Who pays the broker?

[bander]

I'm in real estate, construction and project management in Thailand since 2003.

Usual "rules" in Thailand:

1) The seller has to pay the broker, usually 3% but many ask more like 5% or even above. With a 3% offer you are one of hundreds of lists in a broker's portfolio and be down at the bottom, and his motivation to sell your house will remain there too (at the bottom). If you want to sell quick, adjust the price so you can offer your broker a commission that motivates him enough to put your property at the top of his pile. Keep in mind that the broker has to pay taxes on the commission, profit tax, VAT, his staff, office rent, social benefits for his staff, work permit, visa, car, gas, etc.

Said should be here that it is very difficult for a broker to get rich on commission alone. A broker in Thailand who has no own projects in his portfolio that generate a huge profit from time to time when one is sold (thus having to survive on mere commissions) most likely will be belly up in about three years. See the broker as your friend and not as your enemy and treat him accordingly.

2) Quick one on transfer fees and taxes: There are no fixed rules on who has to pay taxes and transfer fees, but usually the transfer fee is the seller's duty or shared 50/50 seller/buyer. Specific business tax and stamp duty usually are the seller's duty. Witholding tax is seller's duty.

3) I never accept properties of clients who have their own "for sale" signs erected in front of their property. You see for yourself the problems it creates when you have your own sign up while having brokers assigned. You have to chose if you want a broker to sell the property for you or if you want to take matters in your own hands. You can't do both and having your private contact details displayed at your house right into the face of the potential buyer, he will in 90% of the cases try to circumvent the broker. There are too many Cheap Charlies out there and the temptation to circumvent the broker too big. In my opinion, having your own sign there while assigning a broker to find buyers for you is an insult. Think about it.

4) Price negotiations should be done when the broker is present, so he can help you to get out the most out of your sale by assuring the buyer that the property is sound and the price is justified.

5) Instead of having many brokers assigned I suggest you to chose just the one that you like as a person and of whom you think that he is a good salesman. Looking at a broker's success rates is also a good idea, but they can be fiddled to suit your expectations, so I wouldn't bother. Offer this broker a real good commission and ask him what you can do in addition to boost the sale. Let him erect HIS sign in front of your property and keep a good relationship with him. Much better than trying to cook five meals at the same time if you know what I mean.

Good luck with your sale!

You didn't need to tell that you work in real estate, easy to understand that all the bs you write here is only because you want to get more customer and at the same time make a bad picture of whoever try to sell property without the use of an agent.

I don't trust any foreign real estate agent, and certainly not a thai agent, that leaves me and many others to advertise and sell by my own.

Only reason why a broker might be useful I can think about is that they could help with bank loans to the buyer in some cases.

[DGIE]

A broker earns for what he sold.

If you sold by yourself and no help from the broker and the buyer did not get his information from the broker, so why do you need to pay the broker?

[khunPer]

Normal practice to my experience in Thailand seems to be:

Seller pays broker commission/fee and tax at Land Department,

Buyer pays transfer fee at Land Department.

[JungleBiker]

5) Instead of having many brokers assigned I suggest you to chose just the one that you like as a person and of whom you think that he is a good salesman.

Your advice sounds reasonable to me, but how to find brokers to choose from? Are they registered or listed somewhere?

[Jerry Cornelius]

5) Instead of having many brokers assigned I suggest you to chose just the one that you like as a person and of whom you think that he is a good salesman.

Your advice sounds reasonable to me, but how to find brokers to choose from? Are they registered or listed somewhere?

Only legitimate businesses will be registered.

You could try searching for brokers on the internet for the area you're interested in but don't expect a prompt response to their e-mail option of contact. In any case, how can you decide if you like their personality and/or performance if you never qualify those sentiments face to face. Even then, you'll never be sure.

Caveat Emptor is the stance you should take. Particularly in Thailand.

Jerry

[BB1955]

Thanks, Khun Jean, this sounds reasonable!

We advertise ourselves and never requested the help of a broker. They just call and ask if they may help to find a buyer.

Just wonder how they can get any money at all. Should be impossible without a real contract. Maybe the buyer does have a contract and tries to bypass the broker fee now. As a result, the broker is asking us to pay the 3%. Just guessing.

Once the contact between buyer and seller is established, there should not be any way for him to enforce his fees, unless the buyer really signed a contract.

My wife does this as well in her spare time . If she sees a house offered for sale by the owner she will ask them if they would like her to show or list the house. If they say yes she then asks them if they are willing to pay the 3% if she finds a buyer if they say yes she will list the house and show it . If no then she will do nothing .

She did have on situation where she had a lady come from Sweden to look at one of her lots. While we were driving her around she saw a moo baan with lots she liked . My wife brought her into the office of the moo baan found the lots listed took her and showed them . The lady ened up buying two lots over 2 million baht . Moo baan gave my wife a whooping 5000 baht ... The lady was nice though and made sure she covered her gas money ....

No contract not even a verbal aggreement so was not much to complain about ... Live and learn

As far as by passing the broker I assure you if they buy the property the broker will expect 3% ,, I would make it clear up front who is going to pay it and get it in writing . It could keep you out of court or your land being tied up in a civil issue that could take months to sort out in court ...

Edited November 20, 2013 by BB1955

[PattayaPhom]

No pleasing some, we sold a guys house after he listed it with us in two weeks, had been on the market over two years...cheeky git didnt want to pay full commission as we sold it so quick, what a numbnuts, most pay a bonus for selling quickly.

[Jerry Cornelius]

No pleasing some, we sold a guys house after he listed it with us in two weeks, had been on the market over two years...cheeky git didnt want to pay full commission as we sold it so quick, what a numbnuts, most pay a bonus for selling quickly.

Not sure that I would pay a bonus for some-one doing their contracted job. If they were pro-active and got me a better deal than I anticipated, then a tip to the individual agent, may be in order however.

My experience with realtors/agents/brokers has been mixed and I must say that very few have met my expectations in a positive way.

As a potential buyer I have seen the opposing sides of the coin though. On the occasions where I used agents in my search(es)., It's fair to say that the owners of 90% of the properties I was introduced to by agents passed their private number and/or e-mail address, with the comment 'we can cut a deal'.

It's a dog eat dog world and Caveat Emptor is the mandate.

Beware the realtors/agents/brokers and beware the sellers also.

Look at the core business element of property sales/developmet and rental.

Jerry

[Rakathaorai]

As a potential buyer I have seen the opposing sides of the coin though. On the occasions where I used agents in my search(es)., It's fair to say that the owners of 90% of the properties I was introduced to by agents passed their private number and/or e-mail address, with the comment 'we can cut a deal'.

Law of Contract is usually based on an offer, an acceptance and then consideration (usually money ) being exchanged. If there was a verbal agreement between agent and vendor and the agent did in fact introduce the buyer then cutting "a deal" direct and bypassing the broker is illegal as well as immoral.

The fact most Thai agents don't get their agency contracts written up signed and witnessed is probably a legacy of AZN face and ways of doing business for centuries:

If you are somewhat involved anywhere in a transaction then it is expected and upheld in AZN society that you will get a cut of the action. To AZNs it is unthinkable for this not to be paid.

Farang come from a more formalised written environment and are aware that verbal contracts, whilst being legally enforceable, are notoriously hard to enforce if disputed (ie lied about) and when they cut agents out, after an introduction, they dishonour the AZN system of integrity of FACE as well as commit a (admittedly hard to enforce) crime!

For the record I have not worked in the real estate industry for years and have no agenda except for integrity. Which is an area we should lead Thais and Asians in.

Additionally I would say in many cases, internationally, a vendor will often recieve a higher price when the property is solely sold through a broker. This is because of often a real or perceived greater number of interested partie and a sense greater surity & soundeness of the property and price from someone knowledgaeble of the industryand the local market (bearing in mind the definition of market value is where a buyer and seller meet).

The fact that many farang scam the brokers by cutting them out is literally criminal. The fact that some brokers do low quality or limited work is irrelevant to this. You could contract with the broker how many hours a month you expect to be spent on your promoting and selling your property the exent and quality of the advertising, photographs and videography etc and ensure that there is highquality work for that percentage. In Australia I have seen many times that there are benefits to a vendor giving an exclusive contract to an agent as he will put mucho resources into moving the property fast for top dollar.

SE Asia is somewhat the wild west even if it is in the east. Maybe farang should show more integrity in this area for the greater good?

Edited November 26, 2013 by Rakathaorai

[DrTuner]

IMHO brokers here are pretty useless and lazy buggers, just fishing for the occasional bite. I'd only use them in the border line cases, ie. hard to find/hard to sell properties. A lawyer will handle the common paperwork for about 10k. A couple of days on a scooter will show you the spots you're interested in. As a seller making exclusive arrangements makes zero sense unless you have a real barn of a house no one wants.

All in all, in this regard the Thais win the Farang west 100-0.

[Rakathaorai]

IMHO brokers here are pretty useless and lazy buggers, just fishing for the occasional bite. I'd only use them in the border line cases, ie. hard to find/hard to sell properties. A lawyer will handle the common paperwork for about 10k. A couple of days on a scooter will show you the spots you're interested in. As a seller making exclusive arrangements makes zero sense unless you have a real barn of a house no one wants.

All in all, in this regard the Thais win the Farang west 100-0.

I appreciate what you are saying in many cases is true. None the less what I said is in fact law and moral if you had any verbal agreement with a broker. Also it is possible that a broker could actually deliver in regards to what I am saying. My particular interest is as someone with Australia real estate academic qualifications looking to relocate to Thailand permanently I believe I could set up a company in Thailand that offers a far superior service to what is commonly available, which would create a win/win situation for vendors and his agent. So this has been quite and interesting thread as I survey the competition.

Going it alone is a definitely workable possibility particularly when most Thai RE business are extraordinarily lax and arguably do not offer good value for money.

Ideally a good agent should improve returns and reduce work load for a vendor.

[Khun Jean]

Academic qualifications normally disqualifies you for work in the real world.

In the OP's case it was the broker who called and offered his service. This was not accepted, hence nothing has to be paid.

If the buyer then goes around the broker, then what can the broker do. Throw a fit?

[Rakathaorai]

Academic qualifications normally disqualifies you for work in the real world.

In the OP's case it was the broker who called and offered his service. This was not accepted, hence nothing has to be paid.

If the buyer then goes around the broker, then what can the broker do. Throw a fit?

55 Yes the ability to do always usurps a piece of paper that shows someone jumped through some hoops. However in cases of Law of Contract some study and comprehension would be helpful.

I agree in this can there was no contract.

My above posts cover the many cases where there was a verbal contract and yet it was not honoured.

[bentonmadisn]

3% .... in Pattaya FIVE % is the norm!

Actually negotiation is the norm. Only a fool would pay the full price.

Hey,,

buddy i would also go for the negotiation for price of any property but as you depicted it is mainly found that the price for which you would be negotiating is already high advertise also there is a chance that you would end up paying more than stipulated money in terms of commission, thanks for your post it really help me a lot.