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Buying PropertyBack to top Back to main Skip to menu
Malaysia - Buying Property
What qualifications should estate agents have?
A good source of information about estate agents is LPPEH, which is The Board of Valuers, Appraisers, and Estate Agents of Malaysia. In order to register as an estate agent, an individual must have a university education in estate management or similar curriculum, a diploma in Estate Agency, and a two-year training period under a registered estate agent. After these requirements are met, the individual must pass two exams and undergo an interview by a Boards review panel.
Estate agent fee rates are regulated by LLPEH, and range between 2% to 2.75%, depending on the property value. Typically, agents get 2.75% of the sale if the property is valued at under $500,000, and 2% is the property value is over $500,000. Estate agent commission can be paid by either the buyer or seller.
Where else can you find details of property for sale?
There are several great resources available with information on property for sale in Malaysia. On iProperty, listings for both commercial and residential real estate are available with mortgage calculators and agent listings. PropertyGuru is another good resource for a wide range of property listings. Expat blogs and websites offer tips on buying real estate in Malaysia, and ExpatExchange includes listings with their advice. The Star, which is Malaysia’s national newspaper, is also a good source of listings.
Should I use a buyer’s agent?
When purchasing real estate in a foreign country, it can be helpful to use a buyer’s agent so that you are given the best information on which to make your buying decision. A buyer still needs to do their due diligence and take responsibility, since a buyer’s agent stands to earn a commission with the sale. When looking for a buyer’s agent, it is important to make sure they have all of the same qualifications as any other estate agent.
Are there any organizations that support expats?
There are several organizations for foreign property buyers, and expat forums provide a wealth of information. Contributors are expats who have usually lived in the country for a good while, so they have a non-exhaustive list of tips, warnings, and maybe even some information on properties that can put you, as a buyer, in an advantageous position.
What should I expect during the house buying procedure?
Before seriously considering purchasing a house, there are several things to be considered. Location, schools, and budget are important factors. In general, a buyer is expected to make at least a 10% down payment, with a bank financing the rest as a mortgage loan. Once you select the house you intend to purchase, you should have it inspected for any major defects. If the house passes inspection, apply for your loan, and once approved you can submit a formal offer. If the offer is accepted by the seller, you (the buyer) must pay a 2% or 3% deposit based on the purchase price. You can hire a lawyer to review the sales and purchase agreement, then you will pay an additional 8% to 7% deposit to bring your total down payment up to 10%. Once the sales and purchase agreement is signed and notarized, it must be registered at the land office registry. At this point, the buyer is free to move into the house.
Should I hire a lawyer?
It is important to find a good lawyer to represent your interests during real estate purchasing. It may be easy to simply go by word of mouth or advertising, but you have no assurance of their competency. The Malaysian Bar is a great directory for finding qualified lawyers as only licensed lawyers are listed.
The lawyer and notary fees are paid by the buyer. The lawyer typically requires 0.4%-1% of the sale price, and the notary fees are 1%-3% of the sale price. As mentioned before, the seller pays the estate agent’s fees, which range from 2% to 2.75% depending on the property value.
Is there anything I should look out for?
Recent changes in real estate sale regulation have made it more difficult for foreigners to purchase property in Malaysia. In 2014 the federal government of Malaysia set the minimum purchase price for foreigners at 1 million Malaysian Ringgit, which is equal to about $226,000 currently. What a lot of expats don’t realize is that state governments overrule federal regulations when it comes to property sale, so the minimum purchase can be even higher in some places, such as Selangor. Recently, the western Malaysian state of Selangor raised the minimum foreigner purchase price to 2 million Malaysian Ringgit. The state of Panang has also raised the minimum foreigner purchase price from 250,000 Ringgit to 500,000 Ringgit. These minimums can lead to falsely inflated home prices in order to meet these minimums.
It can take a considerable about of time for a real estate purchase to be completed, so it is best for the buyer to rent a property for the duration, especially if the sale falls through. A buyer should also do plenty of research in regards to a potential mortgage loan. While most guidelines recommend the buyer have enough for a 10% out of pocket down payment, there have been instances where a Malaysian bank would only issue a 60% or 70% loan, leaving the buyer to pay a 30% or 40% down payment. While there are a few pitfalls to purchasing property in Malaysia, due diligence and research will help towards a smooth acquisition.
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