Real estate agencies rolling out commission advance packages

Agents can be paid a portion of their commission earlier; they also get training subsidies, discounts on office rent

Tue, Apr 07, 2020 - 5:50 AM
UPDATED Tue, Apr 07, 2020 - 11:19 AM

Siow Li Sen


REAL estate agencies are rolling out support packages to their salespeople to tide them over the mandated one-month stoppage due to Covid-19.

The five largest property agencies which account for the lion's share of the 30,000 agents in Singapore say their help includes commission advances, waiving fees as well as paying for professional courses agents have to attend to stay licensed.

Propnex, Singapore's largest property agency has rolled out a S$30 million plan to help its 8,500 agents.

The plan involves a S$25 million advance commission scheme which allows those who had concluded their deals and exercised before 30 June 2020 to apply for the early release of their commission, capped at S$10,000 per agent. Developers generally take three to six months to release the commission.

The scheme also applies to resale transactions submitted before March 31, 2020. The amount is capped at S$1,000 per transaction and limited to S$10,000 for each agent.

PropNex's more than 250 team leaders or senior partners can apply for an advance on their management fee based on their average income for the last six months. This is capped at 50 per cent of the average income or S$10,000 per leader, whichever is lower.

The mainboard-listed firm also has a pension fund for its team leaders, and will release up to 40 per cent of the fund or S$10,000 per leader, whichever is lower. The pension fund monies are normally given to leaders after 10 years of employment, Ismail Gafoor, chief executive officer of PropNex Realty, told The Business Times.

The company is also waiving agents' 2021 annual convention and training fee.

Additionally, it will subsidise up to 50 per cent of continuing professional development (CPD) training fees. Agents are required to attend three CPD courses per year in order to renew their licences.

In addition, PropNex is passing on S$100,000 worth of government rental rebates to its agents. This includes a 25 per cent discount for rooms and fixed seats in May and June 2020.

Over at ERA Realty which has 7,100 agents, there is no dollar cap on commission advance which has always been available, said CEO Jack Chua.

Normally the firm would have 10 to 20 agents a month who would apply for advance commission, said Mr Chua. "During this time, we expect more agents will apply for it," he said. "Anyway it's the agent's money, not the company's."

When a deal is completed with commission paid by the seller to ERA, the agent's portion is usually 90 per cent, with the firm getting 10 per cent, he said.

"Say the full commission is S$20,000, we can advance up to S$16,000 which is 80 per cent of the commission. The other 10 per cent we will pay the agent when the commission comes in," he said.

ERA is also subsidising in full the CPD training fees on condition the agent completes the courses by April 30.

It is offering agent and training room rental discounts of 10 per cent for three months.

For agents and their clients affected by the quarantine order, ERA will provide three meals a day, delivered to their homes.

Agents diagnosed with Covid-19 will receive pay-outs of S$500 per day during the period of hospitalisation, or up to a period of 30 days of hospitalisation, whichever comes first. This works out to a maximum amount of S$15,000 cash relief for the agents.

OrangeTee & Tie, the third largest agency here, is providing free Covid-19 insurance to all its 4,300 agents up to the end of 2020 and paying for all CPD courses, said Steven Tan, managing director.

Other support includes a 20 per cent discount on room rental for this quarter and it will waive all administration fees for the e-Stamping, he said.

On advance commisssions, "not at the moment" he said, though in the past the firm has offered them on a case-by-case basis. "In a year, only a handful would have applied," he said.

The firm's entire 11-strong management team is taking a 15 per cent pay cut to the end of the year. There is no pay cut for its 110 staff, said Mr Tan.

Huttons Asia which has 3,000 agents said its S$18 million commission advancement scheme will take immediate effect. The firm will also pay for two CPD courses and waive all admin fees for e-Stamping, ResaleNet and valuation submissions for one month.

It is offering a 50 per cent subsidy for three months' room rental up to June.

SRI has set aside S$4.5 million to help its 900 agents tide over this period, said Bruce Lye, managing partner and co-founder of the four-year old firm.

More importantly, there will be no pay cut and no layoffs of its 20 staff, said Mr Lye. He and co-founder Benson Koh are not on the company's payroll.

"The backbone of our agency, our management and staff, even down to the cleaning aunties who will not have to work during this period, have been assured that they will not face any layoffs nor salary deduction during this period," he said.

Of the S$4.5 million package, S$3 million is for commission advance. Mr Lye said commission advance has been in place since the inception of SRI four years ago.

While most agents do not require advance commission, some may need it, he noted. The highest single amount SRI paid out in commission advance was S$98,000.

The company is providing S$800,000 for e-learning and training and S$300,000 for 2021 Council for Estate Agencies registration renewal.

There is also a S$300,000 pool (1 per cent additional commission payout) for deals transacted during April and May, to incentivise agents to think out of the box and leverage on technology to close deals remotely, said Mr Lye.