KUALA LUMPUR — To ensure property agents are compensated fairly, real estate agencies in Malaysia should look into using the pay-out scheme of multi-level marketing (MLM) companies, according to the head of the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP).
“Real estate agents earn their incomes from commissions, so if you work hard, you can get more commission. But sometimes the estate agent works hard, yet the company earns more,” said BOVAEP President Nordin Daharom.
This has led to some agents demanding their agencies to provide them with a higher commission rate, he told the attendees of the Malaysian Annual Real Estate Convention (MAREC) held at the Sime Darby Convention Centre in Kuala Lumpur on Friday (2 March).
“How do you solve this problem? So this is the idea for the Malaysian Institute of Estate Agents (MIEA) to think about, whether multi-level marketing can be introduced in the real estate industry,” he explained, adding that this is only his personal opinion.
Nordin pointed out that property agencies and MLM firms share some similarities. Aside from being both commission-based businesses, there are also downlines (agents) and uplines (agencies).
Thus, this pay-out scheme can be implemented in the property industry to improve the profession, he said.
For instance, the commission structure of US real estate company Keller Williams that is similar to that of MLM firms can be adopted by local real estate agencies in Malaysia.
Under this system, an agent will be entitled to the full commission amount from the transaction he or she brokered after contributing to a certain amounts of sales to the agency.
However, this is only feasible for agencies with an effective marketing manager and responsible head, who oversees the agency’s activities, added Nordin.