Property Buyer Agent in Lombok and Bali: How to Avoid Scams

The property market in Indonesia presents unique risks for foreign investors, primarily due to the inherent conflict of interest where traditional real estate agents and notaries do not exclusively represent the buyer.

Unlike in countries like France, only one notary signs the lease or sales and purchase agreement in Indonesia, and that notary serves merely as a witness, not as a representative defending either party.

This article explains the crucial role of an independent Property Buyer Agent in Lombok and Bali. We argue that this agent, a lawyer or legal advisor, is essential for mitigating legal and financial risk.

We clarify how a buyer’s agent works solely to defend your interests, providing crucial due diligence (checking for scams, ensuring proper Building Permits (PBG), and verifying zoning) that traditional brokers often omit.

Furthermore, an independent agent offers expert tax structuring advice and ROI verification, countering unqualified advice that can result in higher taxes and lower returns.

Given the market’s increasing scrutiny from tax authorities (NPWPD checks), selecting a buyer’s agent is no longer a luxury but a necessity for securing a compliant, protected, and profitable investment.

This is where ILA Global Consulting excels. For years, we’ve helped hundreds of international clients, including those investing in property in Bali and Lombok, precisely navigate Indonesia’s legal, taxation, and investment complexities.

Our team’s blend of deep local knowledge and international best practices ensures compliant, strategic solutions, making us a trusted advisor for anyone building a sustainable presence in Indonesia.

Can You Rely on a Real Estate Agent in Bali and Lombok?

The success of the transaction pays brokers or real estate agencies. It forces the real estate agent to have a beautiful product, but the real estate agent is paid by commission, as the notary is.

It means that, as a notary, they act as a neutral between the seller and the buyer and do not represent the buyer.

Most of the time, they are more about the seller attracting developers and keeping the most exceptional product in their book. There is nothing wrong with this, and it is the real estate agency’s job.

However, real estate agents have failed to do some controls on the properties. Unfortunately, over the last few decades, real estate agents have agreed to list properties without a building permit or proper license.

This is also due to the government, which did not control property, and to the fact that agents have accepted, since the beginning, to list properties.

Regarding the best way to structure the investment, some brokers have provided advice that does not affect how the Return on Investment is returned to investors.

Many brokers, to close the deal quickly, recommended that a property be purchased in a personal name, without disclosing that the tax would be much higher.

Luckily, there are many great agencies and good brokers in Bali, Lombok, and Sumba who understand that professionalism is essential.

At ILA, for example, we refuse to provide real estate advice on the ROI as it is not our job. Some real estate agents also understand that legal advice should be provided by an independent professional, such as a buyer’s agent or a lawyer.

Key Terms: Broker Conflict and Property Risks in Indonesia

Start Your Investment Journey in Indonesia the Right Way

With so many diverse investment opportunities in Indonesia, you need to make sure you’ve got the proper setup to do business here.

Get help from our team of experts to register your company, navigate the real estate market, and secure your visa and stay permit.

Schedule a free call with us today to plan your next steps with ILA.

What Is a Property Buyer Agent?

A property buyer agent is a lawyer, legal advisor, or property advisor who will look after investment opportunities in Indonesia and defend your interests.

The buyer agent will work on behalf of the investor and buyer and will seek the best possible contract terms, negotiating the terms and conditions.

Buyer’s agents are usually paid on a fixed price with a small commission as a success fee. The role of the buyer’s agent in Bali or Lombok to purchase a villa, apartment, or property can be seen as:

1. Independent Representation and Protection of Your Interests

Traditional real estate agents in Indonesia are typically compensated by commission on successful sales, leading to an inherent bias toward sellers or developers. A buyer’s agent, usually paid a fixed fee with a small success commission, works exclusively on your behalf. Their primary objective is to defend your interests, negotiate the best terms, and work to obtain the most favorable contract conditions for you.

2. Mitigation of Legal and Financial Risk (Due Diligence)

The buyer’s agent provides crucial due diligence that traditional real estate agencies often fail to perform. They will verify that the property has all necessary legal documentation, including proper building permits and licenses, which is vital in a region where control over such documents has been historically lax.

3. Expert Investment Structuring and Tax Advice

Some brokers have previously offered unqualified financial advice, such as recommending purchasing under a personal name without disclosing the resulting higher tax implications, which negatively affects the Return on Investment (ROI). A buyer’s agent, who is a lawyer or legal advisor, can assist in defining the best investment strategy and ensure all advice regarding ROI and tax structure is sound and independent.

4. Comprehensive Service and Expertise

A property buyer agent is a specialist who handles the full spectrum of the acquisition process, which includes:

• Price negotiation.
• Selection of the most suitable property for your goals.
• Independent verification of the anticipated Return on Investment (ROI).
• Thorough due diligence on the property’s legal and physical status.
• Assistance in defining the optimal investment structure.
• Representing the buyer during the official signing of the lease or sales and purchase agreement.

Key Terms Defining the Role of a Property Buyer Agent

Why Choose a Buyer Agent When Purchasing a Villa in Bali or Lombok?

As defined above, the property market in Lombok or Bali still has some scams, and some agents are still lying by omission:

• Not informing about the real ROI
• Not selecting properties having the legal documents (PBG and SLF)
• Properties located in the Green zone or protected area
• Properties with difficulties in accessing the fresh water
• Issues with the access road
• Conflict of interest or partnership with the developer

The points above are some of the issues we face as legal advisors when representing our clients in property purchases. Unfortunately, the regulation sometimes has time to be applied.

For example, property managers are now requesting NPWPD (local tax number) for their clients. The tax office is checking more and more, and people who have purchased a property as individuals are currently having some issues.

In contrast, the property agent told them it was possible to buy and rent legally as an individual rather than under a PT PMA.

Bali and Lombok markets are becoming increasingly professional. Still, it is challenging to navigate them amid a growing number of developers and agents, as they are becoming stricter, and political forces are trying to purge them of bad actors.

At ILA Global Consulting, we recommend selecting an independent lawyer, legal advisor, or buyers’ agent to represent you and protect your investment.

Key Terms for Property Risks and Compliance in Bali/Lombok