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What is the difference between a Real Estate Agent (REA) and Real Estate Negotiator (REN)?


*This article was updated on 28 November 2020.

Sorry to burst your bubble, but a real estate agent (REA) is not the same as a real estate negotiator (REN) in Malaysia. No worries, check out our beginner’s guide to get an explanation plus a few helpful tips!

Carlina Teteris | Getty Images

Do you hear that siren’s call beckoning you to start a career in the real estate industry? Buying and selling properties can be both rewarding and difficult. The high-flyers bring home six-figure salaries, some earn just enough, while others only get a few thousand per year. Those who are used to a 9 to 5 job might want to kiss this dream goodbye. Leads will not fall into your lap just like that, you are going to have to hustle, and hustle hard.

Are you still with us?

Before you jump into this exciting and challenging industry, here are 3 important things you need to know about being a real estate agent and a negotiator.

1. What is the difference between a Real Estate Agent (REA) and a Real Estate Negotiator (REN)?

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Real estate agent (REA)

A Real Estate Agent (REA) can own and operate his/her own real estate agency and can employ up to 50 real estate negotiators to assist with the provision of real estate services. These include selling, leasing or searching (buying) a property for clients.

NOTE: As at the time of update in 2021, a REA can now hire a maximum of 50 Real Estate Negotiators (RENs) where they were previously only able to hire a maximum of 30. If the firm has more than one REA, the REN numbers will then be multiplied accordingly.

Given their seniority, a Real Estate Agent (REA) is required to possess the necessary academic qualifications and meet the minimum experience, standards and expertise set by BOVAEA. This includes the Real Estate Diploma Course, a comprehensive set of examinations where there are 12 papers altogether. Applicants will have to obtain a pass for all 6 papers in Part 1 before being allowed to proceed with Part 2.

The exams will be followed by 2-year working experience with an existing agency as a Probationary Estate Agent (PEA) and finally sitting for the oral test of professional competence (TPC). Detailed information pertaining to the procedure involved can be found at the BOVAEA official website.

Once completed, a REA will have his/her name on the Board’s list as a registered estate agent. A REA will also have to apply for a license to set up his/her own agency. A REA will have to carry a formally issued ID tag. This blue-coloured tag will bear the agent’s and agency names as well as an E number (E XXXX).

Real estate negotiator (REN)

A Real Estate Negotiator (REN) is employed by a registered estate agent. Since they do not manage the business themselves, they are not required to obtain a registration under BOVAEAP. However, these individuals must attain the necessary certification before they are allowed to practise. Every REN must attend a full 2 days course, called the Negotiator Certification Course (NCC), in which they will be taught the basics of estate agency as well as the related laws, Acts and standards pertaining to the industry.

Upon completing the course, they will be issued with a certificate of attendance, with which they can look and apply for employment with a registered agency. The employer (firm) will then apply for the REN tag from BOVAEAP.

Once the negotiator has obtained his designated tag and issue number (REN XXXXX), only then can he or she start representing sellers, landlords, buyers and tenants.

A sample of Real Estate Negotiator (REN) tag from BOVAEA
A sample of Real Estate Negotiator (REN) tag from BOVAEA.

The Quick Respond (QR) code on the REN and REA ID cards can be verified by smartphone users. It contains all the negotiator’s information including his/her photograph. Alternatively, the customers can call BOVAEA during office hours at 603-22876666.

CHECK OUT: Deed of Assignment and Grant of Probate: Why are these legal documents important?

2. Rules a Real Estate Agent (REA) and Real Estate Negotiator (REN) must follow

© Mohd Kafii Isa / EyeEm/ Getty Images

Before you ask, “Aiya, why do I have to get a certification? I can just start marketing my services on social media or word of mouth. Well, please note that the Malaysian real estate industry is regulated.

Both agents and negotiator must be registered with the Board of Valuers, Appraisers, Estate Agents & Property Managers (BOVAEA), the industry’s governing board in Malaysia, which is under the purview of the Finance Ministry.

  • A Real Estate Agent (REA) is only allowed to represent one party in a transaction, either the buyer or seller. A REA is bound by codes of conduct and strict laws under the Valuers, Appraisers and Estate Agents Act 1981 (Act 242). Any registered REA or firm that commits any wrongdoings will be subjected to BOVAEA’s disciplinary action which includes fines, suspension or deregistration.
  • All advertisements in newspapers and property portals posted by a Real Estate Negotiator (REN) must contain the Firm’s E registration number, firm’s telephone number, firm’s name and REN numbers beside his/her mobile number. The public can easily cross-check any REA’s or REN’s identity through the official BOVAEA website.
  • Agents and negotiators are prohibited from placing ads on tree trunks and lamp posts. Illegal brokers who put up ads (without REN numbers) and commit any other offence under Section 30(i) of Act 242 is liable upon conviction to a fine not exceeding RM300,000 or imprisonment for a term not exceeding 3 years or both.

Also, illegal ads verified by BOVAEA will be followed up with a communication to the  Malaysia Communication and Multimedia Commission (MCMC) who will then suspend and bar the mobile number. More information can be found at the MIEA official website.

3. How much do real estate agents make?

Malaysia money ringgit bill in hand
© Ekachai Wongsakul | 123rf

i. As per the Seventh Schedule (Rule 48), the maximum commission fee is 3% for the sale or purchase of land and buildings.

This figure applies to other services rendered by the firm, such as a joint venture, sale of company and property swap. For chattels including plant and machinery, a fee of 10% on the proceeds is chargeable.

However, these subject to a minimum fee of RM 1,000 per property.

Meanwhile, the fee for the provision of sale and marketing services is to be agreed upon between the estate agent and client

ii. For lettings or rental properties, the following maximum amounts are chargeable for tenancies:

  • Up to 3 years: 1.25 months gross rental
  • >3 years, up to 4 years: 1.5 months gross rental
  • >4 years, up to 5 years & >5 years: 1.75 months gross rental
  • >5 years (with an option of renewal): 1.75 months gross rental plus 0.25 months rental for every additional year

*Subject to a minimum fee of 1-month rental & this scale does not apply to serviced offices or apartments or any other premises of a similar nature. For tenancies less than a year, the fee can be calculated using a pro-rata basis.

Well, there you have it – all the best in kickstarting your real estate agency career!

Read this article next: How to become a Property Agent or Real Estate Agent in Malaysia: A step-by-step guide

Disclaimer: The information is provided for general information only. Malaysia Sdn Bhd makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.

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