Parting with our life savings to buy a house is daunting enough for most of us. Add on the unfamiliarity of the process and legwork involved, we simply need a guide through the maze. Similarly, if you are selling your property, the paperwork and process may not be as straightforward as you think. One question to consider is: do we or do we not enlist the help of an estate agent?
When to enlist an estate agent
Reapfield Properties Sdn Bhd head of sales Matt Tian tells EdgeProp.my that in most cases, the commission paid to the estate agent is borne by the seller.
“If the buyer also engages an agent to look for a house to buy, and the deal goes through, the seller pays the commission and both the agents share the commission,” Tian explains.
Most people hire an agent because it saves them time and the headache of dealing with potential buyers.
“Some agents spend time on research. They do their homework. They study a development thoroughly and pick up points such as which units in the project have added value. Some units come with better views, better frontages, better locations or better layouts.
“Another added advantage of having an experienced agent is that he or she can secure a better deal or package tailored specifically to his or her client’s preferences — something that developers may not offer to ordinary buyers,” says Tian.
The nature of the industry is such that agents get paid only when a sale is made. Thus, most agents will compete and try to provide their best services. Some may even go the extra mile to assist buyers and provide them a whole spectrum of property-related services including gathering of product information, product analysis, pricing, selecting of units, applying for a mortgage, insurance, defects checking and even assisting in getting tenants.
Meanwhile, the president-elect of the Malaysian Institute of Estate Agents (MIEA) Lim Boon Ping tells EdgeProp.my that real estate agents are more familiar with the process of buying and selling, and will ensure a smoother transaction experience.
“It really takes away a lot of hassle from the owner because the owner need not follow up every day with the buyer — all these are handled by the agent,” says Lim.
“On top of that, when you engage a registered estate agent, should there be anything that goes wrong with the deal, you can always report to the Board of Valuers, Appraisers, Estate Agents and Property Managers. Also, you are covered under the Professional Indemnity Insurance,” Lim adds.
Besides these, Reapfield’s Tian also notes that some agents specialise in certain areas and know the history and progress of a neighbourhood well.
“Experienced agents will be able to advise buyers about the pricing and indicative future value, as well as provide information about the factors that will add value into a neighbourhood in the future. They could also assist buyers on the mortgage and valuation, since they would have been dealing with bankers and valuers for many similar properties in the same neighbourhood with their track record and past transactions,” says Tian.
Lim concurs, adding that real estate agents are experienced negotiators and will try their best to get the best pricing for both the buyer and seller.
When you can do it yourself
Despite the benefits of a real estate agent or negotiator, some owners may prefer to conduct a sale on their own.
Obviously, one of the biggest upsides of concluding a sale or rental on your own is the cost-saving you get from not having to pay the commission fee to an agent.
However, MIEA’s Lim points out that in Malaysia, an agent’s commission fee is capped at a maximum rate of 3%, unlike in other countries that go all the way to 6% and 8%.
“An agent’s role is not only limited to during the signing of the sale and purchase agreement. You have to account for the time they take to do the marketing, negotiating for the best deal and following up with the respective buyer after the signing has taken place. This will take more than a few months to conclude. Some agents even work on a deal for a year,” says Lim.
Nevertheless, Tian notes that there are times when not having an agent may work in the homebuyer’s favour.
For instance, some developers or sellers may pass on to buyers the portion of commission that is supposed to be given to the agent, in the form of additional discounts or rebates to buyers.
Some sellers may also find it less complicated and more time-efficient to handle their own sale, especially when they encounter inexperienced agents who may provide wrong information on the property or misrepresent their client’s expectations.
On top of that, Tian says, a seller could also be less pressured to conclude a deal faster than they want to, as there won’t be agents or negotiators constantly pushing them to make a decision. “Some people may prefer to have a more relaxed decision-making process,” he adds.
At the end of the day, all we want is a smooth sales process. Hence, even if there is an agent involved, one must ensure that he or she is a professional registered agent or negotiator with a good track record.
Why engage a real estate agent:
- Smoother selling and buying process
- Agents’ expert knowledge of an area
- Save time on research
- Agents’ expert negotiation skills
- Protection under the Board of Valuers, Appraisers, Estate Agents and Property Managers
Why close your own deals:
- Save cost — no need payment of commission
- No risk of agents misleading you or the buyer
- Less pressure to close a deal quickly
This story first appeared in EdgeProp.my pullout on Jan 19, 2018. Download EdgeProp.my pullout here for free.
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