When buying a house, one thing that we try to avoid is getting cheated by anyone. Let be honest; no one likes to be cheated.

Therefore, before buying a house, we need to have the right knowledge, more importantly, the right mind. The way we see it, there are three ways to get it right.

One, read more.

You can start by reading more books about buying a property. For instance, read a book that contains the steps, tips, and hacks of purchasing a property.

Secondly, you can watch an educational video.

Suppose you don’t like to read. Maybe video is the way to go. You can subscribe to Youtube Channel that specifically talks about this topic.

Follow our Youtube channel here.

https://www.youtube.com/malaysiahousingloan

Thirdly, you learn from experience.

If you have bought a few houses before, you will understand experience is where you learn the practicality.

But what happens if this is the first time you experience this?

Then I’d suggest engaging someone with mass experience in this industry, like us or anyone you trust, possess with such knowledge.

For us, we handle thousands of cases over the 15 years experience, so we accumulate these experiences and channel the wisdom to you so that you’ll be able to make wise decisions during the process. And at the same time lowering the risk that you might face.

Besides, we provide this consultation service for free, so you have nothing to lose.

avoid being cheated

I’m going to tell you a classic story. It’s a story about our client.

Her story of buying a house is the most common and classic mistake that happens most of the time, especially for first-time housebuyers. So, I hope you will learn something from her story.

Let’s start by giving her a name – Anna. (For privacy, I will keep her name secret)

A few weeks ago, we received a call from Anna. In the conversation, Anna mentioned she bought a double-story house in Kajang, Selangor.

The purchase price is RM300,000, and she had put down a 3.18% booking fee with the Property Agent.

She is a first-time house buyer and clueless with the process when it comes to buying a property.

PROBLEM NO 1: CAN’T APPOINT HER LAWYER

She told us, the Property agent insisted on her and the Seller to follow his Lawyer. According to the Property Agent, it will be more convenient for him. Because if there are two lawyers, it’s going to complicate things.

What does the Property Agent mean by “complicate things”?

According to Anna, it appears to the Property Agent; two lawyers will create more problems.

Because Purchaser Lawyer might disagree on specific terms and negotiate for better conditions and the mediation will be back and forth, it takes time. And this will be an inconvenience for him. Funny to me when he phrases it like that.

I agree with the Property Agent that two lawyers negotiate terms will take a slightly longer time to finalize the Sale And Purchase Agreement (SPA).

But I have to disagree with him when he said this process should be omitted because it’s going to be complicated for him.

Let’s get into the Purchaser point of view.

1. A Purchaser will pay about 15-17% of the property purchase price when buying a house. In this case, that about RM300,000 x 15-17% = RM45,000 – RM51,000. For some people, this is a lot of money. It might be from years of saving.

2. The Purchaser is the only one going to pay higher fees for the lawyer fees. SPA lawyer fees will cost about 3-4% from Purchase Price, and Loan lawyer Fees and Valuation Fees are about 2-3% from the loan amount. In this case, easily, that will be about RM12,000 for SPA and RM8000 for Loan.

Here the thought.

In this buy and sell transaction, the only party that will pay lots of money is Purchaser. When a Property Agent refuses to allow this Purchaser to use her Lawyer, it will mean these.

1. You can’t appoint your Lawyer because it is an inconvenience to me.

2. You will pay RM45,000 – RM51,000 to my recommended Lawyer.

3. You don’t need to know the credential and background of the Lawyer. (It can be a crook, I don’t care)

4. You CAN’T negotiate the terms and conditions because it is an inconvenience to me. I don’t care if this means the terms are unfair to you.

Do you know how ridiculous this even sound?

However, it does sound familiar.

Oh, wait!

Yeah, it sounds like Dictatorship.

The last time I check, we are living in a democratic country. We are allowed to appoint our Lawyer.

Let’s be honest here.

The only inconvenience that I can see from his point of view is that he will delay receiving the commission.

Property Agent gets their commission after you sign the Sale And Purchase Agreement (SPA). That is why you can see many will push you to sign the SPA.

Some even ask a Purchaser to sign before the loan approval. For me, that’s just not right.

What happens if the borrower’s loan rejected by all the banks and SPA signed? It’s going to be pitiful for the Purchaser. He/she will lose all the money. In this case, the whole RM51,000 will be gone. It’s going to be tragic!

First of all, the Purchaser is buying an RM300,000 house. It may not look a lot to the Property Agent, but it does mean a lot to some people. She is not buying a product that cost RM10, and simply pay and go. This is an RM300,000 purchase, which incurred a lot of money; that is why a fair agreement is a must!

The steps of negotiating terms and conditions between Seller and Purchaser are the most crucial part of this transaction.

You can’t merely agree with all the clauses, especially a biased clause, which only an experienced lawyer will notice. You need a good lawyer for that.

first time house buyer

PROBLEM NO 2: NO STAMP DUTY EXEMPTION

The property agent also told her she could not apply for the stamp duty waiver for first-time house buyers even though she is a first-time house buyer.

Personally, at this point, I think this Property agent is either too smart, too sneaky, or partly amateur.

If you’re in the industry, you should know that a first-time house buyer can apply for the stamp duty exemption. Unless you fall under exception case like you’re buying a service apartment, Soho, Sofo, and Sovo property. But, not in this case.

PROBLEM NO 3: ASK PURCHASER TO PAY RPGT

The next day, the Property agent call her and ask her to pay a few hundred more for the Real Property Gain Tax (RPGT). The funny thing, RPGT suppose to be shoulder by a Seller, and why did he ask a Purchaser to pay?

It’d be understandable if this is a markup case, where Purchaser wants to buy at a markup price to get a higher loan, and that will incur additional RPGT to the Seller. But it is not the case.

So, why the hell is he asking for more money from this unfortunate Purchaser? Only god knows.

And even, if the Seller requires to pay an RPGT, there is an exemption of RPGT until 31st December 2021.

People who are not well informed about the situation normally will be freaked out when stumbled upon this kind of inexperienced Property Agent.

Don’t get me wrong; not all the Property agent is like this.

Some are respectful and helpful to the Purchaser. But sometimes, if you run out of luck, you will meet this type of Property Agent.

And it will be useful if you equip yourself with the right tools and knowledge to avoid getting cheated when buying a house.

I do glad Anna found us online. And we manage to take control of the situation and assist her in dealing with the Property Agent.

avoid getting cheated

TIP 1: EDUCATE YOURSELF OR FIND SOMEONE WHO IS KNOWLEDGEABLE AND TRUSTWORTHY

Firstly, we offer her the right advice and insight into buying a house. We told her she doesn’t need to follow the agent’s Lawyer.

She can appoint her Lawyer- any lawyer she likes. We asked her to stand her ground and mention to the Property Agent; there is not even one clause on the booking receipt stating she can’t appoint her Lawyer. Besides, the laws never limit anyone to select their Lawyer.

So, Anna went back to the agent and stood her ground on the Lawyer’s appointment, and at last, the property agent agreed.

Meanwhile, we did recommend her with a few law firms and with no obligation to engage them. They quoted the lawyer fees to her, she negotiates, and after some negotiation, she chooses one of them.

TIP 2: ENGAGE A LAWYER TO HANDLE THE SITUATION FOR YOU

Secondly, about the stamp duty exemption, Anna’s Lawyer knows how to handle it. They will help her to submit for the stamp duty exemption application.

And at the same time, as a consultant, we will also highlight or remind the lawyer firm to apply for the stamp duty exemption.

Do you know if you don’t remind the law firm, they will not help you to apply?

Yeah, we heard from many callers in the past, their Lawyer doesn’t apply for them. The thing about stamp duty exemption, if you miss the chance to apply, you can’t re-apply again. And, you will not get the stamp duty exemption for the next property.

TIP 3: FIND THE RIGHT PERSON TO TRUST

When you meet the right person to help and trust, everything will be fall in line.

For instance, you come to us. We recommend trustworthy bankers and lawyers to you. All the bankers and lawyers are experienced, and the process will go smoothly.

So, it essential to find the right person to help you.

Even if there are challenges ahead, we can overcome it because of the experience we have.

On the other hand, if you meet someone who is like the Property Agent. It’s going to create more headaches along the way. And you might not be able to get the ultimate benefit from this process.

Thirdly, about the Real Property Gain Tax ( RPGT ), Anna’s Lawyer will solve the issue with the Property Agent.

If you face the same problem with your property agent, tell them that RPGT is paying by the Seller and is not from a Purchaser.

Besides, ask them to look for the RPGT exemption announcement this year. Our Prime Minister made the announcement. The announcement stated a Seller could get an RPGT exemption up to 3 properties until 31st December 2021.

Sometimes, it’s quite handy to have people with experience in the industry to guide you when facing such problems. That’s why you should consider engaging us.

Okay, we come to the end of this article –3 TIPS TO AVOID BEING CHEATED WHEN BUYING A HOUSE. I hope you’ll enjoy reading this as much as I enjoy writing it.

Suppose you are interested in reading about Stamp duty exemption. Please click here. https://malaysiahousingloan.com/exemption-for-stamp-duty/

I hope to see you in my next article, if you have any question, feel free to reach us at 012-6946746 or fill up the contact us form below.

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MALAYSIA HOUSING LOAN

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