The process of selling a property is an extremely crucial process that needs to be understood by both the owner of the property as well as the buyer.
If mistaken or careless, it can lead to a huge impact to the owner or buyer.
If a property is sold or bought without an agent, the owner and seller must understand the procedure behind buying and selling a property by themselves, alongside the advice given by the lawyer.
However, through the use of a property agent’s services, the agent will explain, guide and take care of the interests of the owner and buyer throughout the process of buying and selling the property.
6 Guide to Sell Property Using Property Agent Services
This means that there is a need to find a trustworthy property agent. He/she must be a registered and licensed agent.
- Find a registered property agent
- Formally appoint the agent to sell the property.
- Provide the information and documents required by the agent.
- Selling a property that is being rented out. How an agent can help.
- Can the owner hold the home booking fee?
- When does the service of a property agent end?
The process of buying a home is sometimes easy and straightforward, and sometimes complex and difficult.
Based on my experience, the ease of selling a property depends on several factors. Among them are:
- Property status (freehold, leasehold, low cost, Malay-reserved, caveat, etc.)
- State of the property (building structure, location, etc.)
- Selling price (below or over the market)
- Role of all parties (real estate agent, owner, buyer, lawyer, bank, etc.)
The service of the property real estate agent is crucial from the moment of appointment to the moment the deal is closed and transfer of ownership.
The Property real estate agent assists all parties and acts as a facilitator.
This article on the Guide to Sell Property Using Property Real Estate Agent Services is dedicated to guide property owners who want to sell a property using the service of a Property real estate agent.
Guide to Sell Property Using Property Real Estate Agent Services – Property Owner
To facilitate public understanding, the reference to a Property Real Estate Agent here includes the Real Estate Negotiator.
Based on a hierarchy, a Real Estate Negotiator is an individual who is appointed under the Real Estate Agent.
#1 Find a Registered Property Agent
Never use the services of an unlicensed broker. The way to identify a Real Estate Agent is by asking for the REN Tag and REN Number – for example, mine is REN 17585 and I have my own registered agency. You can check it out here.
#2 Formally Appoint the Agent to Sell the Property
The agent will prepare an appointment letter that must be signed by the owner. The letter serves as the formal appointment of the agent to sell the property.
Note: Things to keep in mind when signing the appointment letter:
- Type of appointment. Usually there are two types of appointments, which are Exclusive and Non-Exclusive.
- Appointment duration (for exclusive).
- Selling price and agent service fee.
- GST 6%. GST is charged based on the agent’s service fee. For example, if the agent fee is 3%, then the GST is 0.18%. So, the total amount is 3.18%.
#3 Provide The Information and Documents Required by The Agent
Information needed include:
- Property specification (land area, type, renovation, etc.)
- Property ownership (owner – the name that is written in the grant or sale and purchase agreement)
- Bank loan (bank loan balance, type of loan – bank, government or company)
- Owner status. State truthfully if the owner has issues such as declared bankrupt and so on.
Documents needed include:
- Copy of property grant
- Copy of Sale and Purchase Agreement (full pages or relevant pages)
- Copy of owner IC (if there are 2 names, then 2 copies of the IC are needed)
- Copy of Home Loan Agreement to be sold
- Payment receipt of current Land Tax and Tax Assessment
#4 Selling a Property That is Being Rented out. How an Agent Can Help
If the house to be sold is being rented out, it is best if the owner informs the tenant first to avoid misunderstanding between the agent and the tenant.
“Hey, I’m selling this house. I’ve appointed an agent to manage this. Don’t worry, you can still continue to rent here.”
Then, the owner can pass the number of the tenant to the agent for the viewing process and so on.
Note: What if the tenant suddenly makes the decision to stop renting or cancel the contract because the house is being sold? The solution:
- The owner must inform the tenant that the selling process will take 4 months at least, so the tenant can continue to stay at the property until selling process is complete.
- If the buyer wants to continue renting the property, the tenant can continue renting until the transfer of ownership to the buyer.
Can you breach or terminate the Tenancy Agreement (TA) before the expiry date?
There are 3 situations:
- Having a valid TA with stamping. The owner must mention to the buyer and agent that the property has a TA and needs to be followed until the expiry date of the contract. If the buyer wants to stay at the house or raise the rental rate, it must be done after the end of the contract.
- Having a TA that is not valid (no stamping). This depends on the ethics and discretion between the owner and tenant. Do not be unfair to the tenant by expelling them from the property or by raising the rental rate without prior notice.
- Not having a TA. This depends on the owner. It is best to discuss first with the tenant. If the owner is desperate to sell, this will depend on the owner.
#5 Can The Owner Take The Home Booking Fee?
In the property agent’s ethics and way of work, the booking fee or earnest deposit will be deposited into the estate agency’s client account. This account is not a profit account.
Thus, it is PROHIBITED for a registered property agent to deposit the money to a personal or company account, unless if it is an unregistered broker who is holding the money.
This is why buyers feel comfortable and sure when they pay the booking fee through property agent, because the money will be safe. Read, Is the booking fee returned if the loan does not go through?
#6 When Does The Service of a Property Agent End?
Actually, the property agent’s service will end after signing the sale and purchase agreement (SPA). After that, the process will be foreclosed by the SPA lawyer.
However, for cases of buying and selling through a government / company loan, or for leasehold property, the agent will play a role until the loan is approved.
“Well, then the agent’s task is easy!”
Don’t get me wrong, this is only the formal way of doing things. After SPA, the lawyer will handle the rest. The agent cannot take over the role of the lawyer.
The agent will play a role as the facilitator and representative of the owner and buyer until everything is settled.
In short,
If you wish to obtain the services of an agent, choose an agent who is committed and can be trusted. Never ever deal with a broker.
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