Hi All - I'm new to the Penang property market and I'm interested in a property there. After I made an offer on it the agent informed me that it is 'standard practice' in Penang that the buyer pays one third of the agents fee!
I'm rather surprised at this. It is not the practice in KL, where I bought my current home several years ago. I'm not sure if the agent is telling the truth - and they left it a bit late in the day to inform me of this.
My other main issue with it is - what do I get for paying the agent? the agents job is to SELL the property (for the OWNER) and to GET THE BEST PRICE. Neither of those functions benefit me - and indeed may work against my interests. I do not expect an agent to get me a lower price when buying, and if I am the seller I certainly do not want the agent being confused about who they are working for, and who they are helping. As the OWNER I want the agent working for me 100%! This whole idea frankly stinks to me.
Is it a scam?

Yes it is true, but as i know is 1% from buyer, 1% from seller in Penang. That's the practise there.

Same in Kedah. Kind of weird.

But agent must disclose prior to nego.

If you mentioned offer is nett - then best you stick by it. Tell agent that’s his problem - perhaps persuade the seller to pay the fees.

The agent told me their fee is 3%. Two for the seller, and 0ne for the buyer.



Yeah - only in these two States?



Nope, didn't do that.



Nett offer? Never heard of that practice before.
Anyhow the owner rejected the offer so now we have a clean slate - but I've certainly lost a lot of trust in the agent.
And I still don't get it - why should I have to pay the selling agent to screw me on the sale price???

This post has been edited by Colada: Jan 15 2022, 09:42 PM

That is a custom practise which LPPEH cannot solve till today ... to have a uniform fees for all states. Jb is also the same.

Anyway, is always good practise to ask if you are require to make any payment if you are dealing with any agents .... doesnt matter which states or past experienced.

Because you assumed is the same with Sgor/KL ... so is the agent thinking you are a local also. The agent also made a mistake by not informing you.
1/3 of 3% is the same as 1% of 2%.

Max is 1%

This post has been edited by mini orchard: Jan 15 2022, 11:10 PM

Just bought subsale property early 2021 in Penang, I had to give 1% commission to the agent. I didn't ask how much the owner had to pay but I guess would be around 1% too.

So you should be totally paranoid all the time and expect everyone to be out to screw you. Seems like a touch of paranoia is necessary here. Nasty.....



Nope. The agent knew very well I came up from KL to view the property.



I lived overseas for a long time and bought property in other countries. Estate Agents everywhere can be crooked. In some countries they are better regulated than others, and property transaction costs are strictly laid down in many places (e.g. France). Malaysia lacks a lot in consumer protection law, and what's worse is that Malaysians meekly accept the numerous ways they get screwed over here. I posted in another thread a while back about how putting a deposit on a new car here means literally nothing in terms of what rights it gives you. I was surprised how many replies I got saying that's perfectly fine!
Maybe they were all car dealers replying, because if they were buyers - they were like turkeys voting for Christmas.

So, I think the property BUYERS in Penang are nuts to meekly accept that they should pay for the OWNERS agent (who they didn't choose, or hire, have no legal relationship with, and who is tasked with squeezing the maximum out of them). Every Ringgit the owners agent squeeze out of you is more money in their pocket! Any BUYER who thinks that's fine is seriously delusional.
Just say NO!




Interesting point. You don't know what the owner paid the agent. Have you considered it might have been.....zero?!
Meaning, YOU paid for the agent all on your own-e-o.
Maybe the agent got some other kinda kickback/favour, or was selling for a friend, or was told to squeeze YOU to the MAX to make THEIR fee - which was entirely your 1%!
Totally unacceptable.

That leads me on to another question - I've met many 'Property Agents' in Malaysia, and they generally seem like total amateurs compared to the people I've dealt with overseas. Many of them seem to be housewives doing a side gig. So, do you have to have any professional qualifications to set up as an agent (not a Property Company, just a sole agent)? Is this strictly regulated? Or do amateurs quietly work unlicenced in 'niche markets' in their neighbourhoods? That's the feeling I get from many of them. They are free-lancers who jump on personal adverts in Condo's and offer their services (oh sir, I have a buyer/renter who wants to view your property, can I bring?).
Perhaps the person I dealt with in Penang is such an amateur, and perhaps indeed just 'forgot' to mention I had to pay a fee for their 'services'.... certainly not very PROFESSIONAL then, eh?

This post has been edited by Colada: Jan 16 2022, 04:16 PM

I dont think is agent problem. Probably kiasu stingy owners in Penang jb dont want to pay their 3% so these stingy cina man wants the buyer to bear 1%

You asked for people's opinion on the matter, and when one of the well respected and experienced member, mini orchard, gave you his opinion, you claimed that he is an agent. You are so delusional. I think most will agree that his opinion is not bias towards any party.

I am from Penang and it has always been the norm for the Northern states that buyers and sellers share the agent fees. At the end of the day, it is the same because if seller bears all the agent fees, then seller will just up the selling price by 1%. You think agent just take 1% from you and nothing from the seller? Try finding an agent that is willing to help you sell any property for just 1% commission. If you feel that the 1% commission makes the deal not worth it anymore, then just leave it and look for other property. Stop acting like a cry baby with all the conspiracy theories.

There are very stringent requirements before one can set up a licensed property agency. But most of the so-called agents that you are dealing with are probably Real Estate Negotiators (REN) working for the Real Estate Agent (REA). It is quite easy to be a REN, just need to attend a 2-days course as compared to a REA which takes ~4 years. If you feel they are not professional, just ask for their REN or REA number and lodge a complaint.

You just confirmed what I proposed! That the seller jacks up the price by the agents fee - so only the buyer actually forks out the fee! QED.


If the property is HIGH VALUE (i.e. 3M RM) they will earn 30,000RM - just for walking someone around it. Easy money! Yes! I would happily take 30K RM - wouldn't you? Don't be greedy lah! That's a years salary for many Malaysians!

The other snag with this system is this - if I was the seller, and the agent is being paid anything by the buyer, how can I trust that agent to act for me alone? If the agent just wants a quick sale he may quietly inform the buyer of what your lowest acceptable price is, just to get the deal done. They want paid, and since the buyer is paying him he might well feel some (or even more) sympathy toward the buyer.
So can you fully trust your agent under this system? You the seller might get screwed too.


Things change. C'est la vie.



Well thanks for clarifying that - it's just what I suspected. An industry full of chancers.



Ah - it's just a bit of banter mate. Don't be a snowflake.

This post has been edited by Colada: Jan 16 2022, 04:07 PM

I think you are right sir!
But it's short sighted and self defeating, as I explained above.

This post has been edited by Colada: Jan 16 2022, 04:12 PM

If those thinks agents' job is easy money, they are welcome join the trade.

A 3mil property can take up to 12 months or more from listing to close the deal. A 30k comm is only less than 3k salary per month, which is PEANUT!

And is not just walking around the compound ... many a times, the agent need to walk from Penang to JB.

This post has been edited by mini orchard: Jan 17 2022, 07:57 AM

Agree, not to mention that this is gross commission. The agency will take a 20%-30% cut, and most of the time agents need to fork out the advertising fees (easily in the thousands) and all the out-of-pocket expenses. And anyone who thinks they can sell a RM3 million property by just a few facebook posts and walking people around are naive. How do you get the people who can afford a RM3 million property to walk around with you? Most of the time, luxury properties are sold through personal/business connections, which means you need to put in the effort for networking. Another market is for overseas investors, but with the new MM2H requirements and Covid, this market is already dead.

There are many property agents and most want you to believe that they are doing well in order to attract their downline. Reality is not many actually made it to the top.

TS stayed overseas too long time... TS also know how to say above, different country have different practice/custom, why not in different state in Bolehland...

If TS want to apply "just walking around and can earn"... then all intermediate agents and dealers, no matter what industry, will be a chancer... Please go factory and buy ur own goods, whatever retails store is earning ur money by just displaying the goods in their shop

And DONT have 'BIG' thinking that a buyer is doing an agent a 'FAVOUR' to buy 'his' property so he can earn the commission !

Good and nice people are DEAD in this world as far business & money are related.

This post has been edited by mini orchard: Jan 17 2022, 11:26 AM

In Penang it has been a practice for buyer to pay 1% and seller the remaining 1%.

These are all what is commonly known as 'the cost of doing business'. Even a guy flipping burgers for a living has 'expenses'. The upside for a property agent is way higher though!


How do you attract buyers? All of the properties I've looked at in Malaysia were found on iproperty.com or propertyguru.com type websites. That's the go-to starting point for anyone buying or renting.
Don't tell me an advert in one of those is gong to cost much. Especially if you're an agent with regular large volume advertising. In the old days when property was sold through newspaper adverts and shop front agency offices there was a much higher cost involved. Even printing flyers and brochures. All of that is gone! In all the properties (subsale) that I have viewed in Malaysia I have NEVER been handed a sales brochure or flyer, I have never seen a property company office, and I have never found a property in a newspaper or magazine. The advertising costs have gone down through the floor for agents. It's all online and very cheap.

Besides all that - you're cleverly neglecting to mention that however long a sale takes, (and I've never had to wait more than 4 months) you do not pack up and sit on your butt waiting for that one property to close so you get paid. You'll be right out on the market again pushing more properties. You have no further function in the process once the deposit has been paid.
And although we're discussing the income on a 3M property based on a 1% commission - your commission is actually 3% ! That's 90,000RM for a bit of typing on a website, answering a few Whatsapp messages and calls, and driving out to a property (which is your job, right?). 90K RM for just that???? Money for old rope! It's way too much.


You're right there. I can tell you that the publisher of Expat Magazine (who also do MM2H Visa applications, and advise foreign residents) are telling their clients right now that they must avoid purchasing property in Malaysia.
Wealthy expats are moving away as a result of the bad treatment they got during Covid lockdown, and the recent threats of major changes to the MM2H Visa program and the Foreign Remittances taxation. Malaysia is no longer a friendly or welcoming location for their money. The risk of further earthquake announcements which disrupt their lives and plans is too high. They are moving to places where they are wanted and are treated better.

This post has been edited by Colada: Jan 17 2022, 04:14 PM

First of all, I am not a property agent. I used to work as Finance Manager for one of the listed property developer in Malaysia and still actively catch up with my ex-colleagues and agent friends to keep up with the knowledge, not like some keyboard warriors who don't know the practice in different states and did not bother to even ask before making an offer.

There is a reason why property developers and other owners are willing to pay the 2%-3% for agents to sell their property instead of doing it on their own. If you think it is that easy to sell a RM3 million property and earn RM90,000 by just posting on iProperty and Property Guru, then go ahead and start your own agency.

Throughout my 2 years with the property developer, luxury properties sold by sales staff and agents can be counted on one hand. Most of the time they are sold by bosses directly through their connections or in the case of commercial and industrial properties, by directly contacting the management of other companies or REITS.

As for the mid-range or affordable properties, there will be another 10 to 50 different agents selling the same property, and all will be using the same advertising method you mentioned. Hardly can get any good lead unless pay more to bump up listing. Some agents will even use drones or professional videographer/photographer and organise roadshows to attract more viewings. These costs are obviously a lot more expensive than flipping burgers.

And for every 10 people that responded to the listing, sometimes only one will end up buying the property. So if already bring 9 people to view the property but another agent close first, too bad, all the time and costs invested wasted. Even if sales close already, if buyers cannot get loan or high enough margin of financing or there is an issue with title transfer, too bad, won't get a single cent of commission.

All the successful agents that I know of always find more ways to market their property, diligently follow up with bankers, buyers and lawyers to make sure no hiccup throughout the whole process, not like what you say sit there waiting for it to close and no function after deposit paid. There is a reason why some earn more than RM10k per month while others can't close any sales and drop out after few months.

I close my case here and won't respond to this thread anymore.

Good for you.


I probably could - now that I see the level of rewards - and I can absolutely 100% Guarantee you (!) that I would do a better job than the cack handed amateurs I see on my viewings. Honestly, 90% of them haven't a clue how to sell! Their photos of the property usually stink, and they show up looking ill kempt and scruffy. Wear a suit and tie you lazy buggers! You'll project a better image for your client and earn your BIG commission. Maybe you'll even find you start selling way more properties.


Which begs the question - why do they advertise at all??
As someone in the market for a luxury property - I have had no contact from 'bosses'. We're talking about residential property here, not commercial/industrial. I'm sure that's a whole other market.
Oh by the way, yes, we all know that the choice properties in NEW developments are reserved for 'friends' etc. Penthouses and so on - they're always 'already sold' by the time viewing gets opened to the 'ordinary public'. That always leaves a bad taste in my mouth.


Only ever saw that done on a NEW development - not a single subsale unit. You keep referring to apples when I'm talking about pears.


...eh....a single subsale property can only have ONE buyer! Duh.


So go home and reflect on WHAT YOU"RE DOING WRONG?
Try wearing a suit and tie next time you turn up to sell a 3M RM property.


Sh*t happens.


So you're saying that property agents make approaches on the quiet to the Bank that a buyer is applying for a loan to? And what do they expect to acheive by that invasion of privacy? Persuade the Bank that they should loan the money? How would that work? I'm very curious!


Yeah - like I said - too many chancers and amateurs.

[QUOTE]I close my case here and won't respond to this thread anymore.[/QUOTE}

OK, but I have one more point for you.
You are framing your argument in terms that the agent is relying on one property sale. And if it falls through all is lost and wasted. But we all know the fact is agents are handling MULTIPLE properties at the same time, and even if the success rate is 10% or 20% they can still earn a good living.
And it 1% commission on a 3M property (30K RM) isn't good enough - why are they in the business of selling properties at or below 1M? Because even if they would be earning 3% commission on such sales, they still only pick up 30K RM (which you say isn't worth getting out of bed for).

Final question - WHAT extra 'work' does an agent do to sell a 3M RM property that he deserves triple the income that he receives for selling a 1M property? 90K RM for doing the same drive up and walkaround.
Not worth it.
Cap the commission - you'll get more sales.

This post has been edited by Colada: Jan 18 2022, 06:17 PM

OK, but I have one more point for you.
You are framing your argument in terms that the agent is relying on one property sale. And if it falls through all is lost and wasted. But we all know the fact is agents are handling MULTIPLE properties at the same time, and even if the success rate is 10% or 20% they can still earn a good living.
And it 1% commission on a 3M property (30K RM) isn't good enough - why are they in the business of selling properties at or below 1M? Because even if they would be earning 3% commission on such sales, they still only pick up 30K RM (which you say isn't worth getting out of bed for).

Final question - WHAT extra 'work' does an agent do to sell a 3M RM property that he deserves triple the income that he receives for selling a 1M property? 90K RM for doing the same drive up and walkaround.
Not worth it.
Cap the commission - you'll get more sales.

[/quote]

I won't respond to the earlier bit since I already said so and the argument will never end if I continue.

I never mention or imply in any way that property agent only work on one property at one time. Let's say they work on 10 in a month and the success rate is 10%, meaning they will only close 1 sales, and let's say it is for a RM500,000 property, so the gross commission is RM15,000 and the net commission is RM12,000. On the surface, yes, very lucrative. But the advertising and travelling costs are spent on all 10 properties, not just 1. Lets say average cost is RM500 per property, so the costs are RM5,000 for that month. Net income is RM7,000. And the agent might only receive the commission in a few months while the costs are all upfront. There might also be quiet months where everyone is not around so can't close any sales. All these uncertainties and upfront capital are factored into the commission, hence many homeowners still engage agents to sell. You might feel RM7,000/month is still very good income, but for RM7,000, I would rather work in office and collect my pay cheque on time every month.

As for your final question, ever heard of the bell curve? Selling a RM1M property and you can target maybe 20%-30% of the population while selling a RM3M property, you can only target maybe the top 1% of the population, those at the very top of the pyramid who won't go to iProperty or Property Guru at all. Their connections are wide enough that every time they have money to invest, there will be many people lining up to pitch their proposals. So need to invest a lot of time to break into their circles and convince them to buy from you.

The difference is like selling a LV handbag and a normal unbranded handbag. Common sense really. If it is the same effort, all agents will only sell luxury goods. Reality is majority of transactions come from the bread and butter RM300,000 to RM700,000 apartments and terrace houses. Can look up for the NAPIC transaction data to know whether this is the truth or not. If only specialise in RM3M property, need to work many months or even years before can close even one sales, end up maybe same income as others also. Capping the commission at RM30,000 for properties above RM3M? You can try to do it for your own property but I can already tell half of the agent won't even entertain you while the other half will just take it but won't put in much effort to market it. Even if there is an interested buyer who enquire about your property, you can expect the agent to heavily persuade the buyer to buy another property instead.

I wish you luck in your property agency venture and property investments.