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These are 4 ways you could get cheated when buying a property. Don’t!

Property markets are getting slightly hotter these days. So many of my FB friends in Greater Kuala Lumpur is posting about property investments. Buy, Buy, Buy is back? We shall see. Many of them are experienced investors and thus may not be easily cheated by some unscrupulous property agents. As for most of the first-time home buyers, well, just have to beware of some of the pitfalls.

These 4 tips on how to deal with property agents were shared by the Malaysian Institute of Estate Agents’ (MIEA) CEO K. Soma Sundram. Basic idea is that many first-time home buyers or even property investors may not know that there are things which the property agent MUST do and MUST NOT do. They are professionals which is why they earn a professional fee from the services rendered to the buyer or the seller of properties. So, can they represent BOTH parties then? Happy reading and understanding yeah. Original article in here.

#1 – Misrepresentation Misrepresentation does not necessarily only meant that the intention was to cheat. However, stating wrong facts is also considered a misrepresentation. Soma said, “For example, telling a buyer that the built-up area of the property is 1,600 sq ft when it is only 1,450 sq ft. As a trained professional agent, he or she is required to check all facts before marketing the property.”

Another way is to intentionally hide facts about the property from the potential buyer. Soma said, “Let’s say there is a piece of land that is for sale and the agent is aware that there will be a compulsory acquisition by the government of some 3,500 sq ft out of the 10,000 sq ft of land. However, the buyer was only informed that the land for sale is 10,000 sq ft while the broker withholds the fact of the acquisition.”

#2 – Fee or commission collection The collection of fee can ONLY be from one side; either the buyer or the seller. It is against the law to collect from both parties; buyer and seller. Soma said, “The law allows the agent to collect fees from only one party (either the buyer or the seller) that engages him/her to act on their behalf. This is to protect the interest of the party the agent is representing.”

Soma also said that under the law, the prescribed broker or agency commission rate is 3%. Anyone collecting higher is against the law. The allowable fees as prescribed in the 7th schedule of the 1986 Rules on Land & Buildings must not exceed 3% on the selling price.

#3 – Seller entrapment. First instance is when a seller wishes to sell his home for RM500,000 because he is unaware of the market price. The broker agrees to help the seller sell at RM500,000 without telling the owner of the market value. He then tells the seller to allow him to earn any amount he could sell higher as his commission. This is illegal because the maximum fee permitted is just 3%.

An agent must also have formal representation documentation. Some said, “Anyone who represents a seller or landlord must have a written authorisation from them to sell or rent the property. This allows them to ascertain accurate information on the property and to prove that they are legally representing the seller or landlord in the property sales or rental.”

#4 – Conflict of interest Agents must also declare themselves when there is a conflict of interest. For example, a broker or agent finds a property which is marketed below the market value and gets his wife to buy the property but does not disclose that the buyer is his wife and negotiates and closes the deal. This is a conflict of interest because the agent is supposed to protect the interest of his client; the buyer. The article is a longer and more comprehensive one. Do read it here. Article in

Of course, the main reason for Soma’s sharing is to tell everyone to use a registered real estate agent / negotiator. His advice makes sense because even if we could not control who cheats us, whether the illegal brokers or the registered real estate agent / negotiator, with the registered one, we could take legal actions. As for the rest of us, always note that the 4 things shared above could be avoided if we ourselves also do some market research.

For sellers, before selling, do a research of the transacted prices. Here is one such website. . For buyers, if you want to know more good deals, get your property specs out to good real estate negotiators. They will be your eyes and ears because that’s their role. As for you, perhaps may just get a very good deal in the near future. Do not be too hung up on the professional fee. Stay focused on potential future capital appreciation too. Happy buying.

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Next suggested article: Renting and selling? Get REAs and RENs to help yeah

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.


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