Tips on Buying Property in Malaysia

This manual provides a step-by-step guide to help you navigate through the procedure of purchasing a property in the secondary market in Malaysia. Secondary market (sub-sale) properties are those that have been previously owned and are usually located in mature areas with established residential communities.

1. Appointing a Real Estate Agent: To start your property search, it is advisable to engage the services of a reputable real estate agent. A good agent can assist you in finding suitable properties based on your requirements and budget.
2. Viewing Properties: Once you have appointed an agent, they will arrange property viewings for you. It is essential to communicate your specific requirements, such as budget and property size, to the agent to ensure that they show you properties that meet your needs.
3. Negotiation:After selecting a property, the next step is to negotiate with the seller regarding the price and other terms of the sale. Your agent will play a vital role in facilitating this negotiation process.
4. Signing the Letter of Offer and Paying Earnest Deposit: Once the negotiation is successful, you will need to sign a Letter of Offer (LO) and pay an earnest deposit, typically around 1-3% of the purchase price. The LO outlines the terms and conditions of the sale.
5. Appointing a Lawyer to Prepare the Sale & Purchase Agreement (SPA): In Malaysia, it is customary for a lawyer to prepare the Sale & Purchase Agreement (SPA) between the buyer and the seller. If you do not have a lawyer, your agent can recommend a suitable one. The preparation of the SPA usually takes between 2 weeks to 1 month, although it may take longer if the lawyer is meticulous.
6. Paying the 10% Down Payment: Upon signing the SPA, the buyer is required to pay a 10% down payment, which is calculated after deducting the earnest deposit. This payment is made to the lawyer.
7. Obtaining Necessary Consents: Certain consents may be required depending on the circumstances:
1. State consent: If the buyer is a foreigner, state consent may be necessary;
2. Developer consent: If the property is under a master title, developer consent may be required;
3. Land office consent: If the property is leasehold and the strata title is not yet issued, land office consent may be necessary.
8. Paying the 90% Balance Payment: After obtaining all the necessary consents, the buyer must pay the remaining 90% of the purchase price within 90 days. If the buyer is using a bank loan, they may need to pay their own funds first, and the bank will release the loan amount accordingly.
9. Settling Outgoing Payments: Both the buyer and the seller need to settle various payments (your lawyer can assist you in settling these payments), which may include:
1. Maintenance fee and sinking fund;
2. Fire insurance;
3. Assessment fee and quit rent;
4. Utility bills;
5. Rental and security deposit (if the property is tenanted).
10. Handover of Keys (Vacant Possession): Once all the payments are settled, the seller is obligated to hand over all the keys within 3-5 days as stipulated in the SPA. The buyer should inspect the property based on the inventory list provided.

Conclusion: Purchasing a secondary market property in Malaysia requires careful planning and attention to detail. By following the steps outlined in this manual, you can navigate the process more confidently. Remember to engage the services of a reliable real estate agent and lawyer to assist you throughout the transaction. Conduct thorough due diligence and ensure compliance with all legal requirements to protect your interests as a property buyer.

Professional Fee for Property Purchase and Rental:

The professional fee for purchasing a property is 1% + SST, while for renting a property, it is 1 month's rent + SST.

Other fees you may incur include legal fees, levy, state consent fees, and stamp duty fees (for purchase), as well as legal and administration fees along with stamping fees (for rental).

Just to note, in Malaysia the real estate market is generally an open market with predominantly non-exclusive listings, although exclusive listings do exist but are less common. As such, you may occasionally see the same property advertised by different agents at varying prices. In some cases, variations may reflect differing marketing approaches or earlier listing information that has yet to be updated.

Please be assured that the prices we present are based on the latest instructions approved by the property owners, and we will always act in your best interest to negotiate and secure the most favorable terms.

Additionally, certain practices such as rent-to-own arrangements, which may be more common in other countries, are not typically practised in Malaysia, as our property laws and transaction processes differ. We understand you may still be getting familiar with the local system, and we will do our best to guide you and ensure everything is handled smoothly in your best interest.

Visit www.penangpropertyangel.com now for an exciting glimpse into Penang's real estate market and discover your perfect home.

We kindly request you to reach out to us at penangpropertyangel@gmail.com so that we can connect you with the right professionals for further assistance.