LetsGetHome: Reducing Both Information and Commission Costs

In Hong Kong, leasing commission calculation is influenced by the Competition Ordinance. Since December 14, 2015, the commission of real estate agents is no longer a fixed amount or percentage, but is determined based on market conditions and client preferences. Generally speaking, the traditional rental commission was equivalent to one month's rent, but now this ratio has greater flexibility.

What Is Rental Commission

In Hong Kong, rental commissions typically refer to fees charged by real estate agents to assist tenants in finding rental properties. The rental commission rate is usually equivalent to one month's rent, but the exact amount can vary depending on factors like location and the agent or agency.

When to Pay Rental Commission

Rental commission is usually paid to the real estate agent upon signing the lease agreement and making the first rent payment. This fee serves as compensation for the agent's services during the rental process.

Short-term Rental Commission

The calculation of commission for short-term rentals may differ from long-term leases. Due to more frequent management and a higher turnover rate, the commission for short-term rentals might be relatively higher.

Commission for Renting Out

When landlords rent out their properties through real estate agents, they need to pay a commission as a fee for the agent's services in marketing and managing the rental. This commission is often a portion of the first month’s rent.

What Is Rental Commission Rate?

With the implementation of the Competition Ordinance, Hong Kong's law prohibits price-fixing in the real estate industry, and commission charges need to be determined based on market conditions and client circumstances.

The primary role of real estate agents is to act as intermediaries and help reduce information costs. They collect relevant market information for clients, such as listing details from landlords and recent transaction data. The commission you pay to real estate agents is essentially for the purchase of this information.

Negotiating Agent Commission

When considering whether to pay a month's commission, the quality of service provided by the real estate agent needs to be evaluated. If the agent is well-versed in the market and can find you the ideal property, then paying the commission is justified.

However, in some cases, you can consider paying a lower commission, for example, when you have already collected extensive information online and have a deep understanding of the target unit. You can propose to pay a lower commission if you are able to make quick rental decisions, thereby reducing the agent's expenses.

Of course, if the real estate agent can provide you with highly valuable information, such as introducing suitable and reasonably priced units, then paying a higher commission is worthwhile.

Additionally, hiring a real estate agent has the advantage of their assistance in negotiating rent, aiming for a better price. Agents have rich experience and negotiation skills, which help in securing more favourable transaction terms.

Reducing Both Information and Commission Costs - LetsGetHome

In Hong Kong's real estate market, there's a common misconception among landlords and tenants that the agent's commission usually equates to one month's rent. However, this is not a legal requirement but rather a market convention.

How to reduce both information and commission costs? LetsGetHome offers an innovative solution - pay-as-you-go, providing landlords and tenants with more flexible, transparent, and reasonable agent commission services.

This approach is particularly beneficial for tenants who have done their homework thoroughly. For instance, the cost for each property viewing is only $100 HKD. This means significant savings for those who have already gathered extensive information through the internet or other channels.

For landlords, LetsGetHome also offers a more economical and effective option. In the traditional model, landlords might have to pay up to half a month's rent as commission to the agent. But with LetsGetHome, whether it's for price negotiation or signing a lease contract, the cost required from the landlord is $1000 HKD, significantly reducing the burden of costs for landlords.

Through this flexible and transparent pricing mechanism, LetsGetHome can more effectively help landlords and tenants reduce both information and commission costs. This not only makes the rental process more efficient but also provides greater control and flexibility to both parties, enhancing the overall rental experience.

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