Property agents’ 2+2 commission formula is wrong

WHY do some property agents insist on a commission of 2 per cent from the seller and 2 per cent from the buyer, and accuse others who accept less of undercutting?

Till today, most agents will tell you it is standard. However, that 2+2 formula was when HDB flats changed hands at well below $50,000. It was to compensate agents for losses compared to private properties, which was then 2 per cent from the seller only, as they did about the same amount of work.

Incidentally, the cheapest private properties in Serangoon Gardens went for about $300,000. See the gap?

In the past 10 years, HDB prices have risen but some agents still demand 2+2 commission from unsuspecting buyers and sellers. From my observations, most who pay 2+2 commissions are illiterate HDB flat owners. The more educated ones pay only 1 per cent. I have paid less.

Lim Teck Seng

Source : Straits Times – 30 Oct 2009

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