Licensed Real Estate Agent vs. Bogus Real Estate Agent

Licensed Real Estate Agent vs. Bogus Real Estate Agent
In Malaysia property market, many property owners do not know how to differentiate between a licensed real estate agent and a bogus. So often they were either cheated or not happy with the way bogus agent conducting their business.

Licensed Agent
In order to become a licensed agent, one must study and passed all the exams set by the Board of Valuers, Appraisers and Estate Agents under Ministry of Finance (the Board). The whole process may take several years to complete. Once a member passed the entire exam, a license will be granted bearing an E number, i.e. E1234. If he wishes to run a Real Estate firm, he needs to register his company with the Board and another E number will be given for his firm. The E number together with the Board logo will appear on his call card and all advertising Medias.

All licensed agents are regulated and governed by the Board subject to rules and guidelines set by the Board. Any licensed agent found to be violated the rules will be penalized by the Board, depending on the seriousness of the case, the Board might at it discretion to suspense or terminate the license holder.

All licensed agents are required to renew their license on a yearly basis. Before a licensed agent could renew his license, he must proves to the Board that he has obtain sufficient credit hours by attending courses or training programs approved by the Board throughout the year. This is to ensure all licensed agents are equipped with the latest market info and aware of the changes in Real Estate Business both locally and globally. This also serves to maintain the professionalism of a licensed agent.

On top of that the Board ensures all licensed agents were insured with Professional Indemnity Insurance. This is to protect the licensed agent against compensation sought by a client if he had made mistakes or are found to have been negligent. Professional indemnity insurance will also cover any legal costs.

Most professionals carry professional indemnity cover. Just like lawyer, accountant or financial adviser.

Below is a table showing the different between licensed real estate agent and bogus agent.



In order to know if an agent is licensed or not, you may log on to the Board website at http://www.lppeh.gov.my and perform a search. You may search by using the company name, full name of the agent or E number. If he or she is a licensed agent his or her particulars will appear, so as the company search.

Bogus Agent
Bogus Agent is someone who acts as an agent to carry out real estate businesses or transactions without a valid license issued by the Board.

Under Malaysian law, if someone were caught doing Real Estate transaction without a valid license, once caught and convicted, he or she could be faced with a maximum fine of RM25,000 or imprisonment or both.

As of today, despite the Board and the Malaysian Institute of Estate Agents (MIEA) persistent affords in getting rids of bogus agents, there are still about 10,000 bogus or illegal agents actively involved in the property market.

From time to time, we have heard or even seen in the newspaper how someone was cheated or mislead by bogus agent. But why there are still so many bogus agents in the market?

Partly due to the lack of awareness by the public of the existence of bogus agent and some bogus agents may offered much attractive commission rate to the property owners for the services they provided. Some bogus agents lure the property owners into dealing with them by giving all sort of empty promises.

Why bogus agents will not provide a good service to the public? Firstly, they are not under any watchdog or governing body which they can conduct business anyway they like. For instance, you may see some hand written "To let / For Sale" sign nailed on tree trunks. Under the Boards ruling, a licensed agent is not allowed to do so.

Secondly, they normally do not have permanent office, therefore if they have done anything wrong, they can simply move to another location and start all over again. Whereas all licensed agents are required to register their office address with the Board, in the event, if there is any wrong doing of a particular licensed agent, the Board knows where to find them.

Thirdly, bogus agents are not professionally trained in handling property transaction, especially matter relating to laws, they might mislead or provide wrong advice to their customer, caused them entered into contract with other parties and ended up with legal suit. Some of their customers thought that they get some saving by paying fewer fees to bogus agent but ended up paying more in law suit.

Another reason why they are not ethical in there practices is because they do not intend to stay in the business for a long time, once they have earned there money, they might just moved on. Unlike licensed agents where they decided to make real estate business as their career and spent years to obtain their license, they will not give up their business easily and they will adhere to all rules imposed by the Board.

Furthermore, they will maintain their highest standard and professionalism to keep their customers happy and look forward for future business or new business referred by their customers. Therefore for them, their customer's need always comes first.

Dealing With Bogus
Below are some of the problems faced by property owner who dealt with bogus agent before:-



Negotiator
However, you may encounter many "agent" whom they called themselves "Negotiator", they are not bogus agent but these are assistants hired by the licensed agent to help them in their work.

Conclusion
As a wise property owner, the best choice is to choose a licensed Real Estate Agent for their commitment and professionalism in conducting their business.

Furthermore, licensed agents are more willing to invest in human resources, training programs and technologies to assist their day to day operation. As a result all this will enable them to serve their customer better.

This article is extracted from Iprop.