Start a Singapore Real Estate Agency
How to start a Singapore real estate agency?
What is a real estate agency?
A real estate agency, also known as a real estate brokerage, is an agency involved in the business of helping potential clients buy or sell houses.
Are there any perks to starting a Singapore real estate agency?
Singapore has a very robust property market. It has one of the strongest and most resilient economies in the region that is able to rebound from setbacks quickly. This, in addition to its talented human resource pool and strategic location, has made Singapore a business and financial hub in Southeast Asia. Therefore, many people from all over the world would like to live in Singapore. Many wealthy foreigners, who are a significant target market for many a real estate agency, want to make the beautiful island city-state their second home. Among locals, small business owners are also an important target market due to the recent rise in entrepreneurship in Singapore. The increasing influence of social media also helps real estate agencies by facilitating the spread of information about such agencies.
Thus, now might be a good time to own a real estate company or agency in Singapore, especially because residential units and commercial space are being quickly snapped up by owners, occupants, and investors alike. As start-up costs are not exorbitant, starting such a company will have both short-term and long-term benefits with regard to personal assets and overall company revenue.
What do I first need to do to start a real estate agency in Singapore?
The first step towards operating a real estate agency in Singapore is to incorporate a company and know the requirements. Those who select a partnership or sole proprietorship as the business of their choice must register it with ACRA (Accounting and Corporate Regulatory Authority of Singapore). The following compay registration guide:
- Things to take note before registering your Singapore Company
- Myths of Singapore Company Registration. True or False?
- What Are The Guidelines For Foreigners to Start a Business in Singapore?
The next step is a crucial one. Companies, partnerships, and non-individual sole proprietorships (See the different type of legal business entities in Singapore ) involved in the business of the buying, selling, and leasing of properties must apply for a House Agent License. This important real estate license can be obtained from Singapore’s IRAS (Inland Revenue Authority).
To be the main licensee of the House Agent License, you’ll need to:
- Be a Singaporean citizen or permanent resident (PR); (More info here for matters regarding Application to be a PR)
- For foreigner, you need to have the relevant working visa to be director and work for the company. See the BEST working visa choices for you
- Have a graduate degree in real estate from NUS (National University of Singapore) or be an advocate or solicitor who holds a practicing certificate;
- Have passed one of the following: CEHA (Common Examinations for House Agents), the Association of Singapore Realtors’ Course, or Singapore Institute of Surveyors and Valuers’ Real Estate Agency Course;
- Have at least one year of experience working for a licensed real estate agency;
- Have, over the last two years, concluded at least 20 property transactions for a licensed real estate agent. At least five out of these 20 property transactions must be the sale or one-year lease of private properties. The 20 property transactions must either be (a) direct cases or (b) a combination of 15 direct cases and 10 co-broke cases (each co-broke cases will be regarded as half a case). For each of these transactions, the net commission received must be a minimum of S$1000.
- Have a controlling stake, i.e., more than 50% of all shareholdings, in the proposed real estate agency.
How to apply for the House Agent License
Applicants must submit the following documents and information to the IRAS’s House Agents Licensing Unit:
- A copy of the company’s Business Profile (which can be obtained from ACRA for a small fee);
- A certified true copy of a real estate degree certificate from either NUS (National University of Singapore) or from one of these following: CEHA (Common Examinations for House Agents), the Association of Singapore Realtors’ Course, or Singapore Institute of Surveyors and Valuers’ Real Estate Agency Course;
- A letter from the Singapore Law Society, complete with personal details, if the applicant is an advocate or solicitor;
- A testimonial from the licensee of a licensed real estate agency;
- A comprehensive list of all transactions concluded: this list must be verified by the licensee of the licensed real estate agency;
- Documented proof of the aforementioned 20 sale/lease transactions;
- The personal particulars of the company’s director/partners/sole proprietor;
- The passport-sized photos of the company’s director/partners/sole proprietor;
- The qualifications and working experience of the company’s director/partners/sole proprietor.
If all documents are in order, the applicant can expect to receive a notification within one to two weeks of the submission. The notification will mention that the application for the House Agent License has been approved. A total of S$130 must be paid for the issuance of the House Agent License.
There should be no reason for the authorities to reject the application if all the necessary documents and accurate information have been submitted. To save time and resources, once can hire a professional services firm to handle the House Agent License application.
Renewing a House Agent License
A House Agent License expires on the 31st of December every calendar year, regardless of the month in which the application is made. Therefore, applicants are advised to apply as early in the year as possible. The license must be renewed at least 10 days before the expiry date. The application will be processed after submission of the necessary forms and documents to the IRAS’s House Agents Licensing Unit. The complete renewal process takes approximately four weeks.
An overview of the proposed new regulatory framework for the licensing of real estate agencies
The Ministry of National Development has proposed the setting up of a new statutory board called the Council of Estate Agencies. This Council will take over the IRAS’s role and will start implementing a new framework for the regulation of the real estate industry. This new regulatory framework seeks to:
- Introduce and ensure that all real estate agents are registered.
- Introduce new regulations dealing with the conduct of all real estate agencies.
- Mete out discipline and enforce the mechanisms related to dispute resolutions.
- Improve the licensing of real estate agencies.
Proposed compulsory registration of real estate agents
Real estate agencies will have to make sure that all of its agents are registered with the Council as well as meet all the following requirements:
- Be a Singaporean citizen or permanent resident (PR);
- Be 21 years of age or older;
- Must not be registered with another agency or be an existing licensee of another agency;
- Have a minimum of 4 GCE O-Level passes or the equivalent;
- Have passed one of the real estate industry’s examinations;
- Be enrolled in one or more professional development courses;
- Must not be a licensed moneylender or an employee of a licensed moneylender;
- Must not be an un-discharged bankrupt;
- Must not have any track record of convictions;
- Must not have a record of criminal activity that involves either dishonesty or fraud;
- Must be wearing their agent identification cards at all times while working in the capacity of a real estate agent for a real estate agency.
There will also be a Code of Ethics and a Professional Conduct Standard, as well as the introduction of disciplinary action against errant agents and agencies. Arrangements will be made to manage the transition of existing agencies and agents to these new standards, which have yet to be finalized.
Proposed improvements in quality for real estate agencies
Most of the licensing conditions that have been mentioned above are still applicable. The proposed improvements come in the form of new licensing conditions which the main licensee will have to satisfy. These includes most of the points mentioned in the section above titled “Proposed compulsory registration of real estate agents”, as well as the following:
- Having at least three years of working experience;
- Have completed at least 30 property transactions in the past three years, of which at least 10 are for private properties and at least another 10 are for HDB flats (also known as public housing);
- Have sufficient coverage under a Professional Indemnity Insurance;
- Make sure that there are systems and processes in place that will ensure the proper management of both the real estate agents and the agency.