The Answer To This Question Is – It Depends!
👉🏽 Primary Home Market
If you are buying a property from a developer; Prelaunch/Under Construction/Complete project, then the developer pays commission to the real estate agent. In such a scenario, you do not have to pay commission to the real estate agent. However, it is also ethical that you go with the real estate broker to the project site and register yourself yourself as his client.
👉🏽 Investor/Resale/Secondary Home Market
If you are purchasing a home in this scenario then you definitely have to pay commissions ranging from 1% to 2% (Plus GST if eligible). The real estate agent holds responsibilities as the enabler of the transaction.
👉🏽 Renting the Property
The real estate agent commissions for renting a property depends on the tenure of the rental agreement. The longer the tenure, the more is the commission. The bare minimum is 1 month’s rental remuneration as commissions. The lock in period of the agreement should at least be 1 year. Rental agreements in excess of 3 years accrue more real estate commissions. Sometimes commissions are to be paid at the time of renewals. However, that is subjective to your negotiation skills.
👉🏽 Auction Properties
If you are buying an auction property through a bank, then the real estate agent’s role is amplified. It is not easy to deal with the bank and it’s nitty gritties. The experience and relationship of the real estate agent with the bank is of utmost importance. The commissions in such situations is set at 3% and is paid in a staggered manner. The 1st installment of 1% is at winning the bid, the 2nd installment is at the time of final payment to the bank and the final 1% is at the time of actual handover/possession of the property. The reason why the fees are higher than normal is because of the work involved as well as the huge amount of discount which the buyer gets. Sometimes in excess of 35% of the market value.