K. Soma Sundram, a Registered Estate Agent with 36 years of experience, serves as the Corporate Strategic Advisor. He authored this article.
The real estate industry in Malaysia plays a crucial role in the economy, directly influencing individuals and businesses through its ownership and property transactions.
Apart from developers, contractors, conveyancing lawyers, bankers, valuers, surveyors, and all others involved in the industry, there is a key group contributing to the industry’s growth: real estate agents, whom I term real estate practitioners.
There are the Real Estate Agents (REA) – those who have passed the real estate exam and registered with the Board, Probationary Real Estate Agents (PEA)- those who have passed the exam and undergoing practical training, and Real Estate Negotiators (REN) – those who are employed by real estate firms as salespeople and certified by the Board of Valuers, Appraisers, Estate Agents and Property Managers [BOVAEP].
As real estate professionals, they are legally empowered by the laws of this country to provide their service delivery efficiently, competently, and in the best interest of their clients.
In a world where money has taken precedence over moral principles, values, and ethical standards, adhering to these codes becomes increasingly important in our practice.
This will help maintain a sense of responsibility and professionalism when dealing with the public. Financial enrichment should not overshadow the ethical responsibilities towards the public.
As practitioners, we should continue to build trust and maintain the profession’s overall reputation.
As such, this article aims to instil in the minds of all concerned that it’s not only the responsibility of those delivering the service, but more importantly those seeking such services – it’s a shared responsibility.
Table of contents
Understanding the Real Estate Industry
The real estate industry is a complex and multifaceted field that involves buying and selling properties and providing related services.
It is a significant sector of the economy, with property transactions valued at RM232.30 billion, involving 420,545 transactions in 2024.
This marks the best year in the property market’s performance in our country’s history.
The industry is driven by supply and demand, with contributing factors such as economic performance, interest rates, unemployment rates, inflation, government policies, and demographic changes influencing the real estate market, etc.
Real estate professionals serve as the bridge between developers, clients, and landlords, playing a crucial role in facilitating transactions and providing expert guidance.
While discussing professionalism among practitioners, the real estate practice in Malaysia is seriously marred by illegal brokers who have tarnished the image of agents’ good work.
If you go out to the field, you will come across thousands illegals with land deals, a shop, a house or even a business for sale.
They will not have clear documents, facts on the property, or appointment letters and may have received the information through third parties. who will always hike up the price to benefit themselves.
They cannot be held responsible for their misrepresentations or the provision of misleading information, nor can they be held accountable for any mismanagement of funds.
These are the ‘vultures’ in the profession who take advantage by engaging in real estate activities illegally.
The alarming fact is that for every 1 real estate agent, it is estimated there are 1,000 illegal brokers.
The law is not effective enough to eliminate them; as such, the best advice for the public is to engage a real estate firm through a REN to market your property, and you can sleep well through the night.
The Need to Maintain High Ethical Standards in Real Estate Practice
Real estate is about dealing with people’s lives and their finances. It’s about enriching the lives of those who have invested in it, not enriching ourselves at the expense of others.
Practitioners are challenged daily by the lure of money and have a significant role to play in addressing the often-perceived scepticism that arises from the nature of sales, which is frequently associated with manipulation and dishonesty.
As Judge Service, an established organization in customer service improvement, states, “Sales, as a profession, often suffer from a negative reputation.” However, real estate agents deserve professional recognition due to several key reasons:
- Collaboration with Other Professionals – Real estate agents work closely with professionals from various fields, including banking, financing, and the legal practice, requiring them to operate at the same professional standards.
- Legal Recognition – Many jurisdictions have specific Acts that recognize real estate professionals, granting them the authority to act officially.
- Specialized Knowledge and Training – Real estate is a specialized field that requires extensive training, certification, and relevant work experience.
- Public Trust and Market Standing – A well-established ethical framework enhances the profession’s status and fosters confidence among clients and the general public.
THE CODE OF ETHICS FOR REAL ESTATE PROFESSIONALS
Ethics, derived from the Greek word “ethos” meaning “character,” is the study of moral behaviour and principles. Ethical behaviour in real estate ensures fairness in dealings with clients, colleagues, and the public.
The real estate profession is guided by core values or a code of conduct & ethics, which outlines the professional responsibilities of all practitioners.
The Code of Ethics in real estate emphasizes honesty, transparency, and professionalism.
Below are some of the key ethical principles that agents must uphold:
A. KNOWLEDGE OF AND COMPLIANCE WITH THE LAW
To constantly acquire knowledge and new skills & conversant with real estate laws
B. CLIENT INTERESTS FIRST
Agents must always prioritize and protect their clients’ interests first
C. ALWAYS ACT PROFESSIONALLY
Act professionally in all dealings
D. AVOIDANCE OF CONFLICTS OF INTEREST
Agents should not provide professional services if they have a personal or financial interest in a property unless fully disclosed
E. PROFITEERING
Avoid dealings for personal financial gain & seeking to make unfair profit
F. HONEST AND TRANSPARENT
Agents should refrain from exaggeration, misrepresentation, or withholding important information
G. FINANCIAL ACCOUNTABILITY
To ensure financial integrity, client funds must be managed well and held in the firm’s clients’ account
H. ACT RESPONSIBLY BY BEING ETHICAL
To uphold values of fair and good practices
I. WRITTEN CONTRACTS
All contract details should be documented in writing, with copies provided to all involved parties.
J. PERSONAL INTEREST & CONFLICT OF INTEREST
Must declare any personal or financial interest in the transaction
Conclusion on the Real Estate Market
Many consider real estate practice a business but disregard the fact that it’s a professional practice. It requires a strong ethical foundation that benefits all parties involved in real estate transactions.
Ethical agents earn the trust of their clients and contribute to a fair and reputable profession. Upholding ethical values ensures long-term success and respect within the real estate sector while also building a lifelong customer base.
Real estate is a career that offers tremendous growth and development opportunities, but only when practised with integrity.
In a profession where financial incentives can sometimes lead to ethical dilemmas, real estate professionals must remember that long-term success is built on honesty, transparency, and adherence to ethical standards.
In the same context, the public at large should also expect such a level of service from the practitioners.
Isn’t it exciting to make money the ethical way and be respected in what you do?
If you’re interested in becoming a successful agent, don’t hesitate to join our amazing team! “Integrity is not a given factor in everyone’s life. It is a result of self-discipline, inner trust, and a decision to be relentlessly honest in all situations in our lives” John Maxwell
