documented in advance and a clear understanding of when thecommission is due.
For those selling property the commission rates remain a commercial negotiation. Other cost elements in brokerage agreements include VAT or withhold tax, depending on the agency Taxation status. Tax rates are 3% for withholding tax or 7% VAT (value added tax), and one or the other apply.
Equally important is at what time in the transaction the commission is paid. This is mostly related to the actual payments made and not the closing of contracts.
With new projects with periodic payments this is usually due when the initial payment, which is at least 20-25% of the entire purchase price, is made.Agency exclusives or sole-agent agreements here were not widely used in the past but are starting to surface and will certainly be a trend in the future.
These are agreements wherein only one agency is used and there is absolute reliance on the single resource to sell the property.
Those considering such deals need to look at past performance or benchmarks on successful sell-outs of product along with the associated risk attached. Both pros and cons apply and this type of set-up exists in the wider global market with many landmark projects successfully sold on this basis.
The low down on commissions is fairly basic but all too often sellers cannot see the forest for the trees. Commissions are the heartbeat of a healthy capitalistic business venture where you only pay for what you get.
Performance is rewarded only on virtue of actual results, something sorely missing in today's business world. All too often the focus is not on what was achieved in terms of revenue from a sale but concentrating on what amount an agent received in commission.
Sellers pricing in commissions and incentives along with putting together clear brokerage agreements only have upside in today's market, with the old adage applying you can only take actual sales to the bank.