Auction & Foreclosed Property
Do you need an agent to bid, and who pays them?
Public foreclosure auctions under the National Land Code (Act 828, Revised 2020) are open for direct public bidding. Understand the role of auction agents, what their professional fees cover, and how commission arrangements operate.
Quick summary
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Best for
Risk level
Buyer action
| Best for | Buyers considering a foreclosed or auctioned property |
|---|---|
| Risk level | High |
| Buyer action | Send Lewis the property, how the names are held on the title and what you are trying to decide, and he will tell you what to check first. |
What you are actually buying
The question here is the auction itself is free to attend, so it is worth knowing exactly what a fee is buying Every auction lot is governed by its own Conditions of Sale. Two lots in the same building, sold on the same day, can carry completely different obligations.
Public statutory access: direct bidding under s.256(3) and s.263(1)
Foreclosure auctions under the National Land Code (Act 828, Revised 2020) are statutory public auctions designed for direct public engagement. Whether the auction is ordered by the Court under s.256(3) or by the Land Administrator under s.263(1), or hosted on judicial e-lelong portals, the process is open to any member of the public. The only mandatory statutory prerequisite is proving possession of a bank draft equal to ten per centum (10%) of the reserve price under s.257(1)(e) or s.263(2)(e). The law contains zero requirement for a prospective bidder to be represented by a real estate agent, auction broker, or intermediary.
What genuine professional agent due diligence delivers
Engaging an experienced property agent can provide practical benefits for busy purchasers who cannot dedicate working hours to due diligence. A competent agent visits the District Land Office to conduct an official land search, travels to the property to perform an external site inspection to confirm structural condition and occupancy, and approaches the building management body to verify outstanding maintenance charges. Furthermore, they obtain the official Proclamation of Sale and Conditions of Sale to review arrears clauses and ensure the bidding bank draft is correctly prepared and submitted on time.
Listing aggregators vs genuine due diligence intermediaries
Prospective buyers must distinguish between professional due diligence practitioners and passive listing aggregators. Many auction brokers merely scrape public listings from auctioneer websites and circulate them on social media channels, adding markups or demanding representation agreements without conducting any investigation. If an agent cannot provide an updated land search, an exterior photographic report, and an official written arrears statement from the Joint Management Body or local authority, they are offering zero value beyond information freely available on public auction portals.
Contractual fee structures: absence of statutory auction commission scales
Unlike standard sub-sale agency arrangements where statutory fee scales govern transaction commissions, the National Land Code contains no prescribed fee scales or statutory commission rates for auction buyer representation. Remuneration is strictly a private contractual agreement between the buyer and the agent. Some agents operate on a fixed due diligence service retainer, while others charge a success-based fee payable only if the bidder wins the auction. Bidders must negotiate these terms in advance and insist on a formal written engagement agreement detailing the scope of work and payment conditions.
Conflict of interest safeguards and strict fund segregation
When working with an intermediary, maintaining strict control over your funds is essential. Never transfer the 10% bidding deposit into an agent's personal or company account. Under s.257(1)(e) and s.263(2)(e), the 10% bank draft must be purchased directly by the bidder from a commercial bank and drawn strictly in favor of the designated stakeholder named in the Proclamation of Sale. Additionally, confirm in writing that the agent does not represent competing bidders on the same lot, eliminating conflicts of interest during competitive bidding rounds.
Check this against your own case
Before you register to bid, read the Proclamation of Sale and the Conditions of Sale for that specific lot, end to end, and do a land search. The lot's own conditions govern the deposit, the completion period, and which arrears you inherit. Nothing general — including this post — overrides what that document says about that lot.
Buyer checklist
You do not need to hire a real estate agent to participate in a public foreclosure auction in Malaysia. Court auctions under s.256(3) and Land Administrator auctions under s.263(1) of the National Land Code (Act 828, Revised 2020), as well as online e-lelong portals, allow any individual who meets the mandatory 10% deposit requirement under s.257(1)(e) or s.263(2)(e) to register and bid directly. What an auction agent provides is convenience: conducting land searches, checking physical site occupancy, verifying arrears with management bodies, and assisting with auction registration. Crucially, auction commissions and fees are not fixed by statute; they are private contractual arrangements that must be negotiated and agreed in writing beforehand. Bidders should never assume the bank or auctioneer pays the agent.
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| 1 | Decide whether to bid directly via public auction portals or appoint a specialized intermediary. |
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| 2 | Ensure any engaged agent provides a formal land search, physical site check, and written arrears statement. |
| 3 | Agree on all agency fees, retainers, and success charges in writing before commissioning any work. |
| 4 | Purchase the mandatory 10% bank draft directly under your own name with the payee specified in the proclamation. |
| 5 | Verify that your intermediary does not represent competing bidders on the same auction lot. |
Common questions
Is it compulsory to use a real estate agent to bid at a property auction?
No. Foreclosure auctions under s.256(3) and s.263(1) of the National Land Code (Act 828, Revised 2020) are public proceedings that permit direct registration and bidding.
Does the chargee bank or auctioneer pay the auction agent's commission?
No. Unless explicitly engaged by the bank, auction agents acting for buyers are paid directly by the buyer under a private agreement.
What due diligence should an auction agent perform for their fee?
A proper service includes conducting land title searches, inspecting site occupancy, and obtaining written statements of outstanding arrears.
Should a bidder transfer the 10% deposit money to the agent's account?
Never. The 10% bank draft under s.257(1)(e) or s.263(2)(e) must be purchased directly by the bidder and made payable to the entity named in the Proclamation of Sale.
Lewis Chong
REN 69566 · IQI GlobalProperty advisor helping KL, JB, and Penang buyers make data-backed property decisions.
Related reading
Use one buyer framework across different news.
Reading a Proclamation of Sale line by line
The Proclamation of Sale is the legal contract governing a foreclosure auction under the National Land Code (Act 828, Revised 2020). Reading its title details, reserve price, deposit terms, balance deadline, and encumbrances protects bidders before the hammer falls.
Lewis Conclusion
Never bid on an auction property based on marketing flyers, online portals, or an agent's verbal summary. Request the official Proclamation of Sale and Conditions of Sale directly from the auctioneer or chargee bank's solicitors. Have your conveyancing lawyer review the title particulars, restrictions in interest under s.120, and outgoing apportionment clauses before you prepare your bank draft.
Auction due diligence: what to finish before you register to bid
Foreclosure auctions operate on an as-is-where-is basis under the National Land Code (Act 828, Revised 2020). Complete this strict sequence of land searches, physical site inspections, arrears enquiries, and financing checks before submitting your bank draft.
Lewis Conclusion
Do not cut corners on pre-bid due diligence to save search fees or an afternoon of travel. If you cannot complete every step in the sequence — title search, site visit, arrears confirmation, and loan readiness check — walk away from that auction. An auction property bought blind is not a discount; it is an unhedged liability.
The 10% bank draft: what it is for, and when you get it back
The 10% bank draft serves two distinct statutory functions under the National Land Code (Act 828, Revised 2020): pre-bid proof of capacity and post-bid earnest deposit. Learn how it is calculated, when unsuccessful bidders are refunded, and how s.267A applies upon default.
Lewis Conclusion
Treat your 10% bank draft as money already committed the second the hammer falls. Never bid hoping you can find financing later; if your loan falls through, s.267A ensures you will not get that deposit back. Before buying the draft, ensure the payee name strictly matches the Proclamation of Sale, and ensure you have a watertight plan to pay the balance within 120 days.
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Decide whether to bid directly via public auction portals or appoint a specialized intermediary.
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Ensure any engaged agent provides a formal land search, physical site check, and written arrears statement.
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Agree on all agency fees, retainers, and success charges in writing before commissioning any work.
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Purchase the mandatory 10% bank draft directly under your own name with the payee specified in the proclamation.