The Wilful Sunflower

I came into this industry not knowing anything. Now, a year later, at least I know enough to answer basic queries over the phone. And, as I keep on getting the same questions over and over again, I might as well write down the answers. This might be especially helpful for those of you who are planning to purchase a house.

• When I started, I thought estate agents were estate agents, and that was that. Actually, there are two types of people in real estate. Well, maybe three. The real estate agents, the negotiators, and the "illegal estate agents".
• The difference between estate agents and negotiators? Basically, estate agents are the bosses and own the estate agency firms. They employ negotiators to work for them as salesmen. Negotiators are paid a nominal basic salary and earn commission from the agency on every sale. Often, the people who show you houses are negotiators, not estate agents.
• Estate agents need to obtain an "authority to practice" (basically a licence) from the Board of Valuers, Appraisers and Estate Agents (Lembaga Penilai, Pentaksir dan Ejen Hartanah). This licence is renewable annually. Those who do not have the authority to practice are considered "illegal agents", operating outside the law. To check whether an estate agent is bogus or not, go to the Board's website at www.lppeh.gov.my. (Negotiators are at present not required to be registered.)
• The Board is a government body set up under the purview of the Valuers, Appraisers and Estate Agents Act 1981. It comes under the Finance Ministry. If you have any complaints about unethical practices by estate agents or negotiators, you can forward your complaints in writing to the Board. (Although I cannot vouch for the speed of the investigation...)
• The amount of commission (or "professional fees") payable to estate agents are all set out in the Act (the Valuers, Appraisers and Estate Agents Act 1981 which I mentioned above). Basically it's a maximum of 2.75%. If your property or land costs more than RM500,000 then it's 2.75% on the first RM500,000 and 2% on the residue. For tenancies of 3 years duration or less, the maximum fee is 1.25 months' gross rental.
• And, since every week at least five people ask me, "How do I become an estate agent in Malaysia?", the answer is: You have to take a course in estate agency that is recognised by the Board, and, after that, work as a probationary estate agent for two years under an established estate agent. Following this, you will sit for the professional competence test administered by the Board and attend an interview with them in order to obtain your "authority to practice". All in all, this process can take about 4 years. If you want to know more, please contact the Board at 03 2273 7839.

This has been a public service announcement by The Wilful Sunflower.