Imagine yourselves with fast cars, fancy outfits, and rich clients under your wing. Having a lifestyle of a millionaire socialite, getting the chance to meet inspiring people every day while climbing your way up in the business game, the allure of the property industry is undeniable.
However, property agents know that property business is not as easy as it seems to be. Whether it is about getting your licence and hunting for the right property or scoring maximum sales commission, there is no doubting the fact that a property agent job needs rigorous hard work.
Property agents are paid based on the commission of a property transaction and the amount that will be paid varies depending on the property owner or developer and property firm. Here are some of the basic rules in determining the sales commission for Malaysian property agents:
The Basics of a Sales Commission for Property Agents in Malaysia
According to MIEA, the sales commission for the purchase of a subsale or a second-hand property in Malaysia is up to 3.00%. However, if the property is a brand new project, the property agent should be entitled to an agreed commission between the agent and the developer through mutual understanding.
For example, if a subsale property sells for RM500,000, then the property agent can expect to earn up to RM15,000, excluding the Sales and Service Tax (SST). Still, this requires having an excellent marketing strategy along with effective negotiation skills.
In Malaysia, property agent sales commissions vary from property firm to property firm so it is important that you do your own research on the property firm’s incentive system prior to signing up as a property agent with them.
Some property firms offer tiered commission schemes which mean property agents receive a certain percentage of property transaction commission based on the property sales price, such as 1.50% for the property sold at RM1 to RM500,000, 2.00% for the property sold at RM500,001 to RM1,000,000 and so forth.
On the other hand, there are also property firms that do not have a property price based scheme so agents will receive the same percentage of sales commission usually between 1.50% to 2.85%. Depending on the experiences and contributions of the property agent towards the firm.
Nonetheless, the sales commission for property agents will be entirely up to the property owners or developers they represent.
Extra Rewards From a Third Party Referral Programme
It is not uncommon for property agents in Malaysia to receive referral fees from banks or lawyers as a reward you get in exchange for the referral provided. In short, you receive a percentage of the commission for bringing an influx of customers.
For example, Hong Leong Bank offers Referral Rewards Programme (RRP) to property agents for referrals of customers to the Bank in terms of property financing. Similarly, the rate of the mentioned referral fee program is 0.10% for every RM1 of the approved loan amount, rounded to the nearest Malaysian Ringgit.
When it comes to property agents in Malaysia, you can expect property agent referral fees will be different for every property firm. However, one thing is for sure: all property agents strive to receive the best deal that benefits both the property agent and the property owner or developer.
Bonuses Are Paid to Agents Who Achieve Certain Milestones
In property, bonuses are paid to property agents who achieve certain milestones. Additionally, there are other bonuses that property agents can earn for reaching the set target in terms of property sales and achieving all pending tasks on time.
As an incentive, property agents in Malaysia are given certain bonuses that can be used to purchase a house or a car or go on a holiday vacation. At the same time, some property firms offer additional property agent commissions for property agents who reach a certain property sales target.
The property sales target can be based on the property sales value, property sales price, or property sales volume. Also, most property agents’ commission rate is increased as they gain more experience in property transactions and reach greater milestones.
For example, a property agent might receive an additional 0.50% of the commission rate every year and there is no limit to their property agent commission bonus.
Check out our top property agents achievements.
Still, property agents should be aware that property owners or developers are not legally obliged to pay property agents bonuses as property agents’ commission is based on mutual consent between property agents and property owners or developers.
Pros and Cons of Having a Sales Commission Structure
Property agent commission is the property agent’s main source of income. Here are some pros and cons for property agents working under property firm with sales commission structure:
Pro: Greater Opportunity for Property Agents with Experience
These property agent commission rates will be given to property agents who have experience in the property industry. With experience, property agents can garner more clients so they are capable of earning higher property agent commission rates.
Con: Smaller Opportunity for Newly Licensed Property Agents
Aspiring or new property agents might get discouraged when coming into new property agent firms that offer lower property agent commission rates because property agents in these property firms usually come from a pool of property agents with experience.
Pro: Greater Sales Commission and Referral Fee Opportunities for the Property Agent
It is in the property firm’s best interest to retain its property agents, so they make sure property agents receive additional property agent commission rates, referral fees, and bonuses, depending on the property agent’s performance.
Con: Stagnated Career Growth for Property Agents
When property agents earn property agent commission rates or referral fees, they are more inclined to stick around longer in these property firms because of the opportunity to make money. This does not give property agents advancement opportunities because property agents will be less likely to change property agent firms if they are not earning well.
Get Paid for Your Hard Work
Property agents have a lot on their shoulders in reality. From juggling between work and personal life to trying their best to stay at the top of their game, they ensure to keep the clients protected and well-informed thoroughly.
When it comes to the property business, the amount of money you make really just depends on how hard you work and how skilled you are at finalising a deal. So, take a plunge in and figure it all out as you go!
If you want to know more details about property agent commission rates in Malaysia, feel free to contact us and we would love to help you out.