Cash Flow Requires
Your initial cash flow is the amount of money you are prepared to spend to acquire your property.
You should have minimum cash prepared for the following (foreigner will have different rates applied):
• 10% Down payment: the proportion of the purchase price not covered by financing (banks will typically lend 80-90% of the purchase price)
• Legal fees: 1% for the first RM150,000, 0.7% for the next RM1,000,000, 0.6% for the next RM2,000,000, from RM2,010,000 - RM5,000,000 is 0.5% and RM5,010,000 - RM7,500,000 is 0.4%.
• Property stamp duty: 1% for the first RM100,000, 2% for the next RM400,000 and RM500,000 & above is 3%.
• Loan agreement stamp duty: 0.5% of loan amount transfer
• Disbursement fees include fees for registration of charge, land search and bankruptcy search (RM300–700 in Wilayah Persekutuan and Selangor)
• Processing fee: one-time fee charged by the financial institution for loan processing (RM50-1,000)
Loan amount you can ask for
You will also need to think about ongoing costs following acquisition of the property, such as financing costs. As a guide your monthly commitments on paying instalments for your house, car and other payments should not exceed 1/3 of your gross monthly household income. The Base Lending Rate (BLR) is currently 6.35% (most banks offer a small discount to BLR). The length of a loan can range anytime up to purchaser 70 years old.
For information on mortgages, see http://www.bankinginfo.com.my/
The Legal Process
Letter of offer:
the seller will sign the letter of offer previously signed by you and accept your deposit (this is typically 2~3% of the property price and can also be kept by the estate agent as stakeholder until the Sale and Purchase Agreement (S&P or SPA) has been signed) – the letter of offer gives a timeframe for the transaction including when the S&P should be agreed and signed (usually about 3 weeks after the letter of offer has been signed); your lawyer should check the seller’s title before you sign the letter of offer to ensure he is the actual owner of the property
S&P:
the S&P will give the details for the transfer and specify any warranties; you should now give the seller a deposit of 10% of the purchase price less the amount of deposit given at the letter of offer stage
State authority consent:
this only applies to transfers of leasehold land or if a foreign buyer is involved and it can take from 6 weeks to 3 months
Completion:
completion will usually take place within 3 months of the S&P (or state authority consent if applicable) but may be faster if you are a cash buyer or the seller does not have any existing loan secured on the property. You now pay the balance 90% of the purchase price to the seller and you finally get the keys to your new home!
SELLING GUIDE
Selling Cost
Estate agents' commission:
2.75% on the first RM500,000 of the property’s selling price
2% on any amount over RM500,000.
Property Sale & Purchase Legal fees:
- For the first RM150,000, the legal fees payable is 1%
- For the next RM850,000, the legal fees payable is 0.7%
- For the next RM2,000,000, the legal fees payable is 0.6%
- For the next RM2,000,000, the legal fees payable is 0.5%
- For the next RM2,500,000, the legal fees payable is 0.4%
- For the remaining, if any, negotiable
For instance, if the purchase price is RM500,000. The calculation is as follows:
Total legal fees payable:
(RM150,000 X 1%) + (RM350,000 X 0.7%) = RM 3,950.00
No discount rule
According to solicitors’ Remuneration Order, lawyers are strictly not allowed to give discount in conveyancing matter. Some sellers do not instruct a lawyer and therefore save on the legal fees. This is possible because the buyer’s lawyer will draft the Sale and Purchase Agreement. However, not using a lawyer is not recommended unless you really know what you are doing. The Sale & Purchase agreement may seem simple enough to read but you will be surprised how often your lawyer will point out something that you would not have noticed that could have a material impact.
The Sales Process
Letter of offer:
you will sign the letter of offer previously signed by the buyer and accept the buyer’s deposit (this is typically 2% of the property price and can also be kept by the estate agent as stakeholder until the Sale and Purchase Agreement (S&P) has been signed) – the letter of offer gives a timeframe for the transaction including when the S&P should be agreed and signed (usually about 3 weeks after the letter of offer has been signed)
S&P:
the S&P will be drafted by the buyer’s lawyer and give the details for the transfer and specify any warranties; on signing you should receive a deposit of 10% of the purchase price less the amount of deposit given at the letter of offer stage
State authority consent:
this only applies to transfers of leasehold land or if a foreign buyer is involved and it can take from 6 weeks to 3 months depending on the state. KL (DBKL) is usually the the quickest
Completion:
completion will usually take place within 3 months of the S&P (or state authority consent if applicable) but may be faster if a cash buyer is involved; you should now receive the balance 90% of the selling price less any mortgage balance paid to your lender
No comments:
Post a Comment