Buying a home, including in Malaysia, can be a nerve-wracking experience especially when it comes to negotiating the price. The more so for those who are just about to purchase their first houses without the assistance of any real estate agent.
Unless you are good at haggling, the probability of getting the seller to come into agreement with your proposed price is quite slim. Even worse, you may skip negotiating after being dazzled by the glittering first impression the house gives you.
The most convenient way to keep those butterflies away from your stomach when confronting the seller is by hiring a real estate agent.
An experienced and honest real estate agent will be your worthy companion in the process of negotiation since he or she knows every trick of the game in the industry. Besides, they speak in the same language as the seller or his or her agent.
That is understandable because they make a living by negotiating for the best price on behalf of their clients and most importantly, they help you make an informed decision.
Why hire an agent?
There are a number of reasons for hiring a real estate agent. First, they are well-trained and experienced in the art of negotiating the most favorable price possible for their clients.
Maybe you are a good haggler yourself and capable of persuading the seller to give you a 3% discount. Yet, hiring a real estate agent may get you a better deal, let say, a 5% discount on the final price.
To make it clearer, if the seller opens the price at RM500,000, you may get the house at RM485,000 after you are done haggling by yourself.
In comparison, the agent may get the seller to agree to part with his or her property at RM475,000. Do the simple math and you will find there is a RM10,000 difference between those two approaches.
Second, real estate agents can also be your only true friends in this cruel and wicked world. Well, that sounds a little bit melodramatic.
In some ways, a good real estate agent performs better than your Facebook BFFs. He or she is willing to go the extra mile to ensure you get the best deal for the house by checking the defects, applying for a home loan and insurance, identifying nearby amenities or finding out the crime rate in the area.
The fees ain’t free
The best things in life are free, so they say. But, that saying is not applicable to real estate agents. That is understandable because negotiating for the sale and purchase of real estate is their main source of income.
As stated by the Malaysian Institute of Estate Agents (MIEA), the commission fee for real estate agents is set at a maximum of 3% of the property sale price. That rate is only applicable for the sale and purchase of properties in Malaysia.
How about the minimum rate? Well, the least you must pay is RM1,000 per property. Let say the sale price of the property is 30,000 and if you apply the maximum commission fee of 3%, by rights you are supposed to pay only RM900 to the agent.
But, in this case, you still have to pay a minimum commission fee of RM1,000 to the real estate agent.
So, take some time to do the calculation first to help you decide whether it will be moneywise to appoint a real estate agent to deal on your behalf.
Technically, the burden of paying the agent’s commission fee is borne by the seller. Nevertheless, the seller may transfer the cost to the buyer by adding the commission fee to the final price.
Don’t be surprised, you may end up paying the very same price that the seller asks initially.
Calm as a cucumber
After some deliberate thinking, you agree to appoint a real estate agent. Then, comes the moment for both of you to take a look at the house you are interested in buying.
The best thing to do is to let the agent do all the talking and negotiating. After all, that is the main reason you hire him or her.
Yes, you may chip in once in a while but keep it at a bare minimum. Avoid being perky and showing you are very interested while inspecting the house; otherwise, the agent will have a hard time to get the best price from the seller.
Taking a picture of the house or a selfie in front of it is definitely a no-no. Don’t do that, even when the seller is not around.
Some nosy neighbors may see you doing that and relay the information to the seller. Once the seller learns you are excited about the house, it will be hard for the agent to get the best deal for you.
Words of advice
Please make an effort to verify you are dealing with a REAL real estate agent. If someone approaches you and present his or her business card with the Real Estate Negotiator (REN) number printed on it, don’t take it at face value yet.
Run a check with relevant authorities such as MIEA first. In fact, you can go to the MIEA website and perform a search there.
Or, to save you from the trouble of appointing a fake real estate agent, just pick one that suits your criteria from the long list of REN members listed on the MIEA website.
Happy hunting and may you get the best deal for your dream house.