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If you’re not an experienced investor with a top-notch property portfolio, it’s safe to say the real estate sector might not be something you can trust 100%.
Buying property isn’t as simple as it seems. There are “loopholes” everywhere that illegal agents exploit to make a profit—loopholes you might not even realize exist until it’s too late!
Since purchasing property involves a significant amount of money, it’s not something you can take lightly. You have to be serious! For your own safety, make sure to only deal with qualified professional agents.
How serious is the issue of fake agents?
According to LPPEH (The Board of Valuers, Appraisers, Estate Agents, and Property Managers), complaints about property agents reach 50 to 60 cases every month from victims scammed by illegal agents.
The problem is, you may not even know how to identify a genuine REN (Real Estate Negotiator) or REA (Real Estate Agent) to avoid being duped. Don’t worry—we’ll explain everything! Keep reading, okay?
Is the Agent a REN or REA?
Did you know your so-called “property agent” might not even be a real agent? In Malaysia, there are two categories of agents you need to know about: Real Estate Negotiators (REN) and Real Estate Agents (REA).
While both are qualified professionals certified by LPPEH, their roles and scopes of work are quite different.
In simpler terms, a REN (Real Estate Negotiator) works under a REA (Real Estate Agent). RENs must attend a two-day program called the ‘Real Estate Negotiator Certification Course,’ where they receive a certificate of attendance after completing the course.
From there, they need to find a real estate firm to sponsor their application to become a REN. Once they receive their official tag, they’re allowed to work in the real estate industry under their firm.
On the other hand, REAs are agents with more experience, so it makes sense that RENs report to them!
To obtain a REA license, these professionals must pursue diploma-level studies, gain two years of work experience, and submit their work periodically to LPPEH (The Board of Valuers, Appraisers, Estate Agents, and Property Managers) for assessment.
It’s important to know the difference between a REN and a REA because there are specific limitations on what RENs are allowed to do.
For example, RENs cannot set up their own agencies, and they must always be attached to a registered real estate firm to operate in the industry
Not everyone is eligible to open a real estate agency! Only those registered with LPPEH (The Board of Valuers, Appraisers, Estate Agents, and Property Managers) have the right to do so, and the company can operate as a sole proprietorship, partnership, or corporate body (Sdn. Bhd.).
A sole proprietorship is the most common business structure, where the business is owned and managed by a single individual—like a ship steered by one captain. This means there’s only one boss to report all developments to. For this structure, the owner must be registered with LPPEH.
In the case of a partnership, both partners must also be registered.
For a corporate body, it requires at least two directors to be registered with LPPEH. Moreover, the majority of the directors must be registered. For instance, if there are five directors in total, at least three must be registered.
It’s also worth noting that registered real estate firms are NOT allowed to operate from shared business spaces (like coworking spaces) or virtual offices.
If your agent takes you to a coworking space and claims it’s their office or headquarters, that’s a red flag and could lead to problems later on!
How to Verify the Authenticity of a REN/REA
1. Identification Tag: Red or Blue?
How can you ensure that the real estate agent you’re dealing with is a registered professional?
When dealing with an agent, they should display or wear their LPPEH-issued identification tag—not a company tag. This tag is exclusively issued by LPPEH once they qualify as a REN or REA.
The tags are easy to identify!
- A red tag signifies the wearer is a REN or an agent on probation.
- A blue tag indicates the person is a certified REA.
If the agent doesn’t show their tag, citing reasons like it’s still being processed or left at the office, you can request their ID number. Alternatively, you can choose not to proceed with them until they provide clear proof of their identification.
2. LPPEH Hologram: Is it there or not?
On the official tag of a REN or REA, you should spot the LPPEH logo hologram.
Security holograms are difficult to counterfeit. So, if your agent presents a red or blue tag without a holographic logo—don’t hesitate. Walk away immediately!
3. QR Code: Scan for Assurance
The best way to confirm whether your agent or negotiator is legitimate is to scan the QR code on their identification tag.
This QR code will link directly to their REN/REA profile, showing all the necessary details, including their photo for verification.
4. REN/REA Registration Number: No QR Code? Check Online!
Certified REN agents are given a unique registration number. You can ask your agent for this number and conduct a quick search online through the LPPEH portal to verify their legitimacy.
5. Company Name: Search Online for Confirmation
Double-check the company your agent is affiliated with by searching for their name online. Ensure it’s a registered real estate firm to avoid potential scams.
6. Agent Commission: Maximum 3%
According to the Malaysian Institute of Estate Agents (MIEA), the maximum commission an agent can charge for the sale and/or purchase of land or property in Malaysia is capped at 3% of the property’s selling price.
Be cautious of unqualified individuals posing as RENs/REAs and demanding more than what’s allowed.
Whether the 3% fee is handled by you or the seller (if you’re the buyer), click here to find out who is responsible for paying the agent’s fees.
7. Ad Details: Check These 4 Key Items
- With illegal agents around, fake ads are everywhere. As per MIEA, property ads in newspapers, property portals, or on signage must display the following details:
- The registered e-firm number with LPPEH
- The REA/REN’s name
- The REA/REN’s registration number
- Contact information
If you spot something suspicious, report it! Take a photo and send it to LPPEH, including the street name, date, and time. Don’t forget to include your name and contact number. LPPEH will verify it before forwarding the case to the Malaysian Communications and Multimedia Commission (MCMC) to block or remove the ad.
8. Verify the Agent’s Identity During ‘Viewings’
- Don’t assume you’re safe just because you’re attending a property viewing. Make sure the agent you initially contacted is the same person present during the viewing.
If the agent claims to be “busy” and sends someone else, this is a red flag!
Scammers often use such excuses to impersonate other agents.
How do scammers gain access to the property? For homestays, they may book the unit on the same day you’re scheduled for a viewing. Some even rent properties for short periods to trick customers into believing they’re legitimate agents.
9. Investigate the Agent on Social Media
Legitimate agents often manage multiple properties within the same area.
Ask the agent about properties they’ve previously handled, or better yet, talk directly to residents in the area for confirmation.
Feeling uneasy about approaching strangers? Don’t worry—you can always check on social media. Many neighborhoods or housing areas have Facebook groups or similar platforms.
Post your query and ask if the agent has ever managed property transactions in the area. You might even make new neighbors along the way!
10. Written Agreement Is a Must
Once you’re satisfied and ready to proceed, make sure you have a written agreement with your agent.
Don’t let friendships or recommendations from family and friends blind you—always insist on proper documentation. Even friends can betray trust, especially when large sums of money are involved!
