It all started with a failed business opportunity. About four years ago, David Ong, founder and president of Reapfield Properties Sdn Bhd, was told that a representative of Australia-based Elders Real Estate was interested in meeting him to discuss a franchising opportunity.
Ong came very close to signing on the dotted line but a change in Elders’ leadership caused a shift in the direction of the company. The deal was subsequently aborted.
“I didn’t like the name Elders but I liked the person they sent to handle the negotiation,” jokes Ong.
That person was Gerard Kho, now CEO of Reapfield. It was Kho who alerted Ong to the change in Elders’ direction. Ong later told Kho that he would not go ahead with the deal if Kho decided to leave Elders.
“We work so well together that I took a chance and offered him a job even though I could only pay in ringgit. I think Kho accepted the job because he took pity on me,” says Ong with a laugh.
“The opportunity came at the right time as I was contemplating moving back to Malaysia. Ong and I have a lot in common, especially when it comes to business. We are both long-term planners,” adds Kho.
It has been a partnership that has worked well for them and for the company. Reapfield is one of the largest real estate companies in Malaysia, with 14 branches and some 900 agents.
Taking their partnership a step further, Ong and Kho have jointly authored a book, titled Thrust — Real Estate Riches: Boundless Opportunity, Infinite Knowledge and Immense Wealth. Launched on April 12, the book is targeted at real estate buyers and aspiring negotiators.
“We were so ambitious that we thought we could write it in two weeks. As it turned out, it took us 15 months and by then, our publisher was chasing us to complete the book,” Kho says with laugh.
He admitted the original intent was to brand Reapfield but the idea soon evolved into something more.
“We realised it would add a lot more value if we were to share the inner workings of the industry so that the public and aspiring real estate agents would understand the role of an agent and what is involved in running a successful real estate agency,” says Kho.
Ong, who has been in the real estate industry for close to 30 years, feels there is a need to educate the public as there are still misconceptions about estate agents despite the phenomenal growth of the industry in the last few decades.
“This is not an industry that people look up to. We are still not seen as professionals and this is a job for housewives and retirees. People don’t see the amount of work agents and negotiators put in behind the scenes,” says Ong.
He acknowledges that the level of professionalism in Malaysia is still not on par with other countries such as Singapore, Hong Kong and Australia, and there is a need to get agents and negotiators to that level.
“We have to add value to our service, do well in performance and delivery. If you don’t, even an illegal broker can do a better job than you. A real estate licence doesn’t mean anything if your service is poor,” says Ong.
He notes that the level of service in Singapore and Australia is so high that it isextremely difficult for subpar agencies and illegal brokers to compete. The duo believe a key reason why Malaysia is trailing in terms of professionalism and service is the lack of competition.
“If you look at the Singapore model, the regulations are more relaxed, resulting in multinational real estate companies coming into the market. People have to fight it out and compete to get business, thus elevating the standard. In Malaysia, the industry is heavily regulated and protected. It’s very difficult for an overseas real estate company to come in,” says Kho.
Liberalisation of the industry
They are thus thrilled with efforts to liberate the industry, which includes amendments to the Valuers, Appraisers and Estate Agents Act 1981. The amendment, which came into effect August last year, allows non-registered real estate agents to take up equity in property management, valuation and real estate firms.
“Liberalisation is a powerful thing and we embrace it as it will give our industry a chance to lift itself and grow,” says Kho.
“We have a very a fragemented market, where every agency is small in its own way because of limited resources. With liberalisation comes more resources and more money to invest to create a bigger and stronger company,” says Ong.
Competition will keep the industry on its toes by forcing agencies to up their game.
“There is no longer a protective fence for us. You either buck up or get wiped out. Customers and the industry will benefit from this and the first thing a customer will notice is the higher level of service. More people will see this profession as more than a sales job,” says Kho.
A changing industry
Over the past three to four years, gradual changes have been seen in the industry. One is the increasing number of people in their 30s or early 40s with relatively established careers joining real estate agencies.
“The property market has been good in the past few years and people have started to earn a decent income. That’s probably one of the big attractions. Our industry is no longer one of semi-retirees and housewives. With this new, younger crop, the level of service has improved,” says Kho.
Technology too has started to play a big role. Ong recalls that in the 1980s, the only form of advertisement for an agent was the newspaper.
“Today, you have to be tech-savvy and know how to use portals and social networks or you’ll fall behind. I admire the younger group of agents and negotiators ... they are aggressive, smart and know how to use technology to maximise their audience. The best exposure gets the prize,” says Ong.
The changing landscape has also impacted the running of a real estate agency, which these days, where extensive and continuous trainings are a must, says Kho. People have more freedom and choice to move from one agency to another, hence the need to take care of negotiators.
“It’s no longer like what it was before where we throw you out there to fend for yourself. They don’t necessarily respect authority until you show them how you can help them. We work on getting results and improvement for our people,” says Kho.
Out of Reapfield’s 900 plus agents, only 20% are strong performers. In fact, says Kho, it’s the 20% that brings in 75% of the company’s revenue.
“The dropout rate in this industry is very high. We measure how well we do as an organisation by monitoring how well our top 20% negotiators are doing and the dropout rate,” he adds.
Ong is not surprised at the high dropout rate in the industry as a whole. “Some people think it’ll be a breeze ...put in a few hours a day and you’ll make money. There is a lot of work involved. Your time is no longer your own; you are at the mercy of the client. Those who think it’s easy will be disappointed.”
Traits of a strong performer
Three things set the top 20% apart from the rest — specialisation, hard work and strong knowledge of the market and area of specialisation.
According to Kho, specialisation allows an agent or negotiator to focus on the product, the area and the market, and enables them to understand the customers’ needs and build strong relationships.
“We even have agents that specialise in specific condominiums in Mont’Kiara or bungalows in Damansara Heights. When a customer hires an agent, they want someone to help them make a decision and not get dragged to see 40 properties. An agent who knows his/her product and area, and understands the clients can zoom in on the right property,” says Kho.
One way to find the right agent or negotiator, he says, is to use the online property portals.
“You look for the person with the most listings in the area you want, and it’s very likely this person specialises in that area. This business has a lot to do with relationships, so you have to talk to the negotiator. Test them, ask them questions about the area and the market, see how responsive they are and how prompt they are in calling you back,” offers Kho.
A passion for selling homes
David Ong, founder and president of Reapfield Properties Sdn Bhd, had diverse jobs early in his career — from being a clerk to selling forklifts. It wasn’t until he helped a neighbour of his parents sell a house that his interest in real estate was sparked off.
“The deal was concluded at RM155,000 and I received a cheque of RM3,100 for doing close to nothing. So I said to myself, this is like my childhood dream come true,” he jokes.
He founded Reapfield in 1984 with a partner, setting up a two-room office in a shoplot in SS2, Petaling Jaya, for RM500 a month.
“Then the recession in 1985-86 came and suddenly we couldn’t even afford to pay rent. So, I asked my partner to look for a job. I had to give up the office and operated from home instead,” he says.
After the recession, he joined another agency for two years before deciding to reactivate Reapfield in 1989. The agency went through a lean period during the Asian financial crisis but managed to survive. Then, from 2000, the company grew on an average of 20% per year.
Unlike Ong, Reapfield CEO Gerard Kho had always wanted to be in the real estate industry. Born in Kuching, Sarawak, he later moved to Australia with his family. After graduating from the University of Sydney with a double degree in property law and management accounting, he went straight into the real estate agent profession. He also has a degree in medical science.
“Actually, before I finished my final paper, I had already secured a real estate job. I used to visit open houses on weekends and have always been fascinated by the idea of selling someone’s home. Of course back then, I had no idea how tough the work would be. I remember seeing my salary and thinking it was so low,” he says with a laugh.
Kho joined Elders in Australia in 2004 and moved to the firm’s Singapore office in 2007 to oversee its expansion in Asia.
When he got the job offer from Ong, Kho didn’t hesitate.
“The timing was right. I was looking for a new challenge and had been considering moving back to Malaysia for a while,” says Kho, who is currently studying for a Doctorate in Strategic Leadership from US-based Regent University.
Kho and Ong have high hopes for the industry in view of the recent liberalisation moves and the book they have written is a way for them to make a small impact on the industry.
“We are not saying we are the best. But this is what we have learned and we want to tell the public how the industry works, dispel misconceptions, draw the right people to the profession and maybe, elevate the industry as a whole for the stakeholders,” says Ong.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 908, April 30-May 6, 2012
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