- Automation through technology is no longer optional, but mandatory for sustainability before a company gains traction by increasing its market share
- There needs to be a mindset shift from just training agents to being a salesperson trying to close deals to being a holistic entrepreneur
- The goal of a responsible business is to truly serve agents and think about how they can help them in the long run.
The perks of being a real estate agent – especially being in control of your own work time and the ability to earn unlimited income – have attracted many to try out the field. However, the payoff is certainly not won without pain, and without a strong support system, many will eventually give up.
Added to this are ongoing technological disruptions to the traditional business model and macroeconomic headwinds. So how can agencies retain their talent, develop their team members, and be a sustainable agency that will go far?
Heads of six leading real estate agencies namely Jonathan Lee, Deputy Regional Manager of KW Malaysia, Eric Lim, Managing Director of Hartamas Real Estate Sdn Bhd, Aldrin Tan, CEO of ESP Global Services Sdn Bhd, Marcus Teng, CEO of Propnex Malaysia, Andrew, CEO of MLP Property Consultancy Sdn Bhd Tan and CiD Realtors Sdn Bhd, Founding Director, Low Tung, share with EdgeProp.my how businesses can stay relevant over the long term without resorting to market-cutting tactics that undermine the industry as a whole.
What is a good business?
CiD’s Low emphasizes that a good real estate agent company is not only one that guides and trains its agents, but also provides them with a support system and network.
“Always look for a company that truly cares about your personal growth and your career. Agents are not just ’employees’ in the company, they are the most valuable part of the company and as a company. responsible, our role is to help them grow and develop their potential.
“When you share your knowledge with others, everyone wins because we all operate as one team. Don’t look for a company that just offers a high payout percentage. Instead, look for a company that teaches and helps agents to seek sales. It’s a much more sustainable way to grow in the long run,” says Low, adding that CiD’s seniors hold regular sharing sessions with its agents.
Meanwhile, Propnex’s Teng stresses the importance of not only imparting ways to succeed at work, but also instilling an entrepreneurial spirit that will benefit agents for life.
“Character building and personal development are the foundations of long-term success. First, we must instill values such as discipline and the importance of having courage and tenacity in the industry so that whatever challenges come their way, they are able to face them head on. . Yes, technical skills are important, but remember that’s not the only thing you need to build a successful team,” says Teng.
KW’s Lee also adds that while trainings are beneficial for real estate agents to continually improve, trainings should not be conducted just for fun.
“At KW, our end goal is to really serve agents and think about how we can help them in the long term. We need to make sure agents stay relevant, especially in this fast-paced climate.
“There is no one-size-fits-all training for every agent – there are some who need to learn the basics, while there are also those who are at a more advanced stage, where we run trainings on how to hire people to manage their own teams.
“We have a certified trainer from Canada who leads the training at the regional level and we also have training coordinators in our centers who lead six to eight training modules per year,” says Lee, adding that there must be a shift in mindset from a mere salesperson to an agent who thinks about long-term goals and constant self-improvement.
“At ESP Global, our main priority is to continuously create added value for our sales agents, by developing business opportunities and equipping our sales agents with the latest prop technologies that enhance their competitiveness and support their career growth as sales agents. ‘salesman about being a leader and eventually a business owner,’ says Aldrin.
“You need to start thinking about how you can add value to agents and help them stay relevant as they move forward. Today, it is the real estate agency that is at the service of the agents and not the other way around. It’s about what the company can do for agents, not the other way around,” Lee points out.
Teng from Propnex also shares that a company should always have a clear organizational chart so that each member is clear on their specific role to holistically support the team.
“At Propnex Malaysia, we have a proper structure of who does what and their respective roles are clearly laid out so that there is no miscommunication. When proper direction and roadmap is established by the company , it’s easier to align goals,” says Teng.
Play by the rules
MLP’s Andrew notes that talent acquisition and retention continues to be challenging for real estate agencies. There is strong competition among agencies to attract talent by offering various compensation packages and supporting infrastructure. At the same time, high turnover is expected as few of them are able to compete in a fiercely competitive environment.
“This is a business with a low barrier to entry, and the business gains for a business owner are in tandem with the size and volume of the business. Sales agent retention should be kept at a level that allows for growth,” says Aldrin.
Hartamas’ Lim points out that there has been widespread poaching of negotiators by some real estate agencies offering ridiculous commission schemes, which do not comply with regulations.
Currently, the practices of real estate agents in Malaysia are governed by the Appraisers, Appraisers, Real Estate Agents and Property Managers Act 1981 (Act 242), which states that real estate agents must be registered and real estate negotiators must be certified by the Board of Valuers, Appraisers, Estate Agents and Property Managers Malaysia (BOVAEAP).
“We are required to meet certain conditions, such as the number of Real Estate Negotiators (RENs) we can hire under each registered real estate agent, and the commission percentage at the REN,” says Lim, who was also the chairman of the Malaysian Institute. real estate agents from 2017 to 2019.
However, the lack of enforcement has allowed non-compliant agencies to spoil the market, hurting the potential of agencies that follow the rules, Lim laments.
“The current limit is 50 REN for a registered real estate agent, but some unscrupulous companies hire hundreds of RENs with only a few registered real estate agents.
“On the commission, it is delicate. If we follow the rules, we can only pay up to 40%. BOVAEAP has changed the rules to accommodate higher commissions, but it is still awaiting approval from the Ministry of Finance.
Lim reminds agents to link to BOVAEAP-registered companies.
In 2020, legislative amendments to Act 242 (Part VIII, Section 30) stated that anyone who impersonates a registered estate agent is considered to be committing an offense and is liable, if convicted, to a fine not exceeding RM300,000 or imprisonment for a term not exceeding three years or both, and an additional penalty of RM1,000 for each day during the term of such offence.
ESP Global’s Aldrin notes that over the past eight years or so the business model for real estate agencies in Malaysia has suffered disruption and it is becoming increasingly difficult for small and medium-sized businesses to stay competitive.
“While there are a few schools of thought about what the future holds and what model will prevail in this decade, a general consensus is that size matters, in terms of agent numbers and revenue. So, my view is that the market is moving towards larger platforms or agencies, and we could see consolidation and mergers of mid-sized companies in the near future,” Aldrin says.
He notes that contrary to popular perception, running an agency is capital-intensive, especially if it wants to expand to a large team to withstand and adapt to rapidly changing market conditions.
For MLP’s Andrew, he observes that the real estate industry, along with many other sectors, is currently being affected by sustained global macroeconomic headwinds.
“High inflation in a rising interest rate environment will continue to pose a challenge to the overall recovery in real estate transactions. Nonetheless, we believe there are pockets of opportunity in certain transactional businesses, such as industrial real estate and competitively priced residential properties.
“In addition, real estate agencies need to be constantly aware of changing digital trends and strategically integrate these elements into the business,” he adds.
Aldrin agrees: “Automation through technology is no longer an option, but it is mandatory for sustainability before we can gain traction by increasing our market share.”