While in Western countries there are specific types of licensed agents that property seekers will work with depending on their individual needs, the profession in Thailand does not require a license. This means that those looking to become an agent will have to choose what direction they want to take their career, and those looking for a property will have a choice of what type of agent to work with.
If you’re involved in Thailand’s real estate market, it’s always helpful to keep in mind the different types of agents out there, and what working with one, or becoming one, means to you.
Freelance Agents
Freelance real estate agents are completely independent contractors. Similar to small business owners, this type of self-motivated agent relies only on him or herself for income. This means that the freelancer must be responsible for all costs involved with being an agent.
Pros: The agent will get 100% of the cut for any deals he or she closes, thus this type of agent has completely uncapped earning potential, with a potentially a perfect effort-to-income ratio. These agents also have the freedom to be their own boss, and work the hours they choose.
Cons: This can be a challenging and stressful way to make a living, as it is entirely reliant on how self-motivated the individual is. It can also be difficult to establish a reputation as a freelancer, with only your professional network to market your service for you.
What does it mean for property seekers? Property seekers may want to work with freelance agents in order to have more negotiation power. Freelance agents may be more motivated than other agents to close a deal, which for a buyer can have both advantages and disadvantages. A highly motivated agent may work around the clock to find you the perfect property right away, helping you and getting them faster commissions. On the other hand, there is a risk of working with some dubious individuals who will do “whatever it takes” to try and close a deal.
Salary-Based Agents
Having a salary is the most stable way to make money working in real estate. Salary-based agents are hired by an agency and receive regular pay checks regardless of results, and have the opportunity to make additional income of between 20 percent and 25 percent commission.
Pros: Salaried agents can enjoy a predictable income, regardless of the agent’s professional network or fluctuations in the market. This can be a very good thing for agents who are working in unstable economies.
Cons: Salaried agents have the lowest earning potential. For agency owners, offering a salary to agents may turn out to be demotivating.
What does it mean for property seekers? As this type of agent does not rely on having his or her own clients to make their income, there is a tendency in Thailand to offer lower-quality service. This can be shocking, especially for foreign property seekers who are used to a higher standard of service that’s offered in more developed markets. Therefore, services of this type of agent is depended on the reputation of the agency or brand.
Employed Commission-Based Agents
Perhaps the most common way of working in real estate, these agents are hired by established real estate agencies and are paid when they close a deal. When they are able to do so, they will receive about 40 percent to 45 percent of the total commission, with the rest of the commission being paid to the company, which provides the agent with leads and listings.
Pros: This is a hassle-free and simple way to get started as the agent has access to the company’s listings and marketing efforts, thus there are no upfront costs or efforts required. He or she must only accept a job offer to start making money with their new agency.
Cons: The lower commission can be a deterrent for highly motivated or entrepreneurial agents.
What does it mean for property seekers? There are many real estate agencies that employ agents, but not all agencies are equal. Make sure if you work with an agent at an agency you investigate the reputation of it. A good agency will be able to assist you with other aspects of property purchasing, such as inspections and legal recommendations. Basically, as a professional, he or she should service you as a real estate consultant.
Corporate-Affiliated Agents
These agents, while still independent and able to collect 100 percent commission, can take advantage of the unique support-system provided by Century 21 Thailand. These agents will pay a one-time fee for all the necessary marketing materials, including branded polo shirts, business cards, sales kit, a consultant ID card, etc. A low, monthly fee also grants access to Century 21’s admin usage, career development services, as well as the corporation’s CRM system and more.
Pros: This agent can still achieve 100 percent commissions, while having their reputation backed by a global corporation. The logistical and administrative support is also a very valuable benefit, especially for those just entering the industry.
Cons: There is the cost of the one-time membership fee involved and, like a freelance agent, the corporate-affiliated agents must rely on self-motivation.
What does it mean for property seekers? Rest assured that these agents have all been approved by the sponsoring franchise, Century 21, so there tends to be a greater trust between the consumer and agent. These agents are equally as (or arguably more) motivated than their freelancing peers, as they have the same pressure to preform but are seemingly more willing to invest in growing their business practice.
Century 21 has established the Thailand Sales and Management Academy which allows both employed and non-affiliated agents the opportunity to achieve a license from the globally recognised brand. Century 21 sponsored this content which first appeared in the current issue of Thailand Property magazine.