Start a Singapore Real Estate Agency
How to Start a Singapore Real Estate Agency?
What Is a Real Estate Agency?
A Real Estate agency is involved in the business of helping people 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 economies in the region, and with its talented human resource pool and strategic location, it’s no surprise that Singapore has become business and financial hub in Southeast Asia. Singapore also has an economy that always seems to be able to pick itself up without any worry or fear, and wealthy foreigners enjoy making the beautiful island city-state their second home. With all this going for it, it’s definitely a good time to be a real estate agency in Singapore as residential units and commercial space are being quickly snapped up by owner-occupants and investors alike.
What Do I First Need to Do to Start a Real Estate Agency in Singapore?
The first step towards conducting business as a real estate agency in Singapore is to incorporate a company, or if you’re going the partnership or sole-proprietorship route, register your Limited Liability Partnership or sole-proprietorship with the ACRA (Accounting and Corporate Regulatory Authority of Singapore).
The next step is a crucial one. If you’re a company, partnership or sole-proprietor (not individuals) whose business involves buying, selling and leasing properties, then you’ll need to apply for a House Agent’s License. You need to get this license from Singapore’s IRAS (Inland Revenue Authority).
To Be the Main Licensee of the House Agent’s License, you’ll need to:
- Be a Singaporean citizen or PR (Permanent Resident); (More info here for matters regarding Application to be a PR)
- Have a graduate degree in real estate from NUS (National University of Singapore); or you must be an advocate/solicitor who holds a practicing certificate;
- Have passed one of these 3: 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, in the last two years, concluded at least 20 property transactions for a licensed real estate agent. At least 5 out of these 20 property transactions must be the sale or 1-year lease of private properties. The 20 property transactions should 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 should be at the very least SGD 1000.
- Have a controlling stake, that is, more than 50% shareholdings, in the proposed real estate agency.
How to Apply for the House Agent’s License
You’ll have to submit the below documents and information to the IRAS’s House Agents Licensing Unit:
- A copy of your company’s Business Profile (which you can obtain from ACRA for a small fee);
- A certified true copy of your real estate degree certificate from either the NUS (National University of Singapore) or from one of these 3: 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 your details, if you’re an advocate or solicitor;
- A testimonial from the licensee of a licensed real estate agency;
- A comprehensive list of all the transactions concluded by you. It also has to be verified by the licensee of the licensed real estate agency.
- Documentary 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 your documents are in order, you can expect to receive a notification within 1-2 weeks of your submission. This notification will advise you that your application for the House Agent’s License has been approved. You will need to pay SGD 130 for the issuance of the House Agent’s License.
But What if I get Rejected?
There should be no reasons for the authorities to reject your application if you have submitted all the necessary documents and accurate information. In order to save both your time and resources, you can hire a professional services firm to handle your House Agent’s License application.
Renewing your License
The validity of the real estate agency license is for the duration of 1 year, expiring on the 31st December every calendar year, irrespective of the month in which you made the application (so applying in January will prove advantageous). It is a must to renew your travel agency license 10 days before the expiry date. You can process your renewal application by submitting the necessary form and documents to IRA’s House Agents Licensing Unit – expect to wait about 4 weeks or so for the renewal process to be completed.
A Quick 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 IRA’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’ works.
- Meeting out discipline and enforcing the mechanisms related to dispute resolutions.
- Improving the licensing of real estate agencies.
The 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 below requirements:
- Be a Singapore Citizen or PR (Permanent Resident);
- Be 21 years of age, or above;
- 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;
- Always enrolled in continuing 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 complains or convictions;
- Must not have a record of criminal activity that involves either dishonesty or fraud;
- Must be wearing their agent identification cards at all time 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/agencies and dispute resolution mechanisms. Arrangements will be made to manage the transition of existing agencies and agents to these new standards, which have yet to be finalized.
The Proposed Improvement in Quality for Real Estate Agencies
Most of the licensing conditions that has been mentioned above will still be applicable. The proposed improvement comes in the form of new licensing conditions which the Main Licensee will have to satisfy. This includes most of the points mentioned above in the Proposed Compulsory Registration of Real Estate section above, as well as these new ones:
- Having at least 3 years of working experience;
- Have completed at least 30 property transactions in the past 3 years. At least 10 of these transactions will have to be for private properties, and at least another 10 has to be for HDB flats (also known as public housing);
- Having sufficient coverage under a Professional Indemnity Insurance;
- Making sure that there are systems and processes in place that will ensure the proper management of both the real estate agents, and the business.