whom I met along the way for the past 12 months, they are in fact very different from those many years ago.

“They are more informed, updated and intelligent. That’s why it actually makes selling and buying easier and faster compared to many years ago.”

More sophisticated clients are one reason why Propnex believes in training its people at an intensive weekend bootcamp.

Agents said last year was a good year because prices rose to healthy levels. Sellers stand to profit, and buyers believe there is further upside.

For HDB resale flats, more are willing to pay cash above valuation for good units.

Terence Low, real estate agent, Propnex, said: “Nowadays, if it’s HDB properties near to the MRT station or major amenities, people could be asking as high as S$50,000 or S$60,000 on average.

“Of course, we’re seeing people asking for S$120,000 above valuation; for the buyers to come along to pay this price, I think we have to really wait for somebody cash rich.”

However, as another agent would testify, that wait may be much shorter than expected.

Ms Lee said: “One of the deals that I closed in the month of October… it was a 28-year-old HDB jumbo (flat) in Ang Mo Kio, and the price that I transacted was actually S$140,000 above valuation.

“It was closed within 30 minutes during my open house. And these are actually HDB dwellers who want to upgrade. They want the space, but they don’t want to pay so much for a condo.”

A jumbo flat refers to two adjoining three-room flats converted into a single unit.

Over at another leading real estate agency, ERA, commissions as a whole more than doubled in 2007. – CNA/ms

Source : Channel NewsAsia – 4 Jan 2008

COMMENTS