THE ULTIMATE GUIDE TO BUYING PROPERTY IN MALAYSIA
Buying property in Malaysia may not be as complicated as one would expect. In fact, you do not EVEN have to spare any of your time opening the National Land Code or Contract Act or to know the details of any of the Acts by heart. That would be the duty of your conveyancing lawyer to explain the details and the procedures of buying a property.
Nonetheless, here are the key points which you must know when buying property in Malaysia:-
What are you buying?
- Choosing and knowing the ideal property for sale in Malaysia
- You should have an idea of what your ideal property for sale in Malaysia is going to be;
- Narrow down your choices by comparing the ideal size, type, location and price, these steps would simplify the process of choosing your ideal property.
- Facilities and Amenities
- If you are considering a high-rise unit, do not forget to check the conditions of the facilities and the amenities provided.
As healthy it is to climb a 10 storey-building just to be in the comfort of your bed, trust me, you will eventually get tired of doing that!
Who you are buying from?
There are several options available when buying property in Malaysia. One of them is, purchasing it directly from a developer, by way of an auction or a sub-sale.
- Advertisement: Property in Malaysia that is auctioned is usually advertised in the newspaper, in the advertisements section by an auctioneer.
- Bear in mind that for an auction, the Bank would usually impose a strict Completion Date.
- You also need to remember that you will not be allowed to inspect the property prior to the auction.
- Hence, the risks of buying such property in Malaysia will be a lot higher than buying a property through a sub-sale.
- When buying property from a developer, make sure that the developer has a good track record and is a registered developer in Malaysia.
- You may check the developer’s status and track record with the Ministry of Urban Wellbeing, Housing and Local Government.
- Agent / Vendor – If you choose to buy a property by way of a sub-sale, you may do so by engaging a property agent to find the right property for you or you may reach out to a specific vendor directly.
- Background Search – It is advisable for you to conduct a background search on the agent and his agency to ensure that they are a qualified and reliable property agent.
- Registered Owner – If you deal directly with a vendor, you need to ensure that the vendor is the registered/beneficial owner of that property as only the registered owner of a property may dispose his/her property in Malaysia.
Financing the purchase of your desired property.
- Cash Buyer
- If you are a cash buyer, all you need to do is to make sure the money is ready and available when payment is required.
- Non-Cash Buyer
- However, if you are not a cash buyer, you may make an application with any financial institution or you may also use your EPF Account 2.
- It is advisable for you to shop around for different financial institution as each financial institution offers different financing packages.
- It is also important to get a loan estimation from multiple lenders before making the right decision in choosing your preferred financial institution and thereafter making a purchase of your desired property.
- Before buying property in Malaysia, you may also obtain a pre-approval for a housing loan.
How to deal with a conveyancing lawyer.
- Booking Form or Offer to Purchase – Before signing a Sale and Purchase Agreement (“SPA“), it is crucial to execute a booking form or an offer to purchase. This is to ensure that your desired property is well secured as well as to prevent the vendor from engaging into another transaction with another party before the SPA is prepared.
- Time for Loan Approval – It is advisable for you to ensure that a clause is included, to highlight the period of time you are given to obtain a loan approval prior to the execution of the SPA.
- Deposit – It is a common practice for the purchaser to pay 10% of the purchase price during the execution of the SPA.
- TIP : Try and ask for a term whereby the 10% deposit is refunded if the financing is not approved.
- Conveyancing Lawyer Fees – When appointing a lawyer to do conveyance work, apart from the deposit, the purchaser will also need to pay the relevant cost of fees and disbursement for the drafting, reviewing, commenting and preparing of the SPA.
- Basis of the Conveyancing Lawyer Fees – The fee will be calculated based on the market value of the property in Malaysia as stipulated under the Solicitors Remuneration (Amendment) Order 2016 and the stamp duty is governed by Stamp Duty Act.
- Contingency – It is safe to say that you should at least set aside 3% from the purchase price as part of your contingency plan to cover the relevant legal fees and stamp duty.
- Fret not ! : Your conveyancing lawyer is well-equipped to provide adequate assistance for you to have a hand on your first property.