KUCHING: It is common to drive down the roads of Kuching to see banners, flyers or even stickers promoting properties for sale. Indeed, Sarawak’s property sector is booming and is still growing strong.
Perhaps you know of friends or family helping other parties in selling their homes or properties on their behalf as brokers, taking a small cut from the price as payment.
Not many are aware that this practice is illegal. Only registered estate agents or registered negotiators are allowed to transact properties for a fee.
“Anyone who acts in contravention and upon conviction, can be fined up to RM300,000 or jailed for up to three years or both. This rule is already enforced and it is a serious offence if not adhered to,” said the Board of Valuers, Appraisers and Estate Agents Malaysia (Bovaea).
Worse still are those who know these facts but go on with eyes closed!
The issue here is that these brokers – meaning those practising real estate without employment with an estate agency firm – grow in numbers.
This is just the tip of the problem as complains surface from consumers regarding brokers cheating money from consumers via these illegal transactions.
These were some of the problems highlighted by Bovaea having had received numerous complaints as to such malpractices.
Deputy Minister of Finance Datuk Ahmad Maslan recently said the government is aware that the number of complaints has risen over the years where the public has been cheated, misrepresented and misled in this aspect.
In a step towards combatting this, new requirements have been introduced for all real estate negotiators.
All negotiators will now need to go through a two-day structured course designed by Bovaea, in collaboration with Malaysian Institute of Estate Agents (MIEA), Royal Institure of Surveyors Malaysia (RISM) and Persatuan Penilai, Pengurus Harta, Ejen Harta & Perunding Harta Swasta Malaysia (PEPS).
With the certificate of attendance, these real estate negotiators can apply to the board, through a registered estate agency firm. A maximum of only 30 negotiators are allowed to be registered under each real estate agent.
Each negotiator will be issued an authority tag with an assigned identification number which he or she will need to wear at all times when carrying out work as a negotiator.
The rule also requires that all promotional material, including advertisements and signboards used by the negotiators, to carry their REN identification number.
“The idea is to recognise real estate negotiators and to issue them with identification tags has been long in the pipeline.
“This is important as Estate Agents and RENs are playing an important role in the real estate services sector which contributed close to RM90 billion in sales last year,” Bovaea president Datuk Hamid Abu Bakar said.
As the economy grows and property transaction increases, more and more property brokers are joining in the band wagon to deal with properties without the necessary understanding, knowledge and skills.
“The number of property brokers, meaning those practising real estate without employment with an estate agency firm grow in numbers and the board has received numerous complaints as to malpractices by these brokers,” Bovaea senior board member Faizan Abdul Rahman said.
Bovaea also stressed that the public had an equally important role to play and that they, when engaging the services of a real estate firm, must insist on seeing the identification tag of the negotiator and scan the QR code for verification.
The registration exercise is timely as the industry has been plagued by negative image caused by illegal brokers. Bovaea hopes that the Real Estate services sector will be able to maintain a high level of professionalism and also raise the standard of practice.
The registration exercise attracted 16,243 attendees since October last year and close to 10,000 RENs are now registered by Bovaea and have been issued with a tag each.
Opinions from local observers
Local property specialists are optimistic this move will begin the countdown towards regulating the industry and aid in protecting consumers.
BizHive Weekly spoke with Travilion Group marketing manager Awang Saifeluddin, Malaysian Institute of Estate Agents (MIEA) Sarawak chapter chairman Wong Ho Ming (who is also Homing Estate Agency principal) and Simon Hii, principal of Simon Real Estate and also a member of MIEA Sarawak.
“It is important for buyers to know the truth about what they buy,” Awang stressed. “This is the reason why we have licenses.
“It is a testament to what we have learnt, what we have studied in order to be able to provide buyers or sellers with the right information they need as they sell or buy properties.”
Wong quipped that a licensed estate agent is governed under the Valuers, Appraisers and Estate Agents Act (Act 242) 1981 which dictates what estate agents and negotiators should and should not do.
“Anybody in Malaysia – if they want to do marketing for properties – they have to be registered with the board,” Wong stressed.
“People like us – principals of estate agents – under us we’ve got negotiators. Every negotiator is registered and also provided with a proper tag and number. Without that proper license, any other broker is illegal.”
The latest move by Bovaea to have negotiators registered with a ID tag and number, says Wong, will help the public distinguish who is legal and who isn’t.
This is in line with enhancing the level of transparency, instilling integrity and to uphold standards of practice among the professionals representing the industry.
It is envisaged that with the new system cases related to brokers are expected to reduce significantly.
‘No responsibility’
The main problem with these unlicensed brokers, explains Hii from Simon Real Estate, is that they have no responsibility to their client to be fully transparent and honest during transactions.
This is compounded by the fact that this industry is still growing in terms of regulation and enforcement.
“We received a lot of complaints of illegal brokers putting up houses for sale. They are not allowed to publish their contact details if they are not authorised.”
MIEA’s Wong explained that without regulation, unlicensed brokers may jack up the selling price of properties they deal with.
“A house going for RM100,000 for example may be sold for a price of RM120,000 and the broker pocketing the RM20,000 difference,” he cited as an example. “For registered negotiators and agents, we’re only allowed a fee of three per cent.”
Sometimes, Hii said, these brokers can take two sides of agency fees – such as two per cent from buyers and three per cent from sellers.
“We are not allowed to do that. we only take one side commission,” Hii explained. “When a consumer appoints you to help sell or buy properties for him/her, you must act on behalf of that person and that person only.
“If that person is a buyer, you represent the buyer. If you represent the seller, then that is it. You cannot do both.”
Illegal estate agents also may hide the truth on crucial detail in certain transactions. For example, Hii recalled stories of customers buying land without its land title issued yet pursuing the sale as their brokers told them “not to worry as it will be issued soon.”
“So, some people are tricked into buying the land while waiting for the land title but may end up waiting for 10 years without receiving it,” Hii said. “They just want to make the quick money to sell the land. Professionals will warn you of these things.”
These illegal sellers often just deal via nicknames and not their full names, he added, because they’re hiding something.
“There should be more transparency to protect buyers and sellers. They need to know exactly what is happening.”
Proper valuation
Awang from Travillion added that as a licensed estate agent, they are authorised to give proper estimation of the value of the property as opposed to a broker.
“Industry experts have been in the market for so long and have conducted many transactions. We can give better advice for the people on the proper pricing,” he told BizHive Weekly.
“Many times, people wonder why properties are going at higher prices and consequently want to increase the price without understanding the actual value of the transaction of the properties around that particular area.
“I think by going for licensed estate agents, they can be better informed.”
In return, consumers can sell or buy properties faster and in a more efficient manner, he affirmed.
Need for easier access to education
There is, however, a crucial need for easier access to education for brokers or negotiators who want to become proper estate agents.
“This issue has been going on ever since the industry existed,” Hii recalled. “Many years ago when I started working with properties – even before the board existed – licenses were being issued to those practicing in the industry.
“At that time it was our bread and butter. There were plenty of brokers back then as well, going as far as setting up their tables at staircases selling house or even out in the coffee shops!
“Then, Bovaea was formed and gave out licenses based on years of experience as a gauge of their worthiness. This is why many of us who have been in the industry for a period of time got our licenses without the “proper education”.
The same cannot be said for the newer generation, Hii observed. Today, the path to becoming a licensed estate agent requires one to take two parts of the Estate Agent Examination, which requires a minimum entry qualification of minimum in SPM/MCE with three credits and two passes.
Passing the aforesaid exam of two parts will grant make you a probationary estate agent. At this point, you will need to work full time with a licensed real estate agency for a minimum of two years, submitting work diaries along the way.
Upon completion of this stage, probationary estate agents will need to submit two task papers to Bovaea and pass an interview with the board before being granted the title of licensed real estate agent.
Travillion’s Awang said taking this exam was no easy task for Sarawakians as only Open University Malaysia (OUM) offer the said course here.
The lack of students progressing beyond Part 1 Exam, he said, also caused a delay for Part 2 exams as the minimum student quota could not be met for OUM to host the Part 2 course.
Many dedicated students have moved to Peninsular Malaysia to pursue the course further but at their own expenses.
Selling houses on social media
KUCHING: Anyone using Facebook will likely have come across the occassional friend posting about second hand homes for sale. This scenario is very common. In fact, there are even groups on Facebook pooling resources and information about residential houses up for sale.
A quick glance at postings within these groups reveal a healthy amount of questions and queries from locals seeking residence in selected housing areas. Some have also posted new residential projects furnished with in-depth details.
Welcome to the new era of marketing, propelled by the Internet!
Charles Liew, an industry observer, notes that it is very easy for individuals to reach out to the masses themselves through Facebook as a marketing platform.
“Traditionally they would have to advertise through newspapers or magazines, word of mouth and you need to approach them one by one,” Liew told BizHive Weekly in an interview.
“Facebook breaks down the marketing channels. You just need to put it there and everyone can check it out. It is that simple.”
Some have gone as far as to create groups on Facebook to attract and pool members selling or buying properties to put up their postings there.
Nevertheless, Liew forewarned of a tradeoff between quality and quantity of feedback with these transactions.
“On Facebook, you can get perhaps 100 likes for the photo of your property you posted, and perhaps several enquiries – but often find it hard to close a sale with that channel,” he explained.
“I still see tremendous value in engaging a property agent, and here’s why: Most people don’t know how to sell on Facebook.
“We get a lot of feedback, but not to many of quality. Property agents know “quality people” — people who are actively looking or are ready to buy then and there.
“These agents can filter through their database of buyers or sellers. They would be able to get, say 10 interested people in two weeks as opposed to posting for 10 months on Facebook.”
Liew affirmed that Facebook is a tool that is powerful, but sadly not many people know how to fully utilise it to its best.
“Based on my experience posting properties on Facebook, I got about 40 to 50 likes for it.
“Replies were fantastic whereby people were messaging me for details but these never amounted to property viewings or inspections arranged which is usually the next step.”
His advise to the public would be to gauge your level of urgency in selling or buying properties and if yes, engage in the services of a real estate agent for best results.