Protect Yourselves – Why use an estate agent?
Malaysian Institute of Real Estate Agents (MIEA) Q&A
This Q&A series appears in the Metro Classifieds of The Star monthly. Here we feature some of the more popular questions asked by property buyers and home owners.
Q. How do I identify legal and registered estate agents from illegal agents who don’t belong to any estate agency? How much should I consider paying a legal agent in professional fees? Ffrom Shanker, Petaling Jaya
A. It is important that you be able to tell who the illegal agents are to avoid involving yourself in any property deals or transactions with them. Not only are they doing this illegally but also, you don’t stand to benefit either, especially since some of them have been known to just run off with their customers’ earnest deposits.
In such cases, you may bring your complaint to the Board of Valuers, Appraisers and Estate Agents but bear in mind that these illegal agents are not registered and as such, are more difficult to track down.
The information below should help you identify illegal agents and give you an idea on the amount of professional fees required in any property dealings.
1) From just reading the newspapers, how do I identify the legal agents?
The Valuers, Appraisers & Estate Agents Act, Rules & Guidelines govern rules on advertisements taken out by registered estate agents in the newspapers. They must have the following:
* “E” number of the agent, e.g. E(3)111
* Telephone number of the agency
If you see advertisements without an E number and with only the mobile phone number listed, then it is better to check whether these are registered agents.
2) Who do I check with? You can check with the Board of Valuers, Appraisers & Estate Agents; their office is in Plaza Sentral. They are the body governing all estate agents in Malaysia under the Ministry of Finance. They are also in charge of renewing the licences of all registered estate agents. Alternatively, you can also ask for help from the Malaysian Institute of Estate Agents, a recognised body representing all estate agents in Malaysia.
3) Who are registered estate agents? How are they different from the people who claim that they are agents too?
Registered estate agents are authorised to practise with approval from the Board of Valuers, Appraisers and Estate Agents. They have passed the examinations given by the Board, done a two-year practical course and gone through an interview with the Board before being issued a licence to practise. These registrants, if they want to practise, have to set up a proper office and operate from there. They are allowed to employ negotiators who will work under their authority to practise. People who claim that they are agents must be employed by a registered estate agent to be legitimate. Those who claim that they are ‘freelancing’ or are just ‘brokers’ without attaching themselves to an agency are illegal.
There have been cases in which these so-called ‘agents’ claim that their friends or relatives have given them properties to handle, thus this makes them estate agents too. They are NOT agents if they are not affiliated to an estate agency and they are collecting commissions illegally. It is not uncommon to hear stories of buyers or sellers who chose to deal with these people and were eventually cheated of their deposits and the “agents” could not be traced.
4) Who are negotiators? ? Negotiators are people who are employed by registered estate agents. They are allowed to mediate between the seller and buyer and if the transaction is successful, they will charge a professional fee.
5) Who pays the professional fee? The person who engages the estate agent to sell or source for the property will pay the fee. Normally it is the seller who will pay the estate agent for selling his or her property. In some cases, however, some tenants or buyers will retain an estate agent to look for properties for them, say a condominium unit in Mont’ Kiara or an office space in town with certain specifications. In such instances, the party who retains the estate agent may pay the agent the professional fee to source properties exclusively for them.
6) How much professional fee should sellers pay? ? Under the 7th Schedule of the Guidelines, professional fees payable are 2.75% on the first RM500,000 and 2% on the balance of the transacted price. This means if the property is RM600,000, then the professional fees are calculated based on 2.75% of RM500,000 and 2% of the balance of RM100,000. Estate agents cannot collect from both the seller and buyer but only from the one party who requested their services.
7) I have come across ‘agents’ who work exclusively in one area and seem to have a lot of listings. Do I deal with them?
Usually these ‘agents’ are people who have made friends with the owners as they hang around a certain development area and as such, these owners will choose to pass their properties to them. In fact, owners should be more discerning and ensure that these people are attached to a real estate agency. Even though they may be your friends and you may allow them to handle your property, in case the transaction goes sour or in cases where earnest deposits are involved, you do not have a registered company to get legal recourse.
You can complain to the Board of Valuers, Appraisers & Estate Agents but keep in mind that these agents are not registered with the Board. It is therefore imperative that buyers and sellers be aware of the dangers. If you find that they provide good service, urge them to attach themselves to an agency to protect both of you. If they are seriously interested in the transaction of real estate, they should do it the legal way.
8) What about signboards? Given the fact that there are so many put up sometimes, how do I weed out those that are illegal?
Signboards are again subject to the rules and guidelines of the Valuers, Appraisers & Estate Agents’ Act. Signboards have to conform to a certain size, with the agency’s name, telephone number, the E number, the Board’s logo and if the agent’s name appears, the mobile phone number. Estate agents must seek the permission of the owner before putting up the signboard. If you see a signboard with only the mobile phone number and with or without a name, it be put up by either the owner or an illegal estate agent.
9) What about those who set up stalls at completed projects and claim that they have units for sale and for rent?
Usually, these are illegal agents. Estate agents have to set up a proper office. If they had been appointed by the developer, they would have obtained a proper office. Those who set up a desk with an umbrella –without approval from the developer – are definitely illegal agents.
It is estimated that there are a large number of illegal agents in the country. The Malaysian Institute of Estate Agents would like the public to be protected against this menace and as such, will publish articles periodically to educate the public against using illegal agents. Even if the person is your friend, as long as he or she is not attached with an estate agency, their transactions without an authority to practise are considered illegal.
Source :The Star 20/06/2007 Close Window