Version: CN
Lately, there has been a surge in reports about real estate scams, with a wide range of deceptive methods that have resulted in many innocent individuals losing significant amounts of money.
Given the current landscape, where many people are searching for properties and even conducting real estate transactions online, scammers and cheaters have found a more “convenient” way to carry out their crimes.
Read on to find out what the most common types of property scams are, how to verify the legitimacy of your property agent, as well as tips on what to do if you fall victim to a scam.
1. Types of property scams
There has been a rise in real estate frauds, with scams that include:
- Houses being sold for lower than the market price with seemingly generous discounts, only to be revealed as impersonations of Malaysian government agencies or real estate developers.
- Criminals posing as property owners to sell or rent out homes, defrauding buyers or renters of their deposit or mortgage payments.
- “Buy 2 first, then sell 1” schemes, where the potential of a real estate project is exaggerated to convince buyers to purchase two properties, with the promise of selling one for a higher price once the project is completed. However, this often ends in disappointment, with the properties not selling at the expected price, leaving buyers with large debts.
- False claims of a “gateway” to affordable housing or loan solutions by the government, leading to victims paying an exorbitant “handling fee” to secure a home or solve loan problems.
- Deceptive advertisements and promotions, using false information or retouched photos to defraud deposits, with illegal real estate agencies refusing to refund payments for various reasons when issues with the properties arise.
- Concealing the true price of land or real estate transactions to earn huge profits, either by misinforming buyers or tampering with land deed information.
- Renovation scams, including unfinished work and contractors running away with deposits, or defrauding homeowners with lowball quotes.
It’s important to be cautious and conduct thorough research before making any real estate transactions to avoid falling victim to these scams.
2. How to verify the agent’s legitimacy
When it comes to real estate transactions such as buying, selling, renting, or investing, it is common to seek the assistance of a real estate agency. However, it is important to be cautious and ensure that the agency you are working with is legitimate.
Here are 5 tips to help you determine the legitimacy of your real estate agent:
i. Check the agent’s license
In Malaysia, there are two categories of individuals involved in real estate work, Real Estate Negotiator (REN) and Real Estate Agent (REA). An individual must pass the Negotiator Certification Course (NCC) and related exams to obtain a REN license, while registered real estate agents must pass the Probationary Estate Agent (PEA) exam, internship, and interview.
Only after obtaining the proper certification and license, can an individual legally offer real estate services in Malaysia.
In order to legally perform real estate work, a licensed real estate agent must display their license at all times. The license for a real estate negotiator is red, while the license for a registered real estate agent is blue.
The license contains the following details:
- Name
- Photo
- Identification number
- License number (e.g. REN 12345)
- Name of the real estate company
- Registration number of the real estate company
- QR code
- BOVAEA logo
If you are concerned about encountering an unlicensed real estate agent, you can request to see their REN license and scan the QR code on it. By doing so, you can confirm the legitimacy of the real estate agent by accessing the relevant website and reviewing all the information about the agent.
ii. Check whether the real estate company is registered with BOVAEA
Another method to verify the authenticity of a real estate agency is to check if it is registered with the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEA). To avoid falling victim to fake licenses, it is important to be vigilant.
You can go to BOVAEA ‘s website to check whether their real estate company is registered with BOVAEA, or you can call BOVAEA’s hotline 03-22876666 to inquire.
You can access the website by entering the relevant details of a registered company on the website.
iii. Check the agent’s license number
Apart from verifying the real estate company, you can verify the authenticity of a real estate agent by checking the license number of the REN or REA on the BOVAEA website.
This is the easiest and quickest way to do so, as only certified agents are listed on the BOVAEA website.
If the real estate agent is not displaying their license, you can ask them for their license number to verify their authenticity.
iv. Check the agent’s company name
A real estate agent must be part of a real estate company, and cannot operate on an individual basis.
You can confirm whether a real estate agent is affiliated with a particular company by checking the “Search for Firm” option on the BOVAEA website, or by directly contacting the real estate company.
v. Check the agent’s property listings
Real estate agents need to promote properties through different channels such as social media and distributing flyers to achieve a successful sale. As per BOVAEA regulations, real estate advertisements must include the following details:
- the electronic registration number of the agent,
- the name of the real estate agent,
- the REN number of the real estate agency, and
- a contact number.
If you come across any real estate advertisement that lacks the above-mentioned details, you should capture a photo as evidence and send it to BOVAEA for reporting. Along with the photo, you need to provide the location, date, and time of the advertisement as well as your name and contact number.
These are five methods that can aid you in verifying the credibility of a real estate agent. These techniques not only help prevent unpleasant experiences but also safeguard you from unknowingly engaging with an illegal real estate agent.
It’s worth noting that being an unlicensed real estate agent in Malaysia is punishable by law. According to Section 30(2)(b) of the Valuers, Valuers and Estate Agents Act 1981 (Act 242), if found guilty of practicing without a license, one can face a penalty of up to RM300,000 upon conviction, or imprisonment for up to 3 years, or both.
3. What to do if you fall victim to a scam
If you find yourself ensnared in a real estate scam, it’s important to stay calm and take the necessary steps to impede the scammer’s progress.
- Take prompt action to pause the transaction or transfer process, or temporarily suspend credit card and bank account services.
- Immediately inform the police and allow them to bring the scammers to justice.
- File a complaint with relevant government departments, such as:
- Board of Valuers, Appraisers, Estate Agents and Property Managers (LPPEH) for real estate agent scams.
- Ministry of Communications and Multimedia Malaysia (MCMC) for online fraud.
- Bank Negara for financial fraud.
- Construction Industry Development Board (CIDB) for renovation and construction scams.
- Malaysian Ministry of Trade and Consumer Affairs (KPDNHEP) for consumer fraud.
To ensure safety, you can engage a trustworthy real estate agency from a reputable real estate company to assist with property transactions for a seamless and pleasant experience.
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