9 Must-Know Steps for House Purchase Procedure in Malaysia

House Purchase Procedure in Malaysia

A lot of people dreamt of owning a house but for most people, but a lot of us do not know the House Purchase Procedure in Malaysia and most of us is unclear about the procedure to purchase a house in Malaysia. Like most of us, it is very hard to find full and complete information about House Purchase in Malaysia on the Internet as the information are not properly listed out for us to refer.

Here, we list out the Step-by-Step procedure to purchase a property in Malaysia, you can use it as a reference.

House Purchase Procedure in Malaysia:

Step 1: Find a property you love and set your budget

First and foremost, find a property you like. Compare between multiple properties and think from multiple aspects such as: intermediate terrace house, condominium, apartments, townhouse, gated house and so on, and of course need to suit your budget.

Step 2: Contact seller to view property

Contact the seller (developer or direct seller) to get more information about the property, arrange an appointment to view the property. Now, most properties are handled by Real Estate agent, so buyer and seller seldom meet directly.

Step 3: Fill in and sign Booking Form

After view the property and it meets all your needs, you can consider placing a booking fee and get an official receipt. Before paying the booking fee, you will need to fill in a Booking form (will be provided by Real Estate agent or Developer). Read through the terms and conditions, fill in and sign the Booking form if you agree to the terms and conditions.

Some terms and conditions to take note before signing the Booking Form:
1. How many days are given for buyer to apply for loan? If loan application is not out by the expiry day, what will happen? Is it negotiable if loan application is delayed?
2. If loan rejected, the booking fee can be full refunded?
3. How many days after loan approval, purchaser can get key? (This is for completed property under sub-sale, meaning property sold by someone else, not developer).

Step 4: Apply for Mortgage

Apply for mortgage loan at your preferred bank. This will involve Mortgage Interest Rate, Type of mortgages(Full Flexi, Semi Flexi and ). Choose the type suitable for your need, get more advice from friends and family to choose the best mortgage)

Step 5: Sign Letter of Offer

After your mortgage loan is approved, you will need to go to the bank to sign the Letter of Offer at Bank.

Step 6: Sign Legal Document (SPA, MOT, Loan Agreement etc)

Sign legal documents at lawyer firm (SPA, MOT, Bank Mortgage Legal Agreement, Statutory Declarations etc.) and pay the legal fee (fully covered by purchaser or 50:50 between purchaser and seller/developer) and get official receipt.

Step 7: Down payment

Pay down payment (minimum 10% of purchase price)

Step 8: Pay Monthly Mortgage

Wait for instructions from bank to start paying monthly mortgage. Mortgage payment will be based on the schedule listed in SPA, payment of mortgage will be done based on the stage completed by developer.

Example: House Price = RM600,000.00
Developer done the 1st stage Foundation Work, they will collect RM60,000.00 (10% of total purchase price) from bank. Once developer get the RM60,000.00 from bank, bank will inform purchaser to start pay monthly mortgage, the amount of the monthly mortgage will be calculated based on the RM60,000.00.

This process will repeat based on the developer completion stages by stages. Nearing the end of the construction (developer already completed all the construction and claimed all the money in every stages), your monthly mortgage payment will slowly increase until the amount as calculated in your Letter of Offer.

Step 9: OP and Get Key

Once the Property completed construction, developer will apply for Occupation Permit (OP). OP approved and this is considered property fully completed. Purchaser will receive the house key. Your house is completed and you have gotten your key, continue your mortgage payment.

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