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Curious about how much real estate agent commission Thailand earns in commission? Understanding the standard rates and how they’re calculated can help both buyers and sellers make informed decisions. Whether you’re looking to buy, sell, or invest, knowing the typical agent fees gives you a clearer picture of the total costs involved in Thailand’s property market.
Understanding real estate agent commission Thailand
Purchasing property in Thailand for use as a residence or for investment is gaining popularity among the populace and international persons. For instance, if you are buying or selling a property anywhere in the Land of Smiles, it is crucial to appreciate the dynamics in the agency commission. In this blog about commissions in Thai real estate agencies, we will explain what real estate agent commissions in Thailand are, who should pay the commission, and how to calculate the commission in the Kingdom of Thailand.
What is a Real Estate Agency Commission?
A real estate agency commission refers to a charge that an agent or broker makes for their services, which are important in the process of transacting property. Such services may include listing, marketing, property viewing, bargaining, closing the deals, and doing other paperwork associated with a transaction.
Real estate agent commission Thailand is customary and forms part of the property buying and selling exercise. They help real estate professionals make a living and are necessary to the work they do to match buyers with sellers.
Who Pays the Real Estate Agency Commission in Thailand?
In Thailand, the party responsible for paying the real estate agency commission:
- Selling Property: It is almost universal that the seller pays for the commission of the estate agent. Agencies usually express the commission as a percentage of the property sale price, and it ranges between 3 and 5 percent from one agency to another.
- Buying Property: If you are a buyer, who is searching for a property via a real estate agent, you are not bound to bear the commission. This cost falls under the seller’s cost. If you decide to sign an agreement with the buyer’s agent to represent your interests alone, you can negotiate a separate commission deal with them, though they don’t commonly do this.
Other countries where the seller undertakes the commission risk are Sweden, Finland, Norway, Belgium, Cyprus, France, Spain, Portugal, Switzerland, Singapore, the USA, and the UK.
Does the Buyer Need to Pay Any Commission to the Agent in Thailand?
The Thai approach to the relationship between the buyer and the estate agent reveals that the former does not pay a commission to the latter. The commission remains the responsibility of the seller, who has enlisted the services of the agent in marketing and selling the property. This is different from some other countries, where the buyer may have to bring to the table the commission that is to be paid to the buyer’s agent. In Thailand, the buyer’s principal legal requirement is to pay for the agreed purchase price for the property plus taxes, fees, or any other incidental expenses.
What is the Standard Commission Rate in Thailand?
Real estate commissions in Thailand How do real estate commission rates differ with the area or the location of the property? However, there are some general guidelines:
Thailand Commission Rate: The listing agreement throughout Thailand, excluding Hua Hin, Cha-Am, Krabi, Phuket, Koh Samui, and Pattaya, must set the commission rate at no less than 3% of the total sale transaction value.
Commission Rates in Specific Regions: However, most importantly it happens in different famous travel spots like Hua Hin, Cha-Am, Krabi, Phuket, Koh Samui, and Pattaya; the commission rate has been found to be a little higher than the general rate for such OTAs and can be about 5 percent of the overall sale transaction value.
An important factor to consider is that these commission rates are lower in this particular area because of increased market and operating expenses.
Can you negotiate a commission?
Since there are no laws or regulations stating the allowable commission rates, you may be able to negotiate for lower commissions relative to the type of transaction, the services that will have to be provided, and the nature of your relationship.
Some agents will negotiate for a reduction of the commission fees if they are both the buyers ’ agent and the listing agent in a home sale contract.
Do note that a lower commission is not always the most desirable thing. Some of the fees included in the bargain are the marketing costs and other business incidents related to the home sale. A small budget means that your agent is in a position where s/he cannot well market your home. While you can ask questions like “How much does that agent charge?” you can also assess the value they offer.
Buying or selling a home is. To know the whole picture it is necessary to consider how both real estate agents involved in the transaction get their money. For that, you’ll get an option to choose whether to go for hiring an agent or go alone.
What does the commission cover?
The average real estate agent commission covers a wide range of services an agent provides during a home sale.
These services can include:
- Working with the seller to set a realistic price for the home – we at REMAX provide a market research report. In this report, we recommend a sale price and reject overpriced listings.
- Marketing your property through a variety of online and offline channels. Marketing is a king and, being so, it costs quite a price.
- Professionally presenting the property to potential buyers, negotiating the transaction details, and being present during inspections and appraisals.
- And ultimately closing the sale. It includes drafting agreements and assisting with transfer ownership.
- If the buyer needs a bank loan, a good broker may assist in making good connections.
How is the Real Estate Agency Commission Calculated?
The calculation of the real estate agency commission in Thailand is typically based on a percentage of the property’s sale price. Here’s a simple example to illustrate how it works:
Suppose you are selling land with a sale price of 5 million Thai Baht, and the real estate agent’s commission rate is 3%. The commission fee would be calculated as follows:
Commission Fee = Sale Price × Commission Rate Commission Fee = 5,000,000 THB × 0.03 (3%) Commission Fee = 150,000 THB
In this example, the seller would pay a commission fee of 150,000 THB to the real estate agency upon the successful sale of the property.
It’s essential to clarify the commission rate and payment terms with your chosen real estate agency before agreeing. You should clearly outline these terms in a written contract to avoid any misunderstandings. This contract is called an Agency Agreement.
Understanding real estate agency commissions is crucial when navigating the property market in Thailand. Whether you are buying or selling, knowing who pays the commission and how you calculate it will help you make informed decisions during your real estate transactions. Always work with a reputable and licensed real estate agency to ensure a smooth and transparent process.
Conclusion
Real estate agent commission Thailand are an important part of the property transaction process. By understanding these fees, you can better plan your budget and avoid surprises down the road. Isn’t it helpful to know exactly what to expect when making such a big investment?
References:
https://www.linkedin.com/pulse/how-real-estate-broker-fees-work-thailand-condodee
https://appnetizens.com/computer/real-estate-agent-fees-in-thailand-how-much-does-a-realtor-charge/
https://aseannow.com/topic/1306284-agents-commissions/
