Real Estate Negotiator: Selling And Renting Real Estate
You may think that selling a product or service may not be your cup of tea because you simply cannot see yourself knocking on people’s doors to peddle something. Now, that may be true if you first have to create a desire or need in your prospective buyer for the product you’re selling. The challenge in selling items like insurance, make-up, jewelry and the like lies in convincing your prospect that he or she needs what you’re offering.
However, if you decide to sell something that is already a basic need, half your sales battle is won. If, instead of having to go out and approach people and persuade them to buy your product, you have people coming to you, wouldn’t that make the whole process of selling somewhat easier?
That’s the joy in selling or renting property. People always have a need for it, whether it’s a house to live in or a shop to conduct business. Shelter is a basic human need, so instead of chasing after prospective customers, you’ll be selling something for which there is already a need.
You capitalise on this by earning an income from helping people find suitable properties. Sounds good, doesn’t it? But you can’t just decide you want to do this on your own and collect a fee for your services – there are laws governing transactions related to property and a profession involved in the practice.
Getting Into The Act
In Malaysia, the professionals trained to sell or rent real estate are called estate agents. They usually set up companies known as estate agencies. These individuals are licensed under the Valuers, Appraisers and Estate Agents Act 1981 to collect a professional fee for selling or renting out a property on behalf of its owner.
To become such a professional, you have to sit for a two-part real estate examination offered by the Board of Valuers, Appraisers and Estate Agents, serve a two-year apprenticeship with a registered real estate agent and pass an oral examination.
Does that sound too tough for you? Not to worry, you can still earn an income by selling or renting property by joining a registered estate agency as a real estate negotiator. This way, you don’t need to be registered yourself, but you are under the jurisdiction of a licensed practitioner. Best of all, you get to work from home.
What Does This Service Involve?
Basically, a real estate negotiator’s role is two-pronged:
- To find a buyer or tenant for his or her client’s property.
- To find suitable premises for his or her client to buy or rent.
Thus a negotiator has two types of clients – property owners and those who want to buy or rent a property.
Under the law, a negotiator can only collect a fee from one party, meaning either the owner of the property or the buyer/ tenant. However, in Malaysia, it is commonly the owner of the property being transacted who pays the professional fee, unless the buyer or tenant gives a written undertaking that he will pay the fee.
How Do I Find Clients?
Sometimes, the estate agency you service will give you a list of clients who need to sell or rent out their properties. You can then go around looking for buyers or tenants using methods similar to that of estate agencies (such as classified advertisements, flyers approved by the Board of Valuers, Appraisers and Estate Agents, signboards put up outside the property, etc).
There’s yet another option if your agency does not give you such a list. You could help your colleagues who have already listed sellers and landlords to find buyers and tenants, and then split the commission. Most negotiators start off this way, and as they go along, build up their own list of clientele.
Spread the word around that you’re in the business and hand out your name cards to everybody. If you hear somebody wants to sell or rent out his house, don’t be afraid to offer your services and list them as clients.
In the same way, if you hear of people looking for a house to buy or rent, offer to source for a suitable property. You cannot expect your clients to come to you all the time – you have to look for new ones as well.
The difference in selling property, though, is that you don’t have to convince these people to buy or sell, since they would already have made this vital decision before you got into the picture.
What’s The Attraction?
You’re probably wondering what’s the big deal about selling and renting property. Here are some reasons:
- You work from home.
- You’re not tied to a desk in an office.
- You’re essentially your own boss.
- The hours are flexible.
- The money is good.
The $ Factor: How Much Can You Earn?
Under the law, a registered estate agency is allowed to collect a professional fee for selling or renting a property. For a sale, this is 2.75 per cent of the first RM 500,000 and 2 per cent of the balance. For rental, the fee is a month’s rental if you manage to rent a property out for a period of one to three years.
As a negotiator, you are entitled to 40 per cent of the professional fee.
Let’s say you manage to sell a house for RM 500,000. The professional fee collected by the agency you work with would amount to RM 13,750 (that’s 2.75 per cent of RM 500,000). Your take home commission would be RM 5,500.
Assuming you manage to sell the equivalent of two such houses in a month, your take-home pay works out to RM 11,000. That’s good money, isn’t it?
Or if you manage to rent a house for RM 2,500, your commission would be RM 1,000 (one month’s rental). Rent out three such homes, and you get RM 3,000 – a sum that’s not to be sniffed at.
Related Article: Real Estate Negotiator: The Perks