Using Activity Theory to Review Internet Technology Engagement by Real Estate Negotiator in Malaysia towards Agency Best Practice

Journal of Environmental Treatment Techniques

2021, Volume 9, Issue 1, Pages: 72-76

J. Environ. Treat. Tech.

ISSN: 2309-1185

Journal web link: http://www.jett.dormaj.com

https://doi.org/10.47277/JETT/9(1)76

Using Activity Theory to Review Internet Technology

Engagement by Real Estate Negotiator in Malaysia

towards Agency Best Practice

Azir Rezha bin Norizan *, Ahmad Naim Che Pee

Malaysian Institute of Information Technology, Universiti Kuala Lumpur, Kuala Lumpur, Malaysia

Faculty of Information and Communication Technology, Universiti Teknikal Malaysia Melaka, Melaka, Malaysia

Received: 15/07/2020

Accepted: 13/09/2020

Published: 10/10/2020

Abstract

Real estate is a revelatory industry for the study of ICT uses because it is information-intensive and realtors are information intermediaries

between buyers and sellers. As agents, buyers and sellers increase their uses of ICT, they also change how they approach their daily work.

Information intensive industries, by their nature, show the greatest impacts due to ICTs that enable information sharing and the bypassing of

traditional information intermediaries. However, while the effects and uses of ICT are often associated with organizations (and industries),

their use occurs at the individual level. In other words, it is changes to individual work related to the use of ICTs that reshape both organization

and industry structures, and vice-versa. In this study, we use activity theory to provide an analytic perspective within the setting in Malaysia.

Data reveal historical structures of this industry guiding the day-to-day work of agents, buyers, sellers and the role of agency. Many of these

structures are embodied in a set of explicit contracts that reify existing structures and legitimize realtors’ actions. While looking from the

agencies practices, we explain possible improvement in the real estate industry following the advancement of internet & mobile technology,

viewing the possibilities towards the use of IOT in real estate industry.

Keywords: ICT, Real Estate, IOT, agency, digital media

driverless cars and delivery vehicles, plus bots offering a range of

Introduction

services, are setting in motion many thought processes

imagineering the likely future of logistics and retail real estate [1].

Real estate is the largest asset type and one of the last to adopt

technological change and the innovation that tech can bring [13].

The internet and mobile telephone have enabled vast

improvement in technology platforms applied to nearly all areas

of our lives. This has happened through the facilitation of three

different activities which are information provision; transactions;

and management and control. Wikipedia and on-line newspapers

are examples of on-line information engines. Initially, the

internet, mobile telephony, social networking and e-mail were all

about information, hence the previously ubiquitous use of the

term ‘infotech’[7]. Information is the key input into the due

diligence phase of a transaction. Shopping on-line was therefore

the natural next phase of technology development. Paypal,

Amazon and on-line banking are examples of internet and mobile

telephony being used as a medium for the exchange of money,

goods and services. PCs, tablets and mobile phones are potential

dashboards for controlling electronic functions [10]. The Internet

of Things (IoT) allows objects to be measured (information

provision) but also sensed and/or controlled remotely across the

existing network infrastructure, creating opportunities to adjust or

turn systems on or off remotely [6]. As an example, Google’s

This should present

a massive area of opportunity for

entrepreneurs. The opportunity is driven not only by the size of

the industry and its lack of tech adoption, but also by industry

practices plagued by inefficient processes and unnecessary

transactional costs defended by self-interested professionals and

institutions.

The real estate business helps fulfil one of our most basic

needs: shelter. For many people, this shelter is a house, but real

estate is more than just shelter and houses. It includes apartments,

condominiums, cooperatives, farms, retail stores, office

buildings, shopping centres, warehouses, industrial plants,

medical centres, and many other types of property. Hundreds of

thousands of licensed professionals sell, lease, manage, appraise,

or otherwise work full time in the real estate industry [10]. The

industry also provides employment for many part-time and

support personnel.

014 acquisition of Nest to create a Google IoT division was seen

at the time as a significant moment. Also, the remote control of

Real estate is not known as an industry which readily embraces

change [5]. The nature of the asset class, which comprises large

Corresponding author: Azir Rezha bin Norizan, Malaysian Institute of Information Technology, Universiti Kuala Lumpur, Kuala Lumpur,

Malaysia. E-mail: azir@unikl.edu.my

Journal of Environmental Treatment Techniques

2021, Volume 9, Issue 1, Pages: 72-76

heterogeneous assets traded in a largely private market, is perhaps

a good reason for this. Homes may be too important a part of a

private portfolio to take any risks with the process whereby it is

traded, held or valued. It may also be the case that there is an

agency problem: the professional advisers that dominate the

transaction process clearly have an interest in protecting their

income sources, so chartered surveyors, brokers and lawyers

might all be expected to resist tech-driven innovations designed

to ‘disrupt’ their work. Nevertheless, in current times we are

witnessing a battle for market share between traditional advisers

and a discernible second wave of technology-based innovation

huge number of people regardless of their gender, age or

experience level [10]. We choose to locate our study in Selangor

State area as more than 500 real estate agencies located within.

We use close observation and unstructured interviews as the

methods to collect information of 267 real estate negotiator from

14 different agencies. The respondents were from three major

Malaysian races, 72% malay, 16% chinese and 12% indian. In

terms of age, range of respondents were aged between 30-40

years. These respondents were selected while taking into account

the level of literacy towards internet and smart phone technology.

The study looked at the real estate business activities, therefore

the respondents were among real estate negotiator (REN) because

REN play a very significant role in the activity. The selected REN

also has more than 3 years of work experience and can be

considered skilled in real estate activities.

[2].

Previous study saw that the growth of ICT in one industry

allows for removal of information intermediaries which including

the real estate agents [11]. Analysis of the data from a

structurational perspective suggests that real estate agents have

lost some of the domination originally created by their control

over the information resources. But the changes that happen in

industry structure is much more complex than simple

disintermediation. The real estate agent’s actions are helping them

to restructure their roles in the industry which we going to discuss

in the next section.

Activities of Real Estate Negotiator

Due to fast technological development, studies of

digitalisation and platforms have explored more in the past

decade, but none has gone detail into micro level of activities in

the real estate industry. We use activity theory (AT) framework

to help in looking further detail action and interception that occur

in the stakeholder’s activities [3].

Real Estate Industry in Malaysia

Activity theory is an analytical framework that has the ability

to examine phenomena in their native context through multiple

perspectives and can be used for analysis of qualitative data. AT

aims to connect the individuals and their surrounding social

structures by pursuing a monist approach in which both are

studied at the same time by focusing on the generated activity [8].

The framework has the ability to look further than design and

social innovation as an isolated method, process or idea by also

providing insight into the ecosystem in which an initiative takes

place and to which it is inextricably linked [3][12].

The relationship between subject, tools and object can be

considered as an activity conducted by a subject to achieve a

certain outcome [11]. Collective activities are driven by

communal motives, which are formed when collective needs

might potentially be fulfilled by certain objects. Linking the

subject-tools-object relationship to the wider social context are

rules, which can be implicit or explicit, the broader community,

consisting of other activity systems and, if applicable, shared and

coordinated by a division of labour [11]. Activity system is the

basic unit of analysis in AT which are the relationship between

these different elements.

Since Malaysia gained independence in 1957, the real estate

industry has grown rapidly. Evidence shows that real estate is one

of the main drivers of Malaysian economic growth and the engine

of social stability thus an important part of economic

development. The growth of the real estate industry is closely

related to developments in other industries as well such as in the

corporate and commercial sector, hospitality and tourism sector,

retail sector, information technology (IT) sector, infrastructure,

service sector and many other fields [2]. However, there are some

challenges that exist today that are a major contributor to the

imbalance between socio-economic achievement and real estate

deals. According to a study conducted from 2002 to 2016, the

level of inability to buy a home has increased drastically. The

level of property ownership has dropped from 2012 to 2014. The

price of home offered to the market is increasing and at the same

time affecting the level of property ownership among the general

public [9].

On the economic basis, when demand equals supply, then

market equilibrium will occur. However, this does not seem to

exist in the real estate market - especially in urban areas. In major

cities in Malaysia, housing supply is more geared towards high-

cost housing such as bungalows, apartment and residential

services. For example, in Pulau Pinang alone, all properties

launched in 2016 are worth more than RM250,000 and most are

worth RM500,000 to RM1,000,000. Home transactions under

RM500,000 also dropped to 83% in the third quarter of 2014

compared to 98% in 2002 [9].

The lack of data and statistics has created a huge gap in the

analysis of demand and housing. This needs to be addressed so

that comprehensive and holistic analysis can be carried out to

enable more effective monitoring and planning into these

challenges [10]. One of the key issues regarding data and statistics

at the state and central levels is the incomplete and up to date

database. In addition, most data do not meet the spatial scale and

data is only written and not digital.

Figure.1: Activity System (Engeström, 1999)

The real estate business has now become one of the highest

paying salary in Malaysia. This opportunity has been grab by

As the study looked at qualitative information, in-depth

Journal of Environmental Treatment Techniques

2021, Volume 9, Issue 1, Pages: 72-76

observation and open-ended interviews were conducted on 267

real estate agents and involved 14 real estate agencies around the

Klang Valley, Malaysia. By putting the Real Estate Negotiator

the agency, and already have a lot of property listings and has a

high frequency of sales cases. The basic activities REN has to do

is promoting their identity as a real estate negotiator; and

compiling a list of properties for sale as well as obtaining the

rights as official dealers. Only then will REN act to find potential

buyers as described.

(

REN) as the subject; and properties for sale as objects to

activities, Observation of activity was done by looking at the

elements or entities that surround the subject and object to be

matched with other entities such as those on figure 1.

A real estate negotiator needs to be registered with The Board

of Valuers, Appraisers and Estate Agents Malaysia (BOVAEA)

through any Real Estate Agency. The existence of BOVAEA

helps in controlling the operation property businesses by setting a

rules for approving a sale. Real estate agency is a company

operated by Real Estate Agent (REA) and depending on the size

of the agency, an agency can have up to 500 registered RENs.

REN works under REA supervision and paid according to the

case of the sale of the property and the percentage of commission

earned varies according to the agreement made by the agency.

Property selling activity begins with the interaction between

REN and the owner who looking to sell the property. Owner must

enter into an agreement to allow the RENto act as a representative

to sell his property. There are two types of agreement; exclusive

appointment where only the REN appointed is entitled to deal

with the sale of the property; and open appointment in which REN

shares the rights with other RENs appointed to carry out the sale.

Before making an agreement, usually the REN will conduct a

review of the quality and condition of the home to suggest repairs

to be made by the owner in order to set a reasonable price.

After the agreement, REN will start their advertising work to

reach potential buyers with the various methods they know. REN

also need to get the average value of the property to be advertised

from the valuer. There are some agencies that have their own

valuer to facilitate REN's work, but for agencies that don't provide

valuers, REN needs to get valuer services from other companies.

This is because the market value of the advertised property must

be accurate, otherwise REN and agencies may be subject to legal

action by BOVAEA. After getting serious buyer, REN will

conduct a buy-in review of the buyer's financial eligibility,

whether he is eligible to purchase the property. If eligible, REN

will bring buyers to view properties and continue further

discussions until the buyer agrees to purchase and sign the

agreement document.

Next, the REN will need to bring the property sale agreement

from both the owner and buyer to the agency's verification.

Agency approval is required because the agency is the real

intermediary between the owner and buyer in the property sales

activity, while REN represents the agency. The next process is

assisting the buyer to apply property’s loan from bank, and at the

same time helping the owner and buyer in dealing with the

appointed lawyer until the buyer successfully obtain the bank

loan.

There are also situations where RENs need to cooperate with

other RENs from the same or different agencies, to get a case of

property sales. In such cases, the value of the commission will be

divided according to the previously agreed agreement prior to

cooperation. Overall activity can be illustrated by Figure 2. Based

on figure 2, we can see more clearly the relationship between the

entities involved in the activity. However, selling a property is

just one of REN's activities in the real estate field of work. A

newly enrolled REN will usually be paired with a senior REN to

learn the routine that needs to be done. Senior REN in this study

is a person who has completed all training sessions provided by

Figure 2: Activity System of a REN to sale a property

The real estate industry can also be seen as a multilevel concept

business starting with REA as a top leader. REA as an agency will

recruit REN to assist in real estate negotiation work and deal

directly with both the seller and the buyer. REN will receive a

percentage of the commission based on the agreement with the

agency. Senior RENs will usually look for new REN prospects as

a down-line and can earn commissions from their down-lines,

indirectly become one of REN activities.

4 Internet Engagement in Ren Activity

By observing the activities in the real estate industries

surrounding REN and the agencies, the use of technology

especially smartphones and internet seems compulsory these

days. Looking for property to buy or to sale has becoming lots

easier as how buying and selling things online has become

common. There are just a lot of platforms ready to be use for the

property owner to market their property, and the REN will get

their attention from those platforms to get appointed.

Open interviews that has been done among 267 REN allow us

to analyse some interesting data regarding their activities. The

activity of a REN usually involves marketing work, whether to

market their identities and professions as real estate consultants,

or market the property for which they are an authorized seller. As

many as 92% of respondents who are all senior REN, states have

established their own platforms whether professional website, or

a large network of social media followers. The rest say they have

no skills in developing their own website and rely solely on social

media in search of property or potential buyer. The majority agree

that the existence of their own official website helps to enhance

the professional perception of their careers indirectly increasing

the success rate of being appointed as the official seller for a

property.

Variety of smartphones apps or websites available for the

owner to do marketing on their own. Even social media networks

such as Facebook and instagram could do such work as almost

everyone has their own accounts. Selling and buying a properties

are not the same as selling and buying a car because of the detail

procedures, involving huge amount of money and taking lots of

time. Common people usually aren’t ready and do not understand

the work need to be done before the property could change the

owner, and most people don’t want to waste their precious time