Need opinion on agent commission

We just sold our place in Tung Chung a couple of weeks back (before all this new nonsense). The agent which helped me is the same one who helped us buy it in 2009, and I believe he always gave sound advice (to the extent that an HK property agent can be honest... no offense to any agents who may be reading). This agent no longer lives anywhere near us as he moved to TKO several years back, but when I asked him his opinion on selling later in the year he said it was a good time to sell and told me he would be my agent for half commission. Okay I said, without ever signing anything. He had hooked up a couple of local agents from the same company to bring over potential buyers, one of which was a Chinese couple from Zhuhai. Here's where it gets interesting.


After seeing our place, the couple was interested and approached us directly, preferring not to use agents. I told them I don't care what they did, but I need to give something to the agent who referred them to me which ultimately resulted in a sale. They got their agent friend to prepare all the paperwork for us... not sure what they gave her but on paper it's 15K.


Our place went for about 9m so had we done it the usual way via the agency, the half commission to said agency would have been about 45K, with 22K as the agents share. This guy helped me review the agreement, helped me find a lawyer, and gave me some advice after the fact, but didn't do any "official" preparation (granted, this is not a huge effort anyway). So now I'm struggling with how much to give him. Local friends tell me anything from 5K to 10K would suffice, I thought 15K was more like it but perhaps he expects more like 20K. I have no experience in going this backdoor route this so I'm trying to collect any opinions or experiences on those who might have, or just thoughts in general. Thanks in advance for any help!


(just an added note, the paperwork and the deal are fine... other than the general shady behavior of screwing the agent who showed our place, the buyers are above board, so no worries there)

At the end of the day, this guy is doing a job.. half commission is pretty nuts but I guess that just goes to show how hard it is to sell something right now.. Don't get it twisted, he's not your friend, he's a property agent.


That being said, he does this for a living, has kids to feed, bills to pay. Pay what you feel is reasonable keeping in mind that typically he would have made 90k from this sale. Ultimately, the guy did do his job. That's on you.

@ elsdon - is 1% standard? It's been a long time since I have paid anything other than 0.5% commission on a sale or purchase.

I don't know, I've only been through 4 transactions here in hk.. 2 buys, 2 sells.. I paid 0.75% lowest.. Context: my last 2 sales were in 2010.


You've been negotiating 0.5%'s all along? Pretty cutthroat..

If we had gone through his agency, we would have paid the .5% (1% was never on the table), and he would have got half, so about 22K.


It's hard because I can make the argument that he didn't really do anything if the only qualifier processing the paperwork. He didn't post any ads or do any legwork, he just made some calls and referrals. On the other hand, he's always given me good advice, so I have to take that into account.

@elsdon - I think we paid 1% early on but it has been 0.5% for several years now


@ Ted - I view commission as something paid to the agent to find me a buyer (or a property) first and foremost. Taking care of the paperwork is very much a secondary consideration. If he found me a buyer that paid me a good price and I only had to pay him $22 K for selling a $9 million property, I would consider that I had got a very good deal and would have no qualms about paying him.

Well to be exact, his colleagues in his local office found the buyer, but that's quibbling. What's unfortunate is the agent that DID find the actual buyers gets nothing... another good argument for giving my guy more and maybe he can take care of that other guy.

"I think we paid 1% early on but it has been 0.5% for several years now"


Move to the USA and pay a 6% commission.


The way I work is:

+ If an agent sells at or above my target price, then I pay a 1% commission.

+ If we wants me to take less than my target price, some of the difference comes out of his commission.


I think this gives the agent a strong incentive to get the best possible price


I don't expect people to work for nothing - everyone has to eat. 1% is cheap already


I have done almost 20 transactions here, so I am not without experience in this area

With that OTP, it's worth noting that this guy didn't do any negotiation for me (we technically didn't use agent per the buyer's preference). You could say I got to pocket the savings, but that's beside the point. I guess you could call whatever I give him more of a finder's fee... not sure if you have any particular experience going off the beaten path as I have here.

I think what you suggested makes sense.

ANd whatever you come up with in that range sounds fair enough


But I don't think pushing for the lowest possible commission is always the best way to work

Not a complex situation and certainly not off the beaten path. He did the job exactly as you verbally agreed with him - his agency found you a buyer. You owe his agency 0.5%.


And offering the agent (as compared to agency) the money direct might meet the definition of a bribe. Good luck fighting the ICAC if they come calling on that.

Thanks OTP, and agree that it's not just about saving the buck.


HKX - Agents get shafted like this all the time, verbal mean squat unless you sign an exclusivity agreement. I'm actually trying to take care of my guy, unlike the buyers. Thanks though for providing some drama to a relatively calm thread... it wouldn't be AXP without sizzle.