Lecture 1 & 2 estate agency

8,631 views

Published on

Published in: Business, Real Estate
3 Comments
8 Likes
Statistics
Notes
No Downloads
Views
Total views
8,631
On SlideShare
0
From Embeds
0
Number of Embeds
5
Actions
Shares
0
Downloads
381
Comments
3
Likes
8
Embeds 0
No embeds

No notes for slide

Lecture 1 & 2 estate agency

  1. 1. 10/07/11 EMT612 - The Practice of Estate Agency 1 MOHAMAD ISA ABDULLAH,MOHAMAD ISA ABDULLAH, Department of Estate Management,Department of Estate Management, Faculty of Architecture, Planning and Surveying,Faculty of Architecture, Planning and Surveying, MARA University of Technology,MARA University of Technology, 40450 Shah Alam, Selangor Darul Ehsan, Malaysia.40450 Shah Alam, Selangor Darul Ehsan, Malaysia. Email: isa006@salam.uitm.edu.myEmail: isa006@salam.uitm.edu.my ESTATE AGENCYESTATE AGENCY (EMT 612)(EMT 612)
  2. 2. 10/07/11 EMT612 - The Practice of Estate Agency 2 Estate Agency PROFESSIONAL PROPERTY CONSULTANCY SERVICES PROFESSIONAL PROPERTY CONSULTANCY SERVICES Property Valuation Property Management Market Research/ Feasibility Studies Project Management
  3. 3. The property market operates within the inherent imperfect condition. There are : No centralised property market. Provides form of formal market Changing roles within the dynamic nature of property market Previously was referred to property brokers, fly by night, bogus etc. Current need is imminent. 10/07/11 EMT612 - The Practice of Estate Agency 3 1.0 Introduction1.0 Introduction
  4. 4. Nigel Stephen : “Estate agency practice, if not in itself a purely professional occupation, is one that should be conducted by men and women with a background of professional knowledge and follow ethical standards prescribed by the leading professional bodies of the land.” Prof John Greeve: “Estate agency is not simply b commercial activity, as one side claims, neither is it a non-commercial profession. It is a combination of the two and the elements of both the salesmanship and professionalism should be combined systematically to the greater advantage of the consumer.” 10/07/11 EMT612 - The Practice of Estate Agency 4 2.0 Definitions2.0 Definitions
  5. 5. • Estate Agent is a European English term for a person or business that arranges the selling, renting or management of homes, land and other buildings, although an agent that specialises in renting is often called a Letting Agent. • Estate agents are mainly engaged in the marketing of property available for sale and a Solicitor or Licensed Conveyancer is used to prepare the legal documents. • In Scotland, however, many solicitors also act as estate agents, a practice that is rare in England and Wales. 10/07/11 EMT612 - The Practice of Estate Agency 5 Estate Agents (Cont’d)Estate Agents (Cont’d)
  6. 6. • The term originally referred to a person responsible for managing a landed estate, while those engaged in the buying and selling of homes were "house agents", and those selling land were "land agents". • However, during the 20th century "estate agent" started to be used as a generic term, perhaps because it was thought to sound more impressive. • Estate agent is roughly synonymous in the United States with the term real estate broker. • Estate agent is the term used in the United Kingdom to describe a person or organization whose business is to market real estate on behalf of clients, but there are significant differences between the actions and liabilities of brokers and estate agents in each country. 10/07/11 EMT612 - The Practice of Estate Agency 6 Origin of Estate Agents (Cont’d)Origin of Estate Agents (Cont’d)
  7. 7. Real Estate Agent – A person who obtained a professional Estate Agent registration with Board of Valuers, Appraisers and Estate Agents Malaysia. Real Estate Negotiator – A person who works under the supervision of a registered Real Estate Agent/Firm 10/07/11 EMT612 - The Practice of Estate Agency 7 3.0 Who is Real Estate Agents3.0 Who is Real Estate Agents
  8. 8. Part of the scope of work within the estate management discipline. Full recognised professional, can sue and be sued. Challenging Rewarding Flexible time Free entry, no limit of job opportunities Ability to build own business 10/07/11 EMT612 - The Practice of Estate Agency 8 Careers of Estate AgentsCareers of Estate Agents
  9. 9. In term of business, they operate within two categories of firms: • Valuation firms – denoted by VE • Estate agent firms – E • The person working under the estate agent is called negotiators. Each agent is allowed to employed not more than 20 negotiators. 10/07/11 EMT612 - The Practice of Estate Agency 9 Careers of Estate AgentsCareers of Estate Agents
  10. 10. • The nature of work of estate agents in Malaysia as prescribed under the Sc 2 of Valuers, Appraisers and Estate Agents Act 1981 (Act 242): “actings or holding one self out to the public as ready to act, for a commission, fee, reward or other consideration, as an agent is respect of the sale or other disposal of lands and buildings and any interest therein or the purchase or other acquisition of lands and buildings and any interest therein or in respect of the leasing or letting lands and buildings and any interest therein.” 10/07/11 EMT612 - The Practice of Estate Agency 10 3.1 Estate Agents in Malaysia3.1 Estate Agents in Malaysia
  11. 11. • As defined under Section 22C of the Valuers, Appraisers and Estate Agents Act 1981, only registered estate agents can practise, carry on business or take up employment as an estate agent. • They provide a service: – buying, – selling, – leasing properties for clients so that, optimum returns can be achieved. 10/07/11 EMT612 - The Practice of Estate Agency 11 Estate Agents (Cont’d)Estate Agents (Cont’d)
  12. 12. In executing day to day work of an estate agent, there are some of the roles of estate agent. 1. taking instructions 2. Record keeping 3. Conduct marketing/promotion 4. Providing information 5. Property inspection and viewing 6. Making the sale/purchasing then conclude 7. Confirming the details, contract 8. Handling the deposit 9. Completion 10/07/11 EMT612 - The Practice of Estate Agency 12 Basic Roles of Estate Agent
  13. 13. 1. Inspecting the property. 2. Providing a market assessment. 3. Researching comparative evidence. 4. Research the Certificate of Title and any documents relating to encumbrances. 5. Provision of a marketing plan that would consider the price, the most - suitable type of promotion, the attributes of the property. 6. Recommend ways to optimize the appeal of the property. 7. Recommend the most appropriate types of advertising. 8. Determine and research any existing tenancy arrangements. 9. Liaise with the occupiers to co-ordinate inspections. 10. Arrange suitable signage. 11. Arrange photography. 10/07/11 EMT612 - The Practice of Estate Agency 13 Service of Estate AgentsService of Estate Agents
  14. 14. 12. Design, produce, and lodge advertising and promotional material. 13. Promote the property to prospective purchasers. 14. Promote the property to other Real Estate Agents. 15. Conduct Open House programmes. 16. Maintain a register of inspections. 17. Provide reports on the level of buyer interest and market feedback. 18. Quality prospective purchasers. 19. Recommend suitable level of deposit. 20. Prepare the Offer and Acceptance documents and to include special conditions. 21. To present any written offers to the seller. 22. Receipt deposit to be held in the Real Estate Agent Clients' account. 23. Explain the effect of any variations to the Contact that may be requested by the seller. 10/07/11 EMT612 - The Practice of Estate Agency 14 Service of Estate AgentsService of Estate Agents
  15. 15. Those that work in the lettings area of estate agency also: – vet prospective tenants by collecting references and credit checks; – ensure properties meet legal and health and safety requirements, i.e. gas safety certificates; – draw up tenancy agreement contracts; – collect or organise rent payments; – act as a property manager and resolve any issues that arise with properties. 10/07/11 EMT612 - The Practice of Estate Agency 15 Basic Roles of Estate Agent (Cont’d)
  16. 16. • Practice of estate agency in M’sia is governed by Valuers, Appraisers and Estate Agents Act 1981 (the Act 242). • There are about 1900 registered estate agents in the country – public and private practitioners. • Condition to qualify as required under the Act Sc 22A – Minimum age at 21 yrs old. – Malaysian citizen. – Registered as probationary estate agent (2 yrs) – Not and undischarged bankrupt. – Passes the Board’s examination or posses recognised qualification. (Section 22D) 10/07/11 EMT612 - The Practice of Estate Agency 16 4.0 Practice of Estate Agents4.0 Practice of Estate Agents
  17. 17. • FOR REGISTRATION AS AN ESTATE AGENTS • ACADEMIC QUALIFICATIONS 1. All the academic qualifications recognised by the Board for registration as valuers. 2. Other academic qualifications: MALAYSIA a)) University Technology Mara (UiTM) – Diploma in Estate Management (1995 onwards) b) University Technology Malaysia (UTM) – Diploma in Valuation (2000 onwards) – Bachelor of Science (Land Administration and Development) • AUSTRALIA a) Moorabin College of Technical and Further Education, Victoria – Advance Certificate Course in Estate Agency 10/07/11 EMT612 - The Practice of Estate Agency 17 4.0 Practice of Estate Agents4.0 Practice of Estate Agents
  18. 18. TEST OF PROFESSIONAL COMPETENCE RECOGNISED BY THE BOARD FOR REGISTRATION AS AN ESTATE AGENTS • MALAYSIA a) Institution of Surveyors Malaysia – Passed Test of Professional Competence for General Practice Surveying – Passed Test of Professional Competence for Property Consultancy and Valuation Surveying – Passed Test of Professional Competence conducted by the Board of Valuers, Appraisers & Estate Agents. 10/07/11 EMT612 - The Practice of Estate Agency 18 4.0 Practice of Estate Agents4.0 Practice of Estate Agents
  19. 19. • PROFESSIONAL QUALIFICATIONS 1. All the professional qualifications recognised by the Board for registration as valuers. 2. Board of Valuers, Appraisers and Estate Agents (a) Certificate in Estate Agency (b) Diploma in Estate Agency 3. Institution of Surveyors (Malaysia) a) General Practice Intermediate Examination b) Property Consultancy and Valuation Surveying Intermediate Examination 4. INSPENS (Institute Penilaian Negara) a) Certificate of Estate Agency 10/07/11 EMT612 - The Practice of Estate Agency 19 4.0 Practice of Estate Agents4.0 Practice of Estate Agents
  20. 20. • Professional knowledge – proficient in the matters regarding to properly and the industry. E.g land laws, building construction, town planning, economics etc. Acquired through formal education. • Ethical knowledge – Have high ethical standards, integrity, good personality etc. Prescribed by the law, standards etc. • Skills – Skills required in execute the business such as marketing skills, negotiation skills, interpersonal skills etc. – Acquired through rigorous training and experience. • 10/07/11 EMT612 - The Practice of Estate Agency 20 The knowledge required can be divided into :
  21. 21. Ten Point Commitment to Professionalism 1. Commited to Professionalism 2. Uphold Integrity & maintain ethic standards 3. Clients come first - be proactive with value and add services 4. Expose illegal's & those leasing authority to practice 5. Honour Co Agency agreements 6. Get Written and Exclusive listings 7. Register & Certify all Negotiators 8. No poster war 9. Office & E numbers, MIEA logo on all point of sale communicatioins 10. Be united, releavant & progressive in all our actions 10/07/11 EMT612 - The Practice of Estate Agency 21 The knowledge required can be divided into :
  22. 22. There are also differences in the types of work carried out, depending on the specialism of the agency. There are common tasks involved and typical work activities tend to include: – looking at and collecting information about a property, and arranging for photographs to be taken; – visiting and talking to the sellers about their property and its special features; – estimating the value of the property; – marketing and promoting properties for sale; 10/07/11 EMT612 - The Practice of Estate Agency 22 Basic Roles of Estate Agent (cont'd)
  23. 23. – representing the sellers in negotiation with prospective buyers; – monitoring sales as they proceed and liaising with all interested parties including mortgage brokers, solicitors, surveyors and other estate agents; – advising clients and helping buyers to decide what they want to buy; – making sure that a price is agreed that is acceptable to both buyer and seller; – keeping up to date with trends in the local residential property market, as well as the commercial market. 10/07/11 EMT612 - The Practice of Estate Agency 23 Basic Roles of Estate Agent (Cont’d)
  24. 24.  They are registered with the Board of Valuers., Appraisers & Estate Agents.  They are governed by an Act of Parliament.  Estate Agents are recognized by the Government.  They are qualified, knowledgeable & experienced.  They are accountable to the clients for their actions.  They more understand about the respective laws relating to property deals.  They are well informed about currents events of property market.  They are accountable for monies collected - clients account.  Real Estate Agents save time & money - do it right the first time around.  Real Estate Agents advise on property values and negotiate prices.  The vendors life is made easier as the Agents take care of all details. 10/07/11 EMT612 - The Practice of Estate Agency 24 THE ADVANTAGES OF ENGAGING A CERIFIED AGENT IN A SALE AND PURCHASE OF A PROPERTY
  25. 25. • The services provided involves the acting as agent for sale, purchase and letting of all types of real estate ranging from property interests in simple residential properties to property interests in commercial complexes, industrial and agricultural properties as well as specialised properties such as timber concessions, quarries, plant and machinery, vacant lands and individual houses to high-rise building. It also covers advice on an implementation of marketing strategies for commercial, retail, industrial, office space and new development. 10/07/11 EMT612 - The Practice of Estate Agency 25 Type of Estate Agency
  26. 26. i. Exclusive Agency  Exclusive agency refers to the instruction from a principal to a single estate agent to act on his behalf.  The principal may make introductions but will leave the closing of the transaction to the estate agent.  The principal must pay the appointed estate agent the agreed fee even if the estate agent was not the effective cause of the deal. 10/07/11 EMT612 - The Practice of Estate Agency 26 Type of Estate Agency (Cont’d)
  27. 27. ii.Sole Agency Just as an exclusive agency, a single estate agent is engaged. The principal may, however, wish to reserve the right to close deals himself and is not obligated to pay the agent his fee in addition to making introductions or an arrangement may be made for a discount in fees where the principal plays an active role. 10/07/11 EMT612 - The Practice of Estate Agency 27 Type of Estate Agency (Cont’d)
  28. 28. iii. Sole Joint Agency This is a variation of the Sole Agency. The estate agent works together with the principal as a team and the fee is divided on a pre-agreed formula. The principal has the flexibility to compensate additional estate agents and at the same time maintain the advantage of having one estate agent in control. 10/07/11 EMT612 - The Practice of Estate Agency 28 Type of Estate Agency (Cont’d)
  29. 29. iv. Joint Agency This is where more than one estate agent is appointed and only the estate agent who secured the deals gets paid. The number of agents appointed is limited and each is aware of the appointment of the others. 10/07/11 EMT612 - The Practice of Estate Agency 29 Type of Estate Agency (Cont’d)
  30. 30. v. Ad Hoc Basis or commonly referred to as “Open Listing”  The principal can engage an unlimited number of estate agents on an adhoc basis and fees are paid only on successful conclusion of the estate agency transaction.  Apart from the types of agencies listed there is also the practice of co-agency or co-broking between estate agents.  The appointed estate agent enlists the services of another estate agent(s) and shares the agency fees accordingly.  In such an instance the principal is usually not a party to the arrangement. 10/07/11 EMT612 - The Practice of Estate Agency 30 Type of Estate Agency (Cont’d)
  31. 31. 1) Services 2) Conduct of registered estate agent 3) Level of competence 4) Need to keep informed 5) Protection of public interest 6) Disclosed personal interest related on the transaction 10/07/11 EMT612 - The Practice of Estate Agency 31 Code of Conduct and EthicsCode of Conduct and Ethics
  32. 32. 7) Rebate or profits 8) Participation of others in profits 9) Financial obligations 10) Acting for two parties 11) Professional work by registered estate agent in employment 12) Activities that constitute unauthorised practice of law 13) Seeking unfair advantage over other registered estate agents10/07/11 EMT612 - The Practice of Estate Agency 32 Code of Conduct and EthicsCode of Conduct and Ethics
  33. 33. 14) Engaging in practices inconsistence with agency of another registered estate agent 15) Soliciting services of employee of another registered estate agent 16) Criticisms on fellow registeres EA 17) Reference to the Board of erring registered EA 18) Accuracy of statements 19) Signature on report, etc 10/07/11 EMT612 - The Practice of Estate Agency 33 Code of Conduct and EthicsCode of Conduct and Ethics
  34. 34. 21) Associateship and affiliation 22) Office and branch offices 23) Liability for offences by firm 24) Conduct in proceedings before Board 25)Conduct in proceedings before judicial bodies 26)Board to issue standards, directives, circulars and guidelines on real estate agent practices 27) Performance of obligations under the Act and Rules.10/07/11 EMT612 - The Practice of Estate Agency 34 Code of Conduct and EthicsCode of Conduct and Ethics
  35. 35. Professional Fees: Real Estate Agency 1. Sale or Purchase (a) Land and Buildings - 3% (b) Chattels including Plant and Machinery – 10% of the proceeds Minimum Fee: As above, but may be subject to a maximum discount of 30% and the minimum fee shall be RM1,000 per case. The above scale applies to any sale or purchase by way of private treaty, tender or any other mode of disposal or acquisition. For sale and marketing of projects by registered estate agents, the fees are to be agreed between the estate agent and client. The above scale of fees shall not apply to the sale of foreign properties in Malaysia or sale of Malaysian properties in foreign countries. 10/07/11 EMT654/686 - Professional Practice II 35
  36. 36. Cont’d 2. Lettings Duration of Tenancy Maximum Fee (equivalent to) Up to 3 years 1.25 months gross rental Exceeding 3 years up to 4 years 1.50 months gross rental Exceeding 4 years up to 5 years 1.75 months gross rental Exceeding 5 years (with option for renewal) 1.75 months gross rental Exceeding 5 years (without option for renewal) 1.75 months gross rental plus 0.25 months gross rental for every additional year Minimum Fee: As above, but may be subject to a maximum discount of 30% or a minimum fee of 1 month rental. For tenancies less than one year, the fee may be calculated on pro rata basis. The above scale shall not apply to serviced offices or apartments or any other premises of a similar nature. 10/07/11 EMT654/686 - Professional Practice II 36
  37. 37. Cont’d 3. Rent Reviews 50% of the fees chargeable under lettings 4. Additional Claims In addition to the fees stated in items 1 to 3, claims may be made for - – the cost of printing, plans, copies of documents, lithography, travelling (only where the distance between the estate agent's office and the property is more than 40 km) and other expenses actually incurred; – the cost of media advertisements, signboards, brochures and other promotional material. NOTE: The above additional claims may not be incurred by the registered estate agent without prior concurrence to the client. 10/07/11 EMT654/686 - Professional Practice II 37
  38. 38. BOVEA Overview • The Board of Valuers, Appraisers and Estate Agents Malaysia was set up in 1981 under the purview of the Ministry of Finance, Malaysia. The setup and operation of this Board is governed by the provision of Valuers, Appraisers and Estate Agents Act 1981. Its primary function is to regulate the Valuers, Appraisers and Estate Agents practising in Malaysia. 10/07/11 EMT612 - The Practice of Estate Agency 38
  39. 39. Functions of BOVEA To keep and maintain the Register of Valuers, Appraisers and Estate Agents, Probationary Valuers and Probationary Estate Agents and firms of Valuers, Appraisers and Estate Agents. • To approve and reject applications for registration. • To hold disciplinary proceedings. • To conduct examinations. • To prescribe Scale of Fees. • To regulate the professional Conduct/Ethics of Valuers, Appraisers and Estate Agents. • To award scholarships 10/07/11 EMT612 - The Practice of Estate Agency 39
  40. 40. • Number of Valuers, Appraisers and Estate Agents • Under the three registers maintained by the Board, there are: 10/07/11 EMT612 - The Practice of Estate Agency 40 Firms Numbers Firm Type Firms Valuer & Estate Agent (VE) 288 Valuers (V) 72 Appraisers & Estate Agent (AE) 10 Estate Agents (E) 885 Estate Agent & Property Management (EPM) 8 Property Management (PM) 39 Firms
  41. 41. • Number of Valuers, Appraisers and Estate Agents • Under the three registers maintained by the Board, there are: 10/07/11 EMT612 - The Practice of Estate Agency 41 Firms Registered Members Licence Type Members Registered Valuers (V) 640 Registered Appraisers (A) 19 Registered Estate Agents (E) 1545
  42. 42. • Number of Valuers, Appraisers and Estate Agents • Under the three registers maintained by the Board, there are: 10/07/11 EMT612 - The Practice of Estate Agency 42 Firms Probationary Members Licence Type Members Probationary Valuers (PV) 572 Probationary Estate Agents (PEA) 281 Probationary Members
  43. 43. MIEA • The Malaysian Institute of Estate Agents (MIEA) is the recognised body representing all registered estate agents in the country. • Formerly known as the Malaysian Association of Real Estate Agents (MAREA), it was formed in 1974 but officially registered in April 1977 with the Registrar of Societies. • The name was changed on May 3, 1989 to reflect a more professional image of the organisation. 10/07/11 EMT612 - The Practice of Estate Agency 43 MALAYSIAN INSTITUTE OF ESTATE AGENTS (MIEA)
  44. 44. Objectives of MIEA 1. Address critical issues that affect the industry 2. Cultivate a positive public perception of the profession 3. Safeguard and protect the interests of its members and the general public 4. Uphold high professional standards, ethics and integrity among its members 5. Commit to continuous education to keep its members progressive and up-to-date to remain competitive 6. Raise public awareness and encourage them to only use the services of registered estate agents 10/07/11 EMT612 - The Practice of Estate Agency 44 THE FUNCTION OF MIEA
  45. 45. 10/07/11 EMT612 - The Practice of Estate Agency 45 Prepared by: Mohamad Isa Abdullah Department of Estate Management Faculty of Architecture Planning & Surveying, University Technology MARA, Shah Alam

×