The resurgence of the real estate market in Malaysia and the uncontrollable growth of brokers in the 80s saw the need to regulate the estate agency practices and at the same time, protect the public from malpractices and frauds.
Act 242 was passed in Parliament in 1981. The purpose of this act was to provide a Director General of Valuation and Property Services and to register valuers, appraisers, and estate agents. As a result, the Estate Agency profession came into existence. The Board of Valuers, Appraisers & Estate Agents (BOVAEA) adopted the Rules in 1986 with Ministerial approval.
BOVAEA has been registering Real Estate Negotiators (REN) since 2014, and there were 1,938 licenced estate agents (REA), 658 probationary estate agents (PEA), 20,500 real estate negotiators (REN), and 990 real estate agencies as of August 2016.
Understanding the different terms is important. We have come up with a list to help you differentiate between the four.
Who is a Real Estate Agent (REA)?
- Have passed and undergone a two-year Executive Diploma in Real Estate Agency.
- Have completed two years of post-practical training with a valuer or real estate agency firm.
- Have completed tasks 1 & 2 and have passed the test of professional competence (TPC) with BOVAEA, after which their names will be placed in their registry.
- An estate agent can operate his/her own real estate firm.
- Able to provide real estate services in selling, leasing properties or finding a property for the clients.
- Can employ up to a maximum of 30 (RENs) to assist the real estate agent in providing real estate services.
Who is a Real Estate Negotiator (REN)?
- A real estate negotiator is an individual who has attended a two-day course called the Negotiators Certification Course (NCC).
- A REN will need to seek work under a registered agency and submit their application to be registered and certified as a “real estate negotiator”.
- BOVAEA will certify and designate a REN number and issue a tag to the REN for identifying purposes. This tag must be worn by them whenever they carry out their agency’s services. The public is strongly advised to ask for this tag before engaging with estate negotiators to represent them in a sale or renting of their properties.
Who is a Probationary Estate Agent (PEA)
- A Probationary Estate Agent or PEA have passed Part 1 and 2 of the Estate Agents Examination and has a Diploma in Estate Agency.
- Has registered with BOVAEA as a Probationary Estate Agent
- Is undergoing 2 years practical training with a registered estate agent and will be attending an oral interview before they are eligible to register as a Registered Estate Agent.
Who is a “Broker”?
- “Brokers” are untrained individuals who carry out the works of an accredited real estate agent illegally and their knowledge of the market and industry are mostly based on hearsay and are unreliable. They are also unregulated by the government and do not follow the set of scale fees that are prescribed by BOVAEA.
- Under Section 30 of the Valuers, Appraisers and Estate Agents Act 1981, anyone who commits this offence is liable upon conviction to a fine not exceeding RM30,000 or imprisonment not exceeding 3 years or both.
What to look for in a Property Agent or Negotiator
Shortlist a few EAs, PEAs or RENs
Seek personal opinions or recommendations from family, friends and neighbours. Compare them based on statistics like how fast they will sell and how close they are to reaching the desired amount. If you purchased your house from an estate agent, do not feel obligated to hire them because they did a fantastic job.
Approach a few real estate agents and act as if you are hunting for a home close to yours. Examine their selling abilities to see if they are skilled and capable.
A good agent will still answer your call if they miss it, no matter how busy they are. They will contact you anytime a successful offer arises, whether it is for buying, selling, or renting. They will keep you up to date on everything, even though you do not ask.
Decide straight away how you will interact with each other. What sort of medium will be used, and how frequent do you want to hear from your agent? Call, Whatsapp, text, or all of the above? From the beginning, there should be some form of consensus and both sides should treat the sale as a team.
Also, observe how the agent responds to you and communicates with you. If the agent has failed to follow up or is sloppy with emails and texts, the agent could be inefficient with dealing with potential buyers, especially after you have hired him or her.
Hunger & Ambition
You should employ estate agents who are able to make time for whatever contract, large or small. This demonstrates humility and demonstrates that they can relate to the ordinary citizen. You need an agent who can go to the edges of the earth, contacting prospects and aggressively chasing all offers. This are the people who can meet the best customers at the right price to be the most effective in their endeavours.
Is your house an expensive or unique property? You may want to hire a real estate agent who specialises in homes similar to yours. Look for agents that are listing houses that are close to yours on the internet.
Honesty & Integrity
Some agents will try to get your business by offering a low commission fee or a high market price. Some agents will offer you a high valuation and make you believe you can get a better deal with them, just to continue and talk you down after you have decided to work with them.
Estate agents will typically list the house at a reasonable price in order to close a sale quickly, which is why they will accept a low fee. They would rather make a fast buck than spend the time haggling for a few thousand bucks more when their commissions do not increase that much.
However, if an agent wishes to get referrals and maintain a positive image, they must put the client's needs first. Second, do some preliminary testing and trust your instincts. Choose the valuation that you believe is the most truthful and rational.
Do It Yourself
William Supple, author of How to Sell Your Own Home said, “Properly priced and advertised, a house sells itself.” There are an increasing number of property websites that allow you to list your home for sale. If you have the time to list it, manage calls and viewing with potential buyers, then by doing so, enables you to opt out of paying an agent’s commission, hence allowing you to sell the house cheaper than market price.
Just keep in mind that if you do not find the right deal, you can end up spending even more than you would if you hired an agent.
The views and opinions expressed in this article are those of the authors and not intended to malign any company, individual or necessarily reflect the official policy or position of any agency or organization. Focal Times is a subsidiary of Maxworld Consulting Sdn Bhd, a regional organization founded by a mixture of agile and experienced corporate finance, venture capital and industrial experts. This establishment focuses on sharing current banking affairs, latest property developments and updates and more.