Brokerage Practice Philippines

Project Selling and General Brokerage Comparison

You’re determined to break into the real estate industry. Good for you!  But as you learn more about the industry, you hear terms like Project Selling and General Brokerage and wonder if there’s really a difference. We’ve created a simple table below to help you decide where you really think you are better suited. Here’s a breakdown of the difference between the two:

In this table, we focus first on the differences from the perspective of an agent:

 

Salesperson – Project Selling Salesperson – General Brokerage
If working for a developer, they are usually referred to as “in-house agents” Normally referred to as “property specialists” or “real estate salespersons” (if PRC-licensed)
Generally given an allowance Generally, earns on commission basis only
Usually assigned a sales quota Normally does not have a sales quota
Works in an office with regular working hours Flexible working hours. Can work in an office or from home (depending on the arrangement with the broker or realty corporation)
Can either be regular or contractual employees Generally, no employee-employer relationship exists between the agent and the broker
Work is normally limited to selling. Documentation and transfer of titles is done by the developer Generally more experienced than in-house agents as they know how to take care of the documentation and registration for the buyer and seller.

If assigned to a broker working for a specific developer (i.e. an in-house broker), agent is usually limited to selling property of the developer only.

If assigned to a broker that works for (or owns) a realty corporation that is accredited with multiple developers, agent can sell properties of developers the broker is accredited with (i.e. “sell-all”)

Entitled to commissions

If under an in-house broker, commission rate is dictated by the developer.If under a “sell-all” broker, commission rate will vary per developer Rate is dependent on agreed arrangement with broker (rates are usually higher)
Must obtain DHSUD ( formerly known as HLURB) accreditation, regardless if agent is doing project selling or “sell-all”. Not required to obtain DHSUD ( formerly known as HLURB)  accreditation as long as properties being handled are FSBO (For Sale By Owner). Otherwise, both broker and agent must secure  accreditation in order to do project selling.
Must be assigned to a licensed broker in order to be able to sell properties
Under RESA law (RA 9646), a person can only be called a “real estate salesperson”, if they obtain a PRC (Professional Regulation Commission) license and is assigned to a licensed broker

 

Next, let’s look at project selling and general brokerage from a broker’s point of view:

 

Broker – Project Selling Broker – General Brokerage
Must pass the broker’s licensure exam in order to be PRC-licensed. Once the license has been issued by the PRC, the broker will be able to operate and manage a real-estate business, aside from selling and/or leasing properties.
Must undergo continuing professional education (CPD) courses
Answerable to the Real Estate Code of Ethics as required by the PRC
Must obtain DHSUD ( formerly known as HLURB)  accreditation, regardless if broker is doing project selling or “sell-all”. Not required to obtain DHSUD ( formerly known as HLURB)  accreditation as long as properties being handled are FSBO (For Sale By Owner).
If working for a developer, can only sell property of the developer.If working for a realty corporation accredited with multiple developers, can sell all properties the realty corporation is accredited with. Can sell / lease all types of properties.

 

In the case of project-selling, the broker (or realty corporation) should be accredited by the developer(s).

Usually assigned a sales quota Normally does not have a sales quota
Works in an office with regular working hours More flexible, can work from home. May optionally maintain an office if the broker owns the realty corporation.
Brokers have more freedom with their work arrangement with the developer or realty corporation.Does not have any employer-employee relationship with in-house agents. Generally, no employee-employer relationship exists between the broker and the agents
Work is normally limited to selling. Documentation and transfer of titles is done by the developer. More experienced than in-house agents/brokers in terms of general knowledge in real estate, as they know the required documentation and registration procedures for both the buyer and seller. They are more exposed to dealing with the BIR, the Assessor’s office, and the Registry of Deeds.
Entitled to commissions. Cannot share commissions with unlicensed real estate practitioners but can only give a “referral fee” instead.
If an in-house broker, commission rate is dictated by the developer.If a “sell-all” broker, commission rate will vary per developer Commission rates are typically anywhere from 3% to 5%.
Cannot use the salesperson of another broker without prior consent of the broker the agent is currently accredited with.

 

Hopefully, this will give you a better idea where you would like to focus on. Some people like to have a narrow focus in what work they do. If you fall under this category, maybe project selling is better for you as a start, or if you simply want to get your feet wet in the real estate industry. But if you like to have variety in what you work with, and like taking on challenges, then general brokerage may just be up your alley.