REAL ESTATE

MARKETING
AND BROKERAGE
Report on Commission Computation, Project Selling, General Brokerage and Forms
  Case1:

Sample Case to a: Selling Price – P1,000,000.00

compute for the b. Broker’s Commission – 5%

Broker’s c. No withholding tax

Commission Solution:
1,000,000.00 x 5% = P 50,000.00
  Case2:
a: Selling Price – P1,000,000.00
b. Broker’s Commission – 5% ; WHT is 10%
c. Seller pays for CWT of 6%
Compute :
Sample Case to a. Broker’s Net Commission
compute for the
Broker’s 1,000,000.00 x 5% = P 50,000.00

Commission with 50,000.00 less 5,000.00 = P45,000.00

Withholding Tax b. Creditable Withholding Tax

P 1M x 6% = P60,000.00
c. Net Proceeds
• Creditable Withholding Tax - is an
P 1M less P110,000.00 = P890,000.00
advance income tax of the payee.
  Case 3
a. Selling Price – P 1,000,000.00
b. Brokers Commission – 2% (broker); 3% (agent)
Sample Case to subjected to 10% withholding tax

compute for the c. Compute:

Broker’s and *Gross commission

Agent’s - Broker - P 1M x 2% = P 20,000.00
Commission with - Agent - P 1M x 3% = P 30,000.00
Withholding Tax *Net commission
- Broker - P 1M x 2% x 90% = P 18,000.00
• Those under developers (project selling), - Agent - P 1M x 3% x 90% = P 27,000.00
broker’s needs to pay up withholding tax in
accordance with the law
  Case 4
a. Selling price with VAT - P5,600,000.00 (developer)
b. Brokers Commission - 5% ; WHT 10%
Sample Case to c. Compute
compute for the * Value added tax
Broker’s = P5,600,000.00 x 12/1.12 = P 600,000.00
Commission with *CWT of developer
Withholding Tax = (P5.6M – P600k) x 5% = P250,000.00
and VAT *Brokers Fee net of CWT
= (P5.6M – P600K) x 5% x 90% = P225,000.00
 PROJECT SELLING
VS.
GENERAL BROKERAGE
  Generally, with salary or allowance
 With sales quota
 No employer-employee relationship but acts like an employee
 Free office facilities

Project Selling  Tied by a contract of agency – less freedom

(In-house agents)  Violation of contact of agency may mean forfeiture of commission

receivables
 Work is to sell, get reservations, down payments or full payment
 Documentation and registration is done by the developer
 Commission is usually paid upon full down payment (known as paid-
up sale)
  No salary nor allowance from the developer
 Higher commission rate that in-house agents (5% and up)
 Exclusive brokers get higher rate of commission from 5% to 10%
 Generally, no sales quota

Project Selling  No employer-employee relationship, acts a free agents

 Maintain their own offices (majority, usually in their own residences)
Accredited Brokers
 Not tied by contract of agency - with more freedom than in-house
agents
 Can sell other properties of other developers
 Work is to sell, get reservations, down payments or full payment
 Documentation and registration is done by the developer
  Seller are usually not developers
 Lots of freedom, can sell or lease any real estate property
 Agents, generally, do the documentation and registration
for the buyer and seller
 Maintains their own offices – for majority, usually their
General Brokerage residences
 Commission is usually given upon full payment of
purchase price
 Commission rates range from 3% to 5%
 Brokers here are generally more experienced than in-
house agents of developers
SAMPLE FORMS
 Sample Form
Exclusive (Non-Exclusive)
Authority to Sell (or Lease)
 Sample Form

Contract to Sell

• This is an agreement between a seller

and a buyer. This shows that the seller promises
to sell a property to the buyer, who also promises
to buy the property
Sample Form
Lease Contract
 Sample Form

Intent to Buy with Selling Price

 Sample Form

Extension of Authority to Sell

 Sample Form

Authority to Sell with Hold-

over Clause

• Hold-over clause entitles the broker to

commission even if the sale was closed
after the period of his authority.