Land brokers are being offered exorbitant commissions.

Having distributed over 100 project plots in Dong Nai, Kim Phat Company was promised a commission of up to 12% of the product value by the investor, whereas previously this fee was only 10%.

The Gold Hill project, developed by Long Kim Phat Company (a subsidiary of Dat Xanh Group), is also known as the Trang Bom Residential Area and comprises 1,264 plots of land. Kim Phat acted as the sales agent. During the project's distribution, Kim Phat was accused by customers of only rushing to collect payments, delaying contract signing, and selling at prices 1.7-1.8 times higher than the actual value. Many opinions suggest that the 12% brokerage fee for this project is quite high. On average, each plot of land has a base price of 400 million VND, with a commission fee of 48 million VND per plot for the broker.

Long Kim Phat's representative, General Director Tran Cong Luan, acknowledged that the 12% commission fee is indeed higher than previous sales (which were only 10%). The reason the company offered a higher brokerage commission to Kim Phat is because this is the final phase of selling off remaining inventory. Mr. Luan stated that while this is a high commission fee in Dong Nai province, it is not the highest.

A view of the Gold Hill project, which Dat Xanh Group has been promoting on its website since 2013.

Having secured a 12% commission for the Gold Hill project, Kim Phat sold 105 land plots, but the company claims it has not yet received its brokerage fees from the developer. On October 18th, a group of people believed to be employees of Kim Phat Real Estate Joint Stock Company displayed banners at the headquarters of Dat Xanh Group, located at 27 Dinh Bo Linh Street, Ward 24, Binh Thanh District, demanding payment. The banners read: "We request that Long Kim Phat Company, a subsidiary of Dat Xanh Group, pay us our brokerage fees."

Kim Phat Company claims that the developer has been delaying the payment of project brokerage fees and the agreed-upon deposit, causing difficulties for the company, hence the protest to demand payment.

The project's distribution unit stated that, as of September 30, 2016, they had successfully brokered 105 out of 133 land plots for the investor, Long Kim Phat Company. However, the project investor is currently giving unreasonable reasons and failing to fulfill its obligation to pay brokerage fees totaling over 6.3 billion VND. This includes a deposit of 1.05 billion VND, project service fees of 2.78 billion VND in August 2016 and 1.74 billion VND in September, and the remaining 763.65 million VND in brokerage fees that have been successfully brokered but not yet verified and invoiced.

Previously, during the real estate market crisis, in Ho Chi Minh City and many neighboring provinces, there were cases where real estate agents were denied commission payments by developers after the sale of properties. Even during the real estate recovery period in 2014-2015, many large developers withheld commission fees from agents, paying them in installments rather than settling the entire amount at once.

According to a survey by PV, sales commissions applied to real estate brokers in the real estate market vary widely. Land plot projects in Dong Nai offered for sale in the past three quarters had commission fees ranging from a minimum of 8% to a maximum of 13% of the product value.

In stark contrast to land plots, ready-built townhouses in the outskirts of Long An, Binh Duong, and Dong Nai (bordering Ho Chi Minh City) only offer a commission of around 6% of the property value. Meanwhile, brokerage fees for apartments in Ho Chi Minh City have dropped significantly, ranging from a minimum of 1-2% to a maximum of no more than 5%, depending on the segment (affordable, mid-range, or high-end).

The deputy general director of a real estate company specializing in selling land plots and ready-built townhouses in suburban areas stated that a commission fee of 10-13% of the product value is necessary to support sales campaigns for projects located outside of Ho Chi Minh City. This is because, within this 10-13%, the brokerage firm must allocate 2-3% to client acquisition and transportation costs; 2% to marketing expenses. The remaining 5-8% is used for employee salaries and remuneration, and for the development of the company's organizational structure.

"The project distribution unit needs funds to cover advertising, sales, and system maintenance. Therefore, the commission fee for land plots in suburban areas often reaches 40-50 million VND per product, and in some projects located further away, the brokerage fee can even reach 60 million VND per product," this person revealed.

According to VNE