Should I Sign Sale & Purchase Agreement (SPA ) Without My Loan Approve?

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Should I Sign Sale & Purchase Agreement (SPA ) Without My Loan Approve?

Today, we received a call from Mr A (customer) and we talked a bit about his background and profile. He bought a house and signed Sale and Purchase Agreement. He does not apply for any loan yet.

When we prompt further, it seems like he was pushed by property agent to sign the Sale and Purchase Agreement.

First of all, never sign Sale and Purchase Agreement without getting the loan approval.

The property agent might persuade you to do so because they are on commission based, and most of them will only get pay after you sign the Sale And Purchase Agreement. Therefore, you can see why they can be so pushing to a customer.

As a customer, you should not sign the Sale And Purchase Agreement until you have a written confirmation of the loan’s approval.

The reason being:-

1. If you signed the SPA, and your loan is not approved. Your 10% deposit will be forfeited. If the purchase price is RM400,000, 10% deposit is about RM40,000. For most of us, that is a huge amount, and you do not want to waste such money without owning any house.

2. When the deal is not going through, the legal fees that you paid will be forfeited as well. It might cost about 2-3% of the purchase price. If the Purchase price RM400,000, 3% is about RM12000.

3. Let said; you signed the SPA. And loan approved after two weeks of signing SPA. For some straightforward cases, the three months of full settlement to a seller will start from the date of SPA. In this case, you are losing two weeks time because you signed the SPA too early. Losing time just mean your lawyer will have less time to complete the whole transaction, and you might slap with late payment charges from the seller.

Conclusion: Get Your Loan Approve Before Sign Sale And Purchase Agreement (SPA).

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By | 2016-11-01T10:45:56+00:00 October 10th, 2016|Buying A Home, Home Loan Library, Latest News and Update|0 Comments

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