After the MCO ended, a lot of people are looking at selling or buying property due to the opportunities that may rise from the economic stimulus.
Prior to spending hundreds of thousand, it might be good for know how an agent could cheat you so that you can be on your toes and safe guard your cash.
So lets look at the top 4 exploitation that can be done by the agents
As per the word means, this is when a property agent intentionally lies or hides information that could influence your decision on buying the property🏘.
The agent could hide information as simple as whether the unit might be termite infested, lift breaks down often, bad management or even the wrong sqft of the unit.
You should always do your own due diligent on the surrounding and the property. Check online for any comments or discussion regarding the said property to find out things that you might not be able to see/know when you visit the property.
- Fee or commission collection💸
Based on personal experience, in Johor 🏨 we had few agents who were collecting commission from both the buyer and seller.
At that time we didn’t know that the Law only allows the agent to collect commission from one party only. This is to protect the interest of the party the agent is representing. So be careful with this type of agents. Make sure you have discussion with the agent prior to agreeing to buy the property.
The current broker or agency commission rate is 3% under the law but there are people who collect more than that. Usually the individual agent does not receive all the 3 % as some of it will need to be given to the property agent broker.
- Seller entrapment
Price manipulation can happen through two ways, the first through profiteering and the second is by undercutting the selling price.
Profiteering is when a seller wants to sell his house for RM 500k but the broker is aware that the property value is worth RM 600k.
He agrees to sell it at RM 500k without advising the seller of the actual market value.
The broker then asks the seller to allow him to earn a bigger cut (lets say 20%) if he or she is able to sell it at a higher price.
Should the broker be able to sell the property at RM 600k, he or she would earn 20% of the additional RM 100k
Beware if the agent comes out with this type of plans.
Undercutting✂ the selling price is when the seller indicates he or she would like to sell the property at RM 750k but the broker in his haste to sell quickly may advertise it at RM 700k and take an offer lower than that what was authorized.
In this case, the seller immediately loses the opportunity to make the RM 50k.
An agent could also falsely represent the seller or landlord without legal authorisation. Anyone who represents a seller or landlord must have a written authorisation from them to sell or rent the property.
- Conflict of interest
Agents are required to declare themselves to the seller when there is a conflict of interest in the deal.
One fine example of this happening is where the broker or agent finds a property that is marketed below the market value and gets his wife to buy the property while he is the agent for the transaction.
He needs to disclose to the seller that the buyer is his wife👸 prior to negotiating the price and close the deal.
The agent is suppose to protect the interest of his client.
Any wrong advice or indication of wrong information was given, may result in the contract getting void or ending up in court.