Every expat that comes to Indonesia has a different story to tell about how they found their home. In the worst cases, the story details a long exhaustive quest for just the right house for the family. In many stories, unqualified agents take newly arrived expats around to houses that are outside their budget, in unacceptable condition, don’t match the needs of the family or are located far from the neighborhood that the family wants to live in. The complaints made by unhappy newcomers after days spent stuck in traffic looking at unsuitable houses make up the tales of expat nightmares!
These nightmares can be avoided by using a reputable agent/broker to help you with your search. Your choice of housing agents and brokers includes independent brokers, franchised real estate brokers affiliated with multinational real estate firms and corporate housing services/relocation services.
As in so many business dealings with expats in Indonesia, there are a multitude of brokers that would like to help newly arrived expats find a house. Independent brokers are self-employed agents who use word-of-mouth and personal connections to try to locate potential residences for expats. They may or may not actually be the sole representative of the landlord of individual properties, but since their commissions are based on the amount of the rent, they have a vested interest in getting you to pay the highest amount possible to lease the house.
Many newly arrived expats are referred to such brokers by someone in their sponsoring company – from the HR or Formalities departments in a major multinational or by other staff in key positions. These independent brokers sometimes offer the person ‘inside’ the company a percentage of their fee for a successful signing. While this type of arrangement does benefit someone in your sponsoring company and/or their relatives or friends, there is no guarantee that this person has the personal or business resources or the skills to help you find the most suitable house for your family.
Most independent brokers find houses through word of mouth and networking with other brokers. While many brokers specialize in a particular area, they will be willing to help you find a house in other areas as well. For the areas that they do not have many houses/contacts in, they will then contact other brokers that they know have properties in that area and offer to co-broke, they provide the client and the other broker provides the property.
Utilizing this system may work, though the search is much lengthier. You will also undoubtedly see a lot of unsuitable homes in the process, as your broker will not be personally familiar with most of the houses they show to you. The negotiation process will also involve more than one broker, both agents will want a piece of the commission. Now you have 2 agents working towards a higher commission! The biggest challenge to you is that the broker you are dealing with may not be the person who is talking to the potential landlord, which can cause problems in the future as well.
Independent brokers/agents should NOT be charging you anything for their services since they receive their commission from the owner. While the agent is providing assistance to you, remember that it is the owner that is paying the agent’s commission. Don’t assume that they are in fact acting in your best interest at the bargaining table as they are paid by the owner. There may be no advantage to them in trying to find the best deal possible for you as their commission will be bigger if you have to pay more for the house. Current commissions run from 2.5% to 5%, so you can see that when large rents are at stake, the commission is significant.
For more information on various agents, check out community’s posts on the Living in Indonesia Expat Forum.
Franchise Real Estate Brokers
In recent years, rising consciousness of the disadvantages of using independent brokers, and a demand from expats and Indonesians alike for more professional real estate services, has led to an increase in professional real estate brokers in Jakarta. Multinational real estate brokerage services have franchised in the local market and trained real estate professionals in international practices. There is no central computerized Multiple Listing Service in Indonesia. Some individual agencies compile and maintain their own database of listed houses.
A disadvantage to using a franchised broker is that they will only show you houses that they have listings for. Be aware that these franchises are purchased by individuals and while training from the franchise company does occur, a varying level of professionalism is seen from broker to broker.