Complete Guide and

Checklist of
Purchasing a Subsale
Residential Property
in Malaysia
Produced by KCLau.com
Personal Finance Money Tips for Malaysians

KCLau & Surinta Abraham

Email: support@kclau.com

Complete Guide and Checklist of Purchasing a Subsale Residential Property in Malaysia

CONTENTS
Complete Guide of PURCHASING A RESIDENTIAL SUBSALE PROPERTY IN MALAYSIA (APARTMENT/CONDO) FOR
YOUR OWN STAY ...........................................................................................................................................................3
Preliminary questions to ask yourself:.......................................................................................................................3
What are your key questions in determining what the right property for you is? ................................................3
The Property search: .................................................................................................................................................3
Things to do while you are property hunting ............................................................................................................3
Making the offer ........................................................................................................................................................3
Once youve made the offer and it has been accepted, next steps: .........................................................................4
Payment of earnest deposit fee & signing of booking form, with agent ...............................................................4
Appointing lawyers ................................................................................................................................................5
Applying for Mortgage ...........................................................................................................................................5
Determination of inventory list what does the Vendor leave and what does he take? .....................................5
Signing of SPA (Sales and Purchase Agreement) .......................................................................................................5
Valuation Report ....................................................................................................................................................6
Opening your home loan account .........................................................................................................................6
EPF withdrawal ......................................................................................................................................................6
Loan Agreement ........................................................................................................................................................7
Insurance on the property .........................................................................................................................................7
Partial disbursement & Full disbursement ................................................................................................................7
Vacant possession......................................................................................................................................................8
APPENDIX A: SAMPLE PROPERTY VIEWING CHECKLIST ...............................................................................................10
APPENDIX A1: LIST OF DOCUMENTS FOR STANDARD LOAN APPLICATION : ..............................................................13
APPENDIX B: SUMMARY OF ASKING/TRANSACTED PRICES : .......................................................................................14
APPENDIX C: SAMPLE INVENTORY LIST .......................................................................................................................15

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Complete Guide and Checklist of Purchasing a Subsale Residential Property in Malaysia

APPENDIX D: GUIDE TO PARTIES INVOLVED IN THE TRANSACTION ............................................................................16
APPENDIX E: Sample Legal Fees ..................................................................................................................................17
APPENDIX F : AGREED APPORTIONMENTS ..................................................................................................................18

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Complete Guide and Checklist of Purchasing a Subsale Residential Property in Malaysia

COMPLETE GUIDE OF PURCHASING A RESIDENTIAL SUBSALE PROPERTY IN MALAYSIA

(APARTMENT/CONDO) FOR YOUR OWN STAY
PRELIMINARY QUESTIONS TO ASK YOURSELF:
WHAT ARE YOUR KEY QUESTIONS IN DETERMINING WHAT THE RIGHT PROPERTY FOR YOU
IS?
-

Location
Size
Facilities
Age
Tenure
Proximity and access to work
proximity and access to schools
amenities including shopping, leisure, religious facilities, parks
safety
prestige

THE PROPERTY SEARCH:

1.
2.
3.

Star newspaper, Saturday edition

Iproperty.com.my
Propwall.my
Mudah.my
Identify potential properties
Call up the agents/owners
Fix viewing appointments

Take a checklist with you when viewing properties. See Appendix A for a sample checklist.

THINGS TO DO WHILE YOU ARE PROPERTY HUNTING

-

pre-qualification of loan - meet up with the bank and develop a relationship with an officer to assist with
pre qualification.
Documents you will need at this stage will include those described in Appendix A1.

MAKING THE OFFER

-

Once youve found the right ONE(s), you got to make the offer to purchase

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Complete Guide and Checklist of Purchasing a Subsale Residential Property in Malaysia

Do further research. Agents will often intimate that they have a large number of buyers about to make
an offer in order to bump up the price.

Create a summary of units sold and last transacted prices in the last 1 year to get a better idea of the real
market price. You can do this by researching on the various websites. Look for other listed properties and
call up the agents to find out if the unit is still available. If it has been sold, ask for the transacted price.
Most likely the agents will tell you, if you call them up. See Appendix B for a template for creating a
summary of last transacted prices.

Get your bank to do a valuation and assessment for loan. Be very careful here as a lot of Vendors simply
price their properties at prices far in advance of the actual valuation offered by Banks. Be wary of agents
who tell you that they can get their valuer who is a personal friend, to give you a higher price if you use x
and y bank. Dont be fooled if 3 independent banks give you the same valuation, and only the agents
friend is willing to go much higher, this only means that someone along the way is taking a kickback.
Such practices are unethical and in breach of the professional rules that govern registered valuers. So
even if the friend is able to come through with a higher valuation and justify a higher margin of
financing, the Purchaser is left to bear the risk that during a future sale, the valuation may not be as high;
or, at the point of an auction for default, the actual price of the property will be much lower based on
independent valuation. The ultimate loser here is the Purchaser (while the agent would have already
collected his fee).

Plan your budget. It should include:

o Down payment: the proportion of the purchase price not covered by financing (banks will
typically lend 80-90% of the purchase price)
o Legal fees:
1% for the first RM100,000,
0.5% for the next RM4,900,000
o Property stamp duty:
1% for the first RM100,000,
2% for the next RM400,000
3% for the next RM500,000 RM2million
4% above RM2million
o Loan agreement stamp duty: 0.5% of loan amount transfer
o Disbursement fees include fees for registration of charge, land search and bankruptcy search
(RM300700 in Wilayah Persekutuan and Selangor)
o Processing fee: one-time fee charged by the financial institution for loan processing (RM50-1,000)

ONCE YOUVE MADE THE OFFER AND IT HAS BEEN ACCEPTED, NEXT STEPS:
PAYMENT OF EARNEST DEPOSIT FEE & SIGNING OF BOOKING FORM, WITH AGENT

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Complete Guide and Checklist of Purchasing a Subsale Residential Property in Malaysia

Earnest deposit is normally 1-2% of the agreed property price. Agent will have a standard template booking form
to facilitate the transaction.

APPOINTING LAWYERS

Appoint a firm of solicitors to act for you as the Purchaser. As part of the instruction, forward the firm a list of
parties involved in the transaction. See Appendix D for a sample list of parties involved in the transaction.

APPLYING FOR MORTGAGE

Loan letter of offer will be issued by the bank. It will contain the salient terms of your loan. A list of such terms
would include:
-

Type of loan
Amount of loan
Purpose of loan
Description of property
Duration
Processing /Set up Fee
Monthly service charge
Prevailing interest and Repayment
Instalments
Security Documents
Interest rate on excess
Prepayments
GMTA Group Mortgage Term Assurance or MRTA Mortgage Reducing Term Assurance (if any)
Conditions precedent to drawdown

DETERMINATION OF INVENTORY LIST WHAT DOES THE VENDOR LEAVE AND WHAT DOES
HE TAKE?
-

Do a recci (fact finding visit) of the property and note down what items you want the Vendor to remove
and what items you would like the Vendor to leave.
Once agreed, this list becomes the agreed inventory list a list of items that you will expect to find when
you take over vacant possession. This document also forms part of the SPA.
See Appendix C for a sample inventory list

SIGNING OF SPA (SALES AND PURCHASE AGREEMENT)

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The signing of the SPA can take place separately ie. you sign and forward to your solicitor, and they will
forward to the vendors solicitor who will arrange for the vendor to sign and return to your solicitor. Your
solicitor then forwards to the Bank. You will need to issue the cheque for :
o The RPGT sum (2%) of the purchase price; and
o 8% being the remainder of the earnest deposit (10% - 2% already paid in the form of a booking
fee).
*Make sure that the premises are correctly described in the SPA ensure that any additional parcel
forming a car park that comes with the unit, is included in the description under the SPA.
You may wish to arrange for all parties to sign at the same time. This is because after you have signed and
issued the cheques, you will want to go to EPF to get your reimbursement from Account 2 as soon as
possible. However, the signed and stamped SPA is needed before you can do this. As such, if you sign the
SPA separately, you could have a situation where the Vendor takes his own sweet time to sign and you
cannot go to EPF for your reimbursement and yet, the money has already been debited from your
account. (It will be placed in a clients/stakeholder account with the Vendors solicitors but still, the
money would have been debited from your account). Dont be caught in this situation, make sure the
Vendor signs the SPA at the same time as you.
Prepare to pay the solicitors bill. A typical bill at this stage will look as set out in Appendix E.

VALUATION REPORT

The Bank will send a representative from its selected firm of property valuers, to take photographs of
your apartment and prepare a valuation report.
The cost of the valuation report

OPENING YOUR HOME LOAN ACCOUNT

A separate account in which funds to service your loan and interest payments needs to be opened with
the bank granting you your loan. Your loan officer should sort this out for you. Choose a branch nearest
to your place of work to facilitate easy sorting out of administrative matters.

EPF WITHDRAWAL

Friends and family may tell you that this is a relatively straightforward process and that you can expect to
withdraw your money easily and without hassle.
Be warned this may not necessarily be the case.
As a general rule, purchasers of property located in Selangor are advised to visit the PJ EPF branch, while
purchasers of property located in Wilayah Persekutuan are advised to go to the KL EPF branch. Trying to
process the paperwork for a KL-based property at the PJ branch can result in complications and confusion
over the type of forms from the Land Office which are required for the submission.

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Complete Guide and Checklist of Purchasing a Subsale Residential Property in Malaysia

A list of documents required by EPF is set out on their website at www.kwsp.gov.my. The relevant forms
to be filled in prior to submission can also be downloaded from the website.
Be prepared however sometimes, the EPF officers will ask for additional documents. Its best to take all
documents that you have, with you just in case.

LOAN AGREEMENT
The bank will send their standard loan agreement and charge document to your solicitors (If your solicitors are also
on the banks panel, they will prepare the documents according to the Banks approved template.
There are lots of onerous terms, one-sided clauses etc. Unfortunately, the bank will not entertain any attempt by you
or your solicitor to amend the clauses.

INSURANCE ON THE PROPERTY

What often happens is the bank will send an automatically-generated notice requesting a copy of the
existing fire insurance policy for the property within 2 weeks of date of the letter failing which the bank
will take out a policy on the property without further notice.

The problem here is that for condos purchased on the sub-sale market, there should be a master fire
insurance policy maintained by the building management office for the whole condominium already valid
and in force. If this is the case, there is no reason for the bank to take out another policy over the same
unit and bill you for it, as you will already be paying management fees a component of which is for your
existing policy.

What to do : Immediately contact the bank use the number in the letter get the email address and
name of the officer who picks up the phone and instruct them via email NOT to take out any additional
policy first

Next, contact the building management office and ask for a copy of the front page of the existing fire
insurance policy to be faxed/emailed to you. This page should contain the details of the policy including
validity period, unit number and details of the current owner.

Once received, email a copy of this document to the bank officer and ask for instructions what to do next.
Ideally, you should leave the existing insurance policy as is until the transfer of title is updated to reflect
your name as the new owner, after which you should notify the building management and get them to
update the policy accordingly.

Meanwhile, the bank should not be allowed to take out another insurance policy over the unit and bill you
extra.

PARTIAL DISBURSEMENT & FULL DISBURSEMENT

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Complete Guide and Checklist of Purchasing a Subsale Residential Property in Malaysia

The bank will issue a cheque for the partial drawdown sufficient for the Vendor to discharge the
outstanding on any loan he/she may have taken out over the property. This cheque will be sent to your
solicitors and they will forward it to the Vendors solicitors.

The MRTA portion will also be disbursed (if you have obtained financing for this portion).

Once the Vendor has utilized the partial drawdown to procure the discharge of the charge (assuming he had
charged the property to a bank earlier), the bank will release the original strata title to the Vendors solicitor.
This will then be forwarded to the Land Office for the updating of details, etc.

The Vendors solicitor will send it to the Banks solicitor (which could also be your solicitor as the
Purchaser).

The Banks solicitor will issue the advice to the Bank to proceed with full drawdown.

Once full drawdown has been issued by the Bank into the Vendors solicitors account, you will be notified.

From this point, the Vendor has a specified number of days within which to deliver vacant possession to
you, failing which you have the right to charge interest. The number of days is usually between 5 to 7 days
and is specified in the SPA.

VACANT POSSESSION

The next step is for the Vendors solicitor to release the Agreed Apportionments figure to your lawyer.
This is essentially, a list of all payments which the Vendor has already paid in part/full for items such as
management fee, sinking fund, water, etc.

You will need to reimburse the Vendor for the portion that he may have pre-paid, as he will not be
enjoying the use of the property from the date of vacant possession onward.

Conversely, there might be outstanding payments which are already due prior to the date of vacant
possession, which the Vendor should have paid. These amounts should be calculated as well and set off
against the total agreed apportionments figure outstanding.

See Appendix F for a sample agreed apportionment template.

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Complete Guide and Checklist of Purchasing a Subsale Residential Property in Malaysia

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Complete Guide and Checklist of Purchasing a Subsale Residential Property in Malaysia

APPENDIX A: SAMPLE PROPERTY VIEWING CHECKLIST

PROPERTY VIEWING RECORD

Date:
Name of Agent:
Contact No. of Agent:
Realtor firm:
INFO

DETAIL

Name of apt/condo

Year of construction

Name of developer

Year CF issued

Year of issue of strata title

Has strata title been issued?

Tenure

Leasehold/Freehold

Density & Occupancy rate

Owner/tenant mix

Mostly owners?
Mostly tenants?
Breakdown of nationalities? [Local/foreign]

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Facilities

Management Committee
comments on performance
to date, any issues, etc

Unit No. (full address)

Currently occupied? If
not, how long unoccupied?

Square footage

Price per square foot

Asking price (sale)

Potential rental amount

Bank valuation

Monthly management fee

Sinking fund fee

Assessment fee
No. of rooms
No. of bathrooms
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Renovations done (if any)

General comments on
condition of apartment &
assessment of extent of
renovations to be done

No. of covered carparks

If need to rent additional

covered/outdoor carpark,
available? How much per
month?

Apartment block built on

a slope ?

Any issues so far? Check for cracks along the outer structure or any signs of
problems

Are there any other

construction
projects
coming up around the
area? Whats the long
term development plan for
the area?

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Complete Guide and Checklist of Purchasing a Subsale Residential Property in Malaysia

APPENDIX A1: LIST OF DOCUMENTS FOR STANDARD LOAN APPLICATION :

DOCUMENT

Copy of IC

3 months payslips (fixed salary)

3 months bank statement showing crediting of

salary

Previous years income tax return with payment

receipt

Latest EPF statement

Liquidity backup, i.e.: Fixed Deposit, Saving/

Current Account

Other source of income such as rental income

substantiated by stamped tenancy agreement and
bank statement

Booking form
Application form

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APPENDIX B: SUMMARY OF ASKING/TRANSACTED PRICES :

Name of Apartment/Condo : .
Period : to .

DATE OF POSTING

AGENT/
CONTACT

(PROPWALL/IPROPERTY)

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ASKING
PRICE
/PSF

SIZE

TRANSACTED
PRICE

DATE OF
TRANSACTION

Complete Guide and Checklist of Purchasing a Subsale Residential Property in Malaysia

APPENDIX C: SAMPLE INVENTORY LIST

UNIT :

NO. OF UNITS

LOCATION

ITEM

TO BE
REMOVED BY
VENDOR?
[Y/N]

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APPENDIX D: GUIDE TO PARTIES INVOLVED IN THE TRANSACTION

NAME

DESCRIPTION

Purchaser(s)

Loan Applicant (s)

Purchasers loan bank officer

Banks property valuer

Agent for the sale of the property

Agency for sale of the property

Co-Agent for the sale of the property (if any)

Vendor(s)

Solicitor for the Vendor

Solicitor for the Purchasers

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APPENDIX E: SAMPLE LEGAL FEES

Particulars
Legal Fees :
1. Sale and Purchase Agreement
2. Entry & withdrawal of private caveat
3. Submission of Borang CKHT 2A
6% government tax
Disbursements:
1. Stamp duty on the Sale and Purchase Agreement
2. Stamp duty on the transfer
3. Title search
4. Registration fee on the transfer
5. Registration fee on the entry and withdrawal of private caveat
6. Bankruptcy/winding up search
7. Affirmation fee on suratakuan
7. Transport charges
8. Telephone charges
TOTAL

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APPENDIX F : AGREED APPORTIONMENTS

ITEM

SUM PAYABLE BY PURCHASER TO

VENDOR

Service Charges

Sinking fund

Assessment

Quit Rent

Fire Insurance

Water charges

Indah Water
Konsortium

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SUM PAYABLE BY VENDOR TO

PURCHASER