Perks Of Being A Real Estate Agent And Important Points You Need To Take Note
It seems like real estate agents in Singapore have the best job. They are essentially their own bosses, possess the freedom to operate whenever they want, and can potentially earn five to six-figure commissions.
If they’re fortunate, they can even receive a million-dollar commission. In fact, one agent made a massive $1.5 million commission in mid-2015 after selling a $51 million penthouse.
With so many advantages that come with the job and the possibility to earn million-dollar commissions, it’s no wonder that a profession as a real estate agent in Singapore is highly sought after.
Unfortunately, not everything about the business is rosy.
So before you apply for a real estate agent license in Singapore, there are a few things you should understand first.
Real estate agents may not have income for months.
One of the biggest obstacles you may encounter as a real estate agent in Singapore is that you may not be able to close deals for months, so you will have no income during that time.
While you can earn a high commission from an individual sale, the industry follows a cyclical trend. This means that there may be seasons when many people are in a rush to buy homes and times when businesses are slow.
Aspiring real estate agents in Singapore should be conscious of the cyclical reality of Singapore’s property market.
Let’s take a look at the yearly transactions of new private homes in Singapore. From 2008 to 2012, recent private home sales (excluding executive condos) increased significantly from 14,904 units to 22,197 units per year.
But when the cooling measures took place in mid-2013, transaction volumes fell to 14,948 units. Then in 2014, sales plummeted by more than half to 7,316 units.
Although sales volume rebounded from 2015, it is still not as high as in previous years. Over the past five years, sales have averaged about 9,945 homes, which is still below the norm of 14,729 homes sold between 2007 and 2013.
While the above figures do not reflect the commission paid to estate agents from lettings and transactions for HDB resale flats and private resale properties, the sale of new private homes accounts for a significant portion of an estate agent’s wages.
Property Agent’s Salary Depends Solely to close deals
One of the most important perks of being a real estate agent in Singapore is that you get commissions from sales and rentals that typically exceed the monthly salary of an average job in the city-state. Yet, this also means that you may not enjoy a regular and steady income and only get paid when you close a deal.
Therefore, you may only earn more if you close a more significant quantity of real estate deals or close a smaller number of high-value sales, e.g. The $51 Million Condo Deal Le Nouvel Ardmore. This means that your salary is not fixed and can fluctuate from high to low.
While there are no black and white rates or guidelines on how much real estate agents in Singapore should be paid per closed deal, you can expect to get a 1.5% commission for successfully selling a house, as well as one month’s rent for every 2-year lease.
Let’s say you manage to sell four private condos at $900,000 each in a given year. At 1.5% commission on each deal, this means you will make $55,000 that year.
This translates to a monthly salary of about $4,323.33, which is not bad for a monthly pay, considering that it is higher than the median wage of $4,734 in Singapore in 2020.
But when you factor in the additional expenses you’ll have to incur to close transactions, that amount might not turn out to be so high… Not to mention that the Urban Redevelopment Authority (URA) is now looking into commission rates charged by real estate agents. There is a possibility that commission rates for real estate agents will go down soon.