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Saturday, March 15, 2008

Enhancing professionalism among real estate agents

“FOR the year 2008, we want to be vocal, to say things, to take action. We want to enhance professionalism, to develop the business further, to be dignified,” says K. Soma Sundram, president of the Malaysian Institute of Estate Agents (MIEA).

The longstanding unresolved issue of illegal real estate agents is becoming quite a frustrating issue for MIEA. With 10 to 15 unregistered real estate agents for every registered agent, the loss of revenue to the real estate industry and the government is tremendous, he says. Nevertheless, MIEA is relentless in efforts to deal with the problem.

“Illegal agents have always been an issue, but the Customs Department has agreed to work with us to educate the public and also to act on the illegals,” says Soma. According to him, the illegal agents do not pay service tax and as such, Customs are interested to act on them. “It is also a good thing for the public to know that estate agents are liable to collect service tax of 5% of the service fee, payable to Customs. Before, only those who have reached a certain threshold of RM150,000 in transaction and above have to pay service tax. Effective January 1 this year, there will be no threshold and every agent is liable to collect the 5% service tax,” he says.

“Now, every agent has to pay as long as they collect a professional fee. In the past, we used to pay it with our own fees. This is a good move for agents. Those below the threshold had 0% service tax, so they didn’t have to compete with the rest. Now that it is standardised, it has become a level playing field,” says Soma.

On behalf of MIEA, Soma had written a letter to Prime Minister Datuk Seri Abdullah Ahmad Badawi last year, highlighting the plight of the real estate agents and requesting for a meeting to discuss the issues and to take the necessary steps to eradicate the problem. The letter was also
forwarded to several other governmental departments. However, it failed to stir any response from the authorities.

Estate agents are governed by the Valuers, Appraisers and Estate Agents Act 1981 (Act 242) and illegal agents caught can be slapped with a RM25,000 fine and/or jailed for three years. However, until this day, not a single illegal agent has been brought to court. “The courts have the authority to penalise these people, but no one is really concerned with resolving the issue and as such we have taken the matter into our own hands,” says Soma.

“This year, we will also raise issues, such as the representation of estate agents in the Board of Valuers, Appraisers & Estate Agents Malaysia, issues affecting estate agents in practice, talking to the public about the profession itself, educating our members to ensure that the level of professionalism goes up, and discussing whether real estate agents should be involved in property management,” says Soma.

“We want to reinvent the real estate agency profession,” he says. “Another one of our frustrations is the representation of estate agents in the board,” says Soma, adding that one of the things he hopes for MIEA to achieve is to set up a Board of Estate Agents to better represent those in the profession.

Having said that, he feels that the outlook for the real estate market is good. “I’m very confident that the market will be very good for the next 1 ½ years. There are no complaints from real estate agents, which is an indication of the market doing well, and the government’s focus over the last two years on incentives such as the Real Property Gains Tax (RPGT) and the launching of the various economic corridors, all encourage the market tremendously,” he says.

As the year 2008 unfolds, there will be a slew of new things coming in for MIEA. “We have purchased our own building, located at 3 Two Square. It is about 2,100 sq ft and costs around RM600,000. We settled our payment in February and by May, we plan to move in. We’ve been wanting to have our own building,” says Soma. The premise is located at Section 19, Petaling Jaya.

Also for the first time, MIEA has formed a strategic alliance with OCBC and AIA for a year. “OCBC will be providing us with training on the loan packages and they will work with the real estate agents to promote that. AIA has come out with a Mortgage Reducing Term Assurance policy.

It’s a new policy which we feel our clients will benefit from,” says Soma. According to him, the alliance will help enhance the professionalism of real estate agents and provide added value service to the clients.

“OCBC has given us RM100,000 sponsorship while AIA has given us RM50,000,” he adds. In line with its goal to increase the level of professionalism, the institute will be introducing the MIEA Industry Awards of Excellence this year. “We want to recognise agents who have excelled in their profession, who have done well in their fields whether it is residential, commercial or industrial.

We will also give recognition to the top real estate negotiators,” says Soma. According to him, the awards will be presented during the MIEA annual dinner scheduled for June 20. Nominations will begin after its annual general meeting (AGM) in April and an independent judging committee will be appointed.

Soma says MIEA also intends to officially take on the role of training and certifying real estate negotiators by introducing a government-recognised course.

“Negotiators are people employed by estate agents. They’re not required to be registered at the moment, and we feel that the training is inadequate. Things work more or less in-house, and not all negotiators are sent for the currently running negotiator’s course,” he says.

“In order for industry standards to go up, it must start from the guy who meets the client. And it’s not the estate agent. We want to take over the role of training the negotiators, certifying them and registering them under the board,” says Soma. Certified real estate negotiators will be issued a card, which is renewable every year. They would also be required to go through courses in order to renew the cards, a move made to maintain industry standards.

“MIEA has, over the last many years, registered some 2,000 negotiators and certified them as Certified Real Estate Negotiators (CREN). We have suggested to the board that MIEA should be doing the registration and we are in the midst of presenting them a working paper,” says Soma.

He also wants agents to extend their horizons overseas. According to him, a lot of foreigners have been entering the country due to government incentives such as the changes done to the Malaysia My Second Home (MM2H) programme. However, only 10 out of 300 real estate agents are involved in the programme, says Soma.

“The real estate agents are the best people to go out there and talk about Malaysia, to talk about the programme itself, and to talk about property. All this while, real estate agents have been quite inwardly focused and this has been the attitude for a long time.

“Some agents have taken the opportunity and some of them are doing very well. They know about the programme, but we need to educate them, show them exactly how they can ‘exploit’ this for their benefit. Agents must go overseas to talk to people, we can’t be expecting them to come over and knock on our doors,” says Soma.

Last but not least on MIEA’s plate is the introduction of a multiple listing service, where a central database would be set up and all properties listed by estate agents who are members of MIEA would be published, in hopes for a more organised system and fair competition for agents. It is currently sourcing for avenues to publish the listed properties.

“We hope to introduce this as it will totally open up the market. It is viable and it can happen. Holding cost is expensive; the system would also speed up sales. The turnover of agents would improve too,” says Soma.

By theSun (by Yeong Ee-Wah)

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