Learn all about the Sale and Purchase Agreement in Malaysia. Understand the process, legal fees, stamp duty, and important steps to ensure a smooth home-buying experience with expert advice and tips.
Imagine this, you’ve finally found your dream home. It’s perfect, nestled in a quiet suburb with a garden just right for Sunday barbecues. But as excitement builds, so does the paperwork.
Amidst all the documents, one stands out—the Sale and Purchase Agreement (SPA). For many Malaysians, understanding this crucial document can be the difference between a smooth purchase and a stressful ordeal. Let’s dive into what an SPA is all about and how it plays a pivotal role in buying a house in Malaysia.
What is a Sale and Purchase Agreement In Malaysia?
A Sale and Purchase Agreement, or SPA, is a legal document that lays out the terms and conditions of buying a property. Think of it as the roadmap that guides the transaction between buyer and seller. It includes important details like the price of the property, payment schedule, and the responsibilities of both parties. Essentially, the SPA protects both sides and ensures everything goes according to plan.
Who Prepares the Sale and Purchase Agreement in Malaysia?
In Malaysia, the buyer’s lawyer usually drafts the SPA. This lawyer makes sure the document follows Malaysian laws and looks out for the buyer’s interests. The seller can also have their lawyer review the SPA to ensure their rights are protected too. So both sides have a fair and clear agreement.
Can Buyer and Seller Use the Same Lawyer in Malaysia?
While it’s possible for both the buyer and the seller to use the same lawyer, it’s generally not recommended. Using different lawyers helps avoid any conflict of interest and ensures that both parties have someone dedicated to their best interests.
How Much are the Lawyer Fees for an SPA?
Lawyer fees for drafting an SPA in Malaysia are regulated and are usually a percentage of the property’s price. These fees typically range from 1-1.25% of the purchase price.
For example, if your new home costs RM500,000, you might pay around RM6250 in professional legal fees.
Professional Lawyer Fees:
For the first RM500,000: 1.25% (subject to a minimum amount of RM 500)
For the subsequent amount: 1%
Note: This structure applies to lawyer fees for both house-buying and loan agreement processes.
However, there are also other charges like, disbursement fees, service tax and other related fees.
How Much is the Stamp Duty for an SPA?
Stamp duty is a tax you pay on legal documents, including the SPA. In Malaysia, the stamp duty for an SPA is calculated based on the property’s price or market value, whichever is higher. The rates are:
– 1% for the first RM100,000
– 2% for the next RM400,000
– 3% for the next RM1,500,000
– 4% for amounts above RM2,000,000
Who Signs the SPA First, Buyer or Seller?
Typically, the buyer signs the SPA first to show their commitment to buying the property. After the buyer, the seller signs the agreement. This order ensures that the buyer is fully aware of the terms before the seller finalizes it.
What is the Deposit in the Sale and Purchase Agreement?
When signing the SPA, the buyer usually pays a deposit, which is often 10% of the property’s price. This deposit shows the buyer’s commitment and is part of the total payment for the house.
What Happens After a Buyer Signs SPA?
Before signing the SPA, it is crucial for the buyer to secure loan financing from the bank. Once the financing is in place and the SPA is signed, the buyer’s lawyer will submit the agreement to the relevant authorities and obtain the necessary approvals. After all conditions are met and payments are made, the ownership of the property is officially transferred to the buyer.
What if I Lost My SPA?
If you lose your SPA, don’t panic. You can get a replacement copy by contacting your lawyer or the authorities that processed the original agreement. It’s important to have a copy for your records and any future legal matters.
Can I Cancel After Signing the SPA?
Canceling an SPA after signing it can be difficult and might involve penalties. Terms of cancellation are usually outlined in the SPA itself. If you’re thinking about canceling, it’s best to review these terms and get legal advice.
How MalaysiaHousingLoan.com Can Help
At MalaysiaHousingLoan.com, we understand that buying a home can be overwhelming. That’s why we offer Home Loan Consultation services to help you every step of the way. From getting a sale and purchase quotation from a lawyer to finding the best financing options, we’re here to make your home-buying journey as smooth as possible.
Conclusion
Buying a home is a big step, and understanding the Sale and Purchase Agreement is crucial for a smooth transaction. By being informed and seeking professional help, you can ensure that your home-buying process is stress-free. Ready to take the next step toward owning your dream home?
You can contact us here.
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