Introduction to Real Estate Agency Practice in Malaysia

A Real Estate Agent in Malaysia is a person who is registered with the Board of Valuers, Appraisers & Estate Agents, Malaysia. The person acts as the appointed professional property agent on behalf of one client (who can be either the Vendor, Purchaser, Landlord or Tenant in the sale, purchase or leasing of real estate) for a fee (usually known as ‘agency commission’) that shall not exceed the scale of fees as contained in the Seventh Schedule of the Valuers, Appraisers & Estate Rules 1986.

A Real Estate Agent can appoint a Real Estate Negotiator for real estate agency dealings and the Real Estate Negotiator will be under the guidance and supervision of the Real Estate Agent. Therefore, the Real Estate Agent is answerable to the Board of Valuers, Appraisers & Estate Agents, Malaysia, for any wrongdoings of the Real Estate Negotiator.

Generally, there are five types of real estate agency appointment in practice in accordance with the rules of the Board as follows:

Exclusive Agency Appointment
The property owner (the client) will grant “exclusive right to market” to a SINGLE appointed real estate agent under this appointment. In the event the client has end user(s) (potential buyers or tenants), the client can only introduce the end user(s) to the appointed agent but leave the presentation, viewing, negotiation and closing of the transaction(s) to the agent. The client cannot claim for discount on the agreed agency fees even though the end user(s) is(are) introduced by the property owner. All other real estate agents who have potential end user(s) for the property must also go through the appointed exclusive marketing agent in closing the deal. The agent fee will then be shared with the exclusive agent.

Sole Agency Appointment
Just as in exclusive agency, a SINGLE appointed agent will be given the ‘sole right to market’ the client’s property. The client may wish to reserve the right to close deals in addition to making introductions or an arrangement may be made for a discount in fees where the clients play an active role. All other real estate agents who have potential end user(s) for the property must also go through the appointed exclusive marketing agent in closing the deal.

Sole Joint Agency Appointment
Under this appointment, a SINGLE Real Estate is given the ‘right to market’ the client’s property jointly with the client. The client has the flexibility to compensate additional registered estate agents and at the same time maintain the advantage of having one registered estate agent in control.

Joint Agency Appointment
This is where MORE than one Registered Estate Agent is appointed and only the registered estate agent who closes the deal gets paid. The number of agents appointed is limited and each is aware of the appointment of the others.

Ad-Hoc Agency Appointment
In this case, the client can engage an UNLIMITED number of registered estate agents on an ad hoc basis and fees are paid only on successful introduction.