Introduction

Property Agent Fees in Malaysia: When it comes to buying or selling a property, many of us turn to online property websites or seek assistance from a property agent. However, concerns about agent fees often arise. In this article, we’ll explore the reasons why you shouldn’t fear these fees and understand the services provided by property agents. Additionally, we’ll discuss how the fees are calculated, who is typically responsible for paying them, and shed light on potential hidden costs.

The Benefits Of Using A Property Agent

Property agents offer convenience by saving you the time and effort of searching for buyers or sellers yourself. Their role encompasses various tasks, including marketing properties creatively, conducting background checks, assisting with mortgage applications, and helping with home insurance. They act as an all-in-one package, utilising their expertise to promote and sell properties efficiently.

Understanding Property Agent Fees

Property agent fees cover a wide range of services and expenses. Agents handle marketing materials, document printing, traveling expenses, and the crucial task of finding quality buyers for your property. It’s essential to note that the first three costs mentioned require prior approval from the client before being incurred.

Commission Rates for Real Estate Agents (REA)

According to the Malaysian Institute of Estate Agents (MIEA), for the sale and/or purchase of land or buildings, the commission fees for REAs are typically set at a maximum of 3% of the property’s sale price, with a minimum fee of RM1,000 per property. Personal property sales, including plant and machinery, incur a 10% agent fee.

What About Real Estate Negotiators (RENs)?

Although RENs have fewer qualifications than REAs, they are subject to the same commission rate. That is, a maximum of 3% of the property’s sale price. It’s important to note that registered RENs must be linked full-time to a real estate firm.

• Agent Fees for Rentals:
  For rental properties, the fees follow a specific structure determined by the MIEA. The minimum fee for rentals is usually equivalent to one month’s rental or subject to the rates outlined below, depending on the duration of the rental:

• Up to 3 years: 1.25 months of gross rental
• Exceeding 3 years, up to 4 years: 1.50 months of gross rental
• Exceeding 4 years, up to 5 years: 1.75 months of gross rental
• Exceeding 5 years: 1.75 months of gross rental (with or without the option to renew), plus an additional 0.25 months of rental for every additional year.

Who Pays the Property Agent’s Fees?

Both buyers and sellers contribute to covering the property agent’s fees. However, technically, the seller should bear the cost. The seller has the option to include the agent’s fees in the listed price, which means the buyer ultimately pays for the property, including the agent’s commission.

When Should You Pay Your Agent?

According to the Malaysian Estate Agency Practice (MEAS), you are expected to pay your agent’s commission fees as soon as the legal document is signed. There is no need to wait for stamping; payments should be made promptly after signing.

Check Out 5 Important Costs To Consider When Selling A House In Malaysia

Understanding Closing Costs:

Closing costs refer to expenses incurred throughout the property-buying process. These costs include stamp duty, renovation/repair fees, legal fees, house valuation fees, and insurance. While there is no strict rule on who covers these costs, buyers usually bear the majority or all of the financial burden. However, negotiation regarding payment responsibilities can be outlined in the contract.

Conclusion:

Property agents play a crucial role in the buying and selling process, providing valuable services and expertise. While their fees may initially seem daunting, understanding what they encompass and how they are calculated can alleviate concerns. Remember to research and choose a reputable agent, and always trust your instincts. By clarifying who pays the agent’s fees and being prepared for potential closing costs, you can navigate the property market with confidence.