For most people in Malaysia, hiring the right real estate agents go hand in hand with property investment. They help you when you are looking for a new home, are buying a property, are selling a property, or are investing in a property for the future.
Real estate is a complicated business and plays a large role in a country’s economy. Agents make it their life’s work to understand the real estate market and capitalize on it. That’s why you need a good real estate agent who can help you get the dream house you want or get a fruitful investment.
The first step is to know what to look for and what to do; that’s why we give you 5 facts you should know before you hire a real estate agent.
Table of contents
1. RENs vs. REAs: A Simplified Guide
Real Estate Negotiators (RENs) and Real Estate Agents (REAs) are often confused. While they both work in the real estate industry, there are key differences.
Real Estate Negotiator (REN)
RENs are like apprentices. They need to be registered with BOVAEA and work under an REA. They’re often gaining experience to become REAs.
Real Estate Agent (REA)
REAs are fully qualified professionals. They have more experience, knowledge, and education. They can start their own agencies and hire up to 30 RENs. To keep their license, they need to take yearly training courses
2. There are different types of agents
Just as there are different types of properties, there are different types of agents and agencies too. Each has its own job scope and rules they must follow. Be sure to know and understand the arrangement with your agent to avoid any disputes later.
The types of agents are:
- Exclusive agents: Where only one agent is appointed to sell a property. The owner cannot sell on their own.
- Sole agents: Similar to an exclusive agent but In this case, the Owner reserves the right to sell the property on their own.
- Joint agency: Where the owner may hire two or three agents to sell the property. The number of agents the owner may appoint is, however, limited and all the agents must be made aware of the appointment of their counterparts.
- Sole Joint agency: Where the estate agent and the owner work together to sell the property and divide the profit based on a prior agreement.
- Ad hoc/ General: Also called an ‘open listing.’ In this case, the owner may appoint any number of agents. All appointments must be in writing.
3. Hiring an agent is like hiring any employee
Whenever you hire someone to work for you, you always take steps to make sure they are right for the job. Hiring a real estate agent is no different. The role of an agent is to help you with your property investment and you deserve the best when it comes to this.
When you hire an agent, you should meet them and ask questions, similar to an interview, and perform something like a background check. Some important facts you should look into are:
- Their portfolio
- Their experience with dealing with the type of property you are assigning to them or looking to buy/rent
- Recommendations from family, friends, and associates
Read more
4. The standard fees of an agent
The standard fees for services rendered by a real estate agent registered by the BOVAEA in Malaysia is as follows:
Sale or Purchase
- Land and Buildings: A maximum of 3% of the sale price of the property
- Chattels including Plant and Machinery – 10% of the proceeds
For the Sales and Marketing of projects by registered estate agents, the fees need to be agreed between the estate agent and the client.
These fee scales do not apply to the sale of foreign properties in Malaysia or the sale of Malaysian properties in foreign countries.
Lettings
| Up to 3 years | 1.25 months of gross rental |
| Exceeding 3 years up to 4 years | 1.50 months of gross rental |
| Exceeding 4 years up to 5 years | 1.75 months of gross rental |
| Exceeding 5 years | 1.75 months of gross rental |
| Exceeding 5 years (without an option for renewal) | 1.75 months of gross rental |
| Exceeding 5 years (with an option for renewal) | 1.75 months gross rental + 0.25 month rent/year |
Minimum fee: As above, but may be subject to a maximum discount of 30% or a minimum fee of 1-month rental.
For tenancies for less than one year, the fee is calculated on a pro-rata basis. The above scale does not apply to serviced offices or apartments.
Rent Reviews – 50 % of the fees chargeable under lettings
Additional Claims
In addition to the fees stated above, an agent may claim:
- The cost of printing, plans, copies of documents, lithography, traveling (only where the distance between the estate agent’s office and the property is more than 40 km), and other expenses actually incurred;
- The cost of media advertisements, signboards, brochures, and other promotional material.
However, these additional claims cannot be made by the registered estate agent without the prior knowledge and permission of the clients.
5. Their marketing plan
When you hire an agent to sell your property, you should ask them how they plan to market your property and give you feedback on the progress of the sale. Do they plan to advertise through social media, conventional media, banners, brochures, or email marketing?
Ask them to explain their plan to you and make sure you understand each aspect of their plan so that you are satisfied that the agent is doing you and your property justice.
And there you have it. With these facts, you can now make a more informed decision when you are looking for a real estate agent to help you in your property transactions.
IQI Global is one of the leading real estate agencies in Malaysia, with some of the best property experts in the industry. Need some help in hiring the right real estate agent? Drop us your details and we’ll get to you as soon as possible!
