Whether it is for settling down, shelter, marriage and even investment, all of these are reasons for a person to buy a property. In this current day and age, searching for your dream house or residential property is as easy as typing in any web browser and going through the endless list of advertisements, however when it comes to actual viewing of the property, the purchaser shall encounter several entities in which they may declare themselves generally as an “agent” to the property.
These “agents” may come in several forms such as a Real Estate Agent, a Real Estate Negotiator and even a Broker. It is very important to distinguish between these three especially the latter during the process of engaging in a potential deal to buy your dream house. Failure to do so might cause a purchaser to end up paying more acquisition costs and some may even lose their money as they entrusted their money with an unqualified person. To differentiate between a Broker and a Real Estate Agent or Real Estate Negotiator, it is vital for us to discuss how a person qualifies to become a Real Estate Agent and a Real Estate Negotiator.
To become a Real Estate Agent, a person must endure a two year course in a qualified and recognised institution to obtain a Diploma in Estate Agency. Following their graduation, they must further undergo a two-year practical syllabus as a Real Estate Negotiator whilst maintaining a Log Book of their experience. During this tedious period, they will be observed by The Board of Valuers, Appraisers & Estate Agents Malaysia (BOVEA). If they are able to pass the final interview session by the Board, they will be recognised as a Real Estate Agent. They may later open up their own agency or join any established Real Estate Agency. A Real Estate Agent may gather up to fifty Real Estate Negotiators to be linked and registered under such agent. Unlike a Real Estate Agent, a Real Estate Negotiator is only required to attend a two-day Negotiator Certification Course and upon completion, they shall join a Real Estate Agency. Unlike its counterpart, a Real Estate Negotiator could not open up their own agency unlike a Real Estate Agent. Both Real Estate Agents and Real Estate Negotiators are obliged to wear their respective tags which consist of all their credentials. These agents are entitled under the law to collect earnest deposit and to hold client’s money as a stakeholder. If they fail to perform their task responsibly, they are answerable to both the law and the aforementioned BOVEA.
Upon appointment of a Real Estate Agent or Real Estate Negotiator, an agent is entitled to collect 3% from the Purchase Price as earnest deposit. This earnest deposit is considered as an agency fee. In order to provide the best services to their clients, these agencies have several unique appointments in which may limit and differentiate their services. Among the most common and sought after appointment by the agents are exclusive agents. Whereby there is only one agent appointed by the owner to sell their property. Vice versa, a non-exclusive appointment entitles the owner to appoint multiple agents to sell their property. Another common appointment is through co-agency or joint agency, where an agent may join with another agent in the same agency or another agency to sell the property. This situation normally occurs when one agent has a suitable property and the other agent has a suitable purchaser.
On the other hand, a Broker is a non-qualified person acting as an agent or a negotiator. Apart from being a non-qualified person, these Brokers are also normally not attached or registered to any Real Estate Agency. Therefore, they are not legally allowed to carry out any duty of a Real Estate Agent. Section 30(1)(e) of the Valuers, Appraisers, Estate Agents and Property Managers Act 1981 (Act 242) provides that any person caught doing such an act may be punishable by law, and may be fined and sentenced for imprisonment. A Broker normally operates in a more flexible manner and most of the time, is unsafe for both the Purchaser and Vendor. Therefore, dealing with a Broker is risky and dangerous. The offer might be too good to be refused and the deal may be too great to be passed on, however as a Purchaser and a Vendor, both of the parties need to be more aware and cautious to not fall into such traps.
To conclude, kindly approach the right and qualified agent when entering into a contract of sale and purchase of a property. It is helpful to be more cautious by asking for their respective tags and checking all their credentials. This is to ensure our right as a Purchaser or a Vendor is properly and adequately protected at all times.
Prepared by,
Azza Aiisar bin Anuar
Messrs Misyail Othman & Co
