It was found that agent not registered with the Board of Valuers, Appraisers & Estate Agents.Industry players do recognize victim had fallen to the most common-form of mis-selling in the property market, whereby an agent, usually an unregistered one, attempts to sell a property even though he may not have an actual listing in hand
Buying a home can be the biggest commitment you make during your lifetime. But unless you are an expert yourself, chances are you would have to engage someone to act on your behalf and to perform the transaction. This person could be a family member or relative. Or you could engage a professional real estate agency (or its negotiators) to assist you in the process.
While the real estate industry aims to perform in the most professional way possible, it has its fair share of bad apples. These are agents or negotiators who carry out illegal or unethical practices. Unfortunately, these practices often go unpunished, says Roland Low, a director at Reapfield Properties (KL) Sdn Bhd. "No one is hauled up for this, so it perpetuates the practice. There are a lot of hardworking agents out there, but a few these people are giving the industry a bad name."
These practices are more rampant on the secondary market because these transactions outnumber those on the primary market. When you deal with developers directly, it is more transparent as well because they have to comply with stricter guidelines imposed by the authorities.
RUNNING AWAY WITH YOUR EARNEST DEPOSIT
One of the most common complaints is the agent's disappearance after you have passed him the earnest deposit to purchase your home. The earnest deposit is a booking fee (typically 3% of the purchase price) placed to confirm the buyer's interest in purchasing the property at an agreed-upon price and conditions.
In practice, the earnest deposit is to be banked into the client's account at the negotiator's agency while awaiting official documentation, such as the sale and purchase agreement (SPA), to be drawn up. However, problems arise when the prospective buyer pays the deposit with a cheque in the agent's name or worse still, with cash. Paying cash would mean that there is no paper trail for the company to pursue.
Siva Shanker, president of the Malaysia Institute of Estate Agents, says the earnest deposit has to be refunded in cases where the conditions of the SPA cannot be met, but this is something unscrupulous agents may not do. "Sometimes, the conditions obtaining approval from the state. Our fee is not due until all conditions are met. In the event the conditions cannot be met, the agent has to refund the money in full. What happens is that sometimes these agents, illegal or legal won't refund the money.
DECEPTIVE ADVERTISEMENTS
When looking for property listings, be they online or in the classifieds section of the newspapers, it is common to see multiple listings of the same unit. This may mean that the property owner has allowed more than one real estate agency to market his property. But sometimes, the pictures are posted by unscrupulous negotiators who have stolen them and are passing them off as their own. When they receive calls, the negotiator may begin calling other agents with genuine listings to set up a co-agency agreement ( to share the commission earned) by offering a ready and interested buyer.
One of the tactic would be fishing tactic by property negotiators and is considered illegal since the agent did not have his own listing to begin with. These advertisements are misleading. They are creating dummy advertisements to draw in buyers. Some property negotiators may also offer the property at below market price to attract callers. Another method is to tell you that the unit is already sold and then ask whether you are interested in other properties instead. You should suspect that something is missing if they cannot give you access to the unit that you are asking for, as it may not be their listing.
ILLEGAL SIGNAGES
How often have you seen small signboards that state a property costs "RM5XXl! Below market price!" stuck to pillars and lamp posts or at traffic light junctions? Chances are, these advertisements are illegal. According to Standard 6 under the Malaysian Estate Agency Standards Second Edition 2014, which regulates the profession of estate agents, when advertising a property for sale, the notice must include the agency's name, its "E" registration number, telephone numbers, and must not overstate or excessively praise the virtues of the property. Unless permission has been obtained from the authorities. Agents are not allowed to put up advertisements except on the location of the property.
Like signboards, flyers are not allowed to be used to solicit potential sellers, unless the agents already has a ready buyer. If you are selling a particular property, you can dsitribute flyers to other people's houses, but you cannot write letters asking them if they are interested in selling. But if you come to me and ask me to look for a bungalow in particular location, then it's okay. However, all the advertising rules apply.
According to Standards, flyers that are distributed must contain key information, such as the company's letterhead, details of the agency, relevant contact phone numbers and signature of the agent. They must also include statement : "Persons responding to this flyer are not required to pay an estate agency fee whatsoever for properties referred to in this flyer as this firm is already retained by a particular principal."
Multiple signboards are commonly seen at property for sale. While this may mean that owner has allowed several agencies to sell his property, sometimes these signboards are put up by unauthorized negotiators. Like the mis-selling practices seen on property portals and in the classifieds, these agents want a piece of pie and will set a lower price for the property to attract potential buyers. When they have an interested buyer, they will attempt to contact the owner, hoping that he will agree to sell the property through them.
Exclusive listings disallow other agencies or negotiators from putting up signboards on the same property. But this does not deter buyers from doing the same. It is considered trespassing. Oftentimes, the owner does not know who these agents are. If the owner takes a picture of the signboard and writes to the board, the board has to act.
OVERPRICING THE PROPERTY
The prices of properties can vary even though they are of a similar size in the same development. This can be due to factors such as the location of the exact unit. For example, corner lot or higher floor, restrictions on the title (bumiputera or non-bumiputera unit) and type of renovations and fittings that have been done to the property. However, they tend to trade within a range. Be wary when the asking price of a property is outside that range for no justifiable reason.
This could be done by the agent in collaboration with the seller when the latter tells him to obtain the "the best possible'. The owner would be happy to sell his property at a higher price. Collectively, these actions have an incremental effect on the property bubble in some areas and, to a larger extent, the country. When estate agents hike up prices in an unrealistic manner, It affects market prices and the economy negatively.
source from personal money magazine, september 2014 edition
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