Having bought, sold and leased on both sides of the equator, we came up with this unique list of top 5 differences between property agents in Singapore and Melbourne, which we hope will be helpful.
Difference No. 1: The concept of co-broking between agents is practically unheard of in Melbourne.
In Melbourne property market, the real estate agent one who signs an exclusive authority with the seller (also known as vendor) to market the property for a fixed number of days (usually 90 or 120 days) is the one who will be paid a commission by the vendor.
Anyone who wishes to purchase the property has to contact the listing agent directly. The listing agent will not deal directly with other agents to sell the property.
As a result, real estate listings are highly coveted by agents and it is not uncommon to find flyers by real estate agents or to find them door knocking around the neighbourhood, hoping to find a property owner who wishes to sell their property.
Difference No. 2: Vendors pay for advertising costs
Vendors pay for advertising here in Melbourne. It is common for vendors to pay for advertising which include online listings with www.domain.com.au, www.realestate.com.au, etc., newspaper advertisements, flyers, brochures, etc.
Compare this to the situation in Singapore where the selling agent bears the cost of advertising as part of the cost of doing business.
One main downside to this arrangement in Melbourne is that the agent is not quite motivated to sell your property quickly since the costs are paid upfront by the vendor with no additional costs to the agent for any ad renewals. Another downside is that the agent actually uses advertisements to boost their agency’s profile under the guise of promoting properties for sale.
Difference No. 3: Buyers sometimes engage Buyers Agents
In Singapore, it’s not uncommon for property buyers to request property agents to help them find their dream home. Property agents in Singapore covet buyers as it’s their ticket to landing their half-share of commission from a co-broking selling agent.
In Melbourne, such property agents specialise in helping buyers land their dream home. They are known as buyers agents or buyers advocates. Their services include researching available homes both on the market and those off-market, accompanying their clients to view properties and negotiating the best price for the buyer or bidding at auctions on behalf of the buyer.
Difference No. 4: Landlords pay both leasing costs and property management fees
In Singapore, real estate agents are paid by landlords to find new tenants and to arrange for the lease agreement to be signed. Upon successfully securing a new tenant, the real estate agent is entitled to a commission which is usually half a month’s rent for each year of a fixed-term lease. So a 24-month fixed term lease means the agents earns a commission which is equivalent to one month’s rent.
In Melbourne, there are 2 separate components to the fees paid to real estate agents known as property managers. Besides the advertising fee (refer to difference no. 2 described above), property managers also charge a leasing fee which is equivalent to one week’s rent. There is also an ongoing fee which ranges from agency to agency, but is usually about 5.5% of the rental collected. The property manager collects monthly rent from the tenants, deducts his/her monthly property management fee and then deposits the balance into the landlord’s nominated bank account.
Difference No. 5: Rental deposits or bonds are held by a central body.
In Singapore, landlords typically hold deposits (usually 1 month deposit for each year of a fixed-term lease) and are able to deduct funds to compensate for damages at the end of the lease with very little recourse by the tenant.
In Melbourne, such deposits are known as bonds. Bonds for rental properties is held by a central body. In Melbourne/Victoria, this is the Residential Tenancies Bond Authority (RTBA), which is a statutory authority of the Government of Victoria, established by the Residential Tenancies Act 1997 to hold all Victorian residential tenancy bonds. If a landlord wishes to deduct any funds from the bond at the end of a lease, the tenant’s permission must first be sought. If the tenant does not agree to any deductions, the landlord will have to take the matter further to the Victorian Civil and Administrative Tribunal (VCAT), which will assist to resolve the dispute.