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Most Popular Real Estate Question

21 Apr

Why should I use a Real Estate Agent?

A Real Estate Agent is more than just a “sales person”. They act on your behalf as your agent, providing you with advice and guidance and doing a job – helping you to buy or sell a home. Due to the fast changing market and environmental issue, select your Real Estate Agent wisely based on their experience and track records. There are times when you need the most current information about what has sold or is for sale, and the only way to get that is with an agent/agency that familiar with your property as well as your needs and requirement if your are buying. They can make recommendations on what terms and prices to offer as well as negotiating a deal with your best interest in mind.

How much money can I borrow to buy a house?

To begin, you’ll need to figure out what your gross income is (before taxes) monthly and yearly. There are other thing to consider, such as if you have a large down payment combined with little to no bills(debts), the lender/banker may believe that you could afford a more expensive home.

What is comprehensive homeowners insurance?

Comprehensive is the most expensive type of homeowners insurance; it covers the most potential damages such as fire damage, water damage not caused by flooding(which would fall under your Flood Insurance policy), your personal possessions, personal liability, theft and vandalism. It is usually required that you carry at least a basic hazard insurance policy.

When concerning homeowners insurance, it’s important to do more study about what the insurance is cover and compare each insurance company policy.

What is equity?

Equity is the financial interest or cash value of your home, minus the current loan balance(s). If selling the home, this would also be minus any costs incurred in selling the home.

If you’re buying a home and don’t have very much money for the down payment(deposit), you may want to find out if the seller would be interested in “sweat equity”. This would allow you to perform the labor on any needed repairs and maintenance to the home,(such as outside repaires, painting or electrical work) in exchange for credit towards closing costs.

How big is an acre?

An acre is an area of land equal to 43,560 square feet. For visually purpose, an acre is most often compared to the size of a football field – not counting the two end zones, which are each 30 feet in length. Now try to envision one square mile, which is equal to 640 acres!

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Real Estate FAQ

18 Apr

What are all possible costs and charges when I intend to purchase a property?

If you purchase a new house/apartment directly from developer.
(Initial Deposit – minimum 10% of property value or depending on the offer.)

  1. Loan application processing fees (some bank might waive it depends on package offer)
  2. Insurance (MRTA & Fire insurance if you take the housing loan)
  3. Stamp duty
  4. Legal fees and costs
  5. Utilities deposit (Electric & Water)

If you purchase a sub-sale house/apartment from a vendor

  1. Loan application processing fee (some bank might waive it depends on package offer)
  2. Insurance (MRTA & Fire insurance if you take the housing loan)
  3. Valuer’s fee and costs
  4. Stamp duty
  5. Legal fees and costs
  6. Utilities deposit (Electric & Water)

How much should I pay for real estate agents fees (Professional fees)
The latest fee for service (effective on 1 October 2009) is 3% of the sale or purchase value for land and building.

How do I pay for the purchased unit and when should I pay?

If you purchase a new unit directly from a developer
The purchase price of the property shall be paid by you to the developer by installments as prescribed in Third Schedule of Sale and Purchase Agreement(Schedule of payment of purchase price). Every notice referred by a certificate signed by the developer’s architect in charge of the housing development.

If you purchase a sub-sale apartment from a vendor
The purchase price of the apartment shall be paid as prescribed in the Sale and Purchase Agreement between you and the vendor. You should understand and agree with the payment manner and period of payment of the purchase price. Therefore, you are strongly advice to seek your lawyer’s advice for further explanation.

Third Schedule,Housing Developers (Control and Licensing) Regulation 1989 Schedule of payment of purchase price

How much should I pay for legal fees?

Preparation of Sale & Purchase Agreement, the transfer of the property and attending to stamping and registration.
(The fees are based on a schedule with a minimum of RM200)
Consideration up to RM100,000 = 1% of the purchase price
Consideration up to the next RM4,900,000 = 0.50% of the purchase price
Consideration exceeding RM4,900.000 = 0.25% of the purchase price

Preparation of the Loan Agreement of the property and attending to stamping and registration.
(The fees are based on a schedule with a minimum of RM200)
Consideration up to RM100,000 = 1% of the purchase price
Consideration up to the next RM4,900,000 = 0.50% of the purchase price
Consideration exceeding RM4,900,000 = 0.25% of the purchase price

What is the loan application processing fee charged?

Processing fee has to be paid upon signing the bank’s letter of offer. The usual amount ranges from RM50 to RM200 per application. However, some banks do not charge for any processing fee during promotional periods.

What are the procedures and documents required to apply for a housing loan?

You will be required to fill in an application form for the loan with the following details :

  1. Personal particulars
  2. Particulars of employment/income
  3. Particulars of joint applicants
  4. Financial particulars (monthly income and expenditure,assets and liablities)
  5. Particulars of loan applied
  6. Details of property to be financed
  7. Particulars of other loans taken form other financial institutions
  8. Declaration

Documents required

  1. Photocopy of identity card
  2. Photocopy of the Sale & Purchase Agreement
  3. Photocopy of the latest income tax form or EA form
  4. Photocopy of the last 3 months salary slips
  5. Dated letter from employer
  6. Photocopy of the last 2 years profit & loss account (if-self employed)
  7. Photocopy of one year (current) housing loan statement (if refinancing)

What is Mortgage Reducing Term Assurance (MRTA) and should I pay for it?

MRTA is a scheme where you are covered for the amount of the loan for the period of the loan. MRTA premium is one lump sum and very often the lending institution will arrange fire and MRTA of insurance cover. If you pass away during the period of the loan the Insurance Company which issued the policy will pay the outstanding balance of the repayment to the bank/finance institution.

I am a foreigner, can I buy a house in Malaysia?

Yes, you can. However any purchase of property regardless of value must be subjected to the approval of the State Government and Foreign Investment Committee(FIC)

Does the vendor need any written consent from the developer for the sale and assignment of his/her apartment unit to me(sub-sale)?

Yes, if the strata title has not been issued to the vendor. Immediately after the execution of the Sale and Purchase Agreement between you and the vendor, the vendor shall forth with apply to the Developer for written consent to the sale and assignment of the apartment unit to you. All administrative fees for obtaining the consent including the registration fees, whatever outstanding interest/charges shall be borne by the vendor.

In the event written consent is refused by the developer to the vendor, the vendor shall refund the deposit (if any) without interest to your solicitor and the Sale and Purchase Agreement between you and the vendor shall forthwith be null and void.

What is the Real Property Gains Tax (RPGT)?

As a Malaysian citizen, either individual or company, you will be subjected to RPGt only if you sell within 5 years from the date of acquiring the property. the taxable amount is based on 5% from the chargeable RPGT amount if disposal within 5 years from the date of acquiring the property. RPGT shall be retained by your solicitor. Your solicitor is authorized to pay this sum to the Director-General of Inland Revenue upon receipt of the notice of assessment to procure the Certificate of Clearance.

However, if you are not a Malaysian citizen, any disposal of the property will attract RPGT of 30% on the profit.