Following from my previous write up on the property that we went to see and having to place a booking fee to temporary secure the unit that we wanted, we have been exposed to new things in dealing with the purchase of a property which I hope that it may benefit some of the new buyers or going-to-be new buyers of a property as I was quite stressed up that I didn’t get the answers from my googling research.
Booking a unit
When you fancy a house and that you have decided that you want to take up that particular unit, take note on the offers that developer is offering. It may be, pre-launch discount, developer rebates and bumi discounts. This acts as some savings to you as these amount reduces the cost of the property that you have to pay.
Also take note on other free items that the developer is giving out for example:
a. Free maintenance fee for xx year from the date of Certificate of Completion
b. Free legal fee and disbursement of the Sale & Purchase Agreement (I will come to this later about lawyers)
The developer will require you to place a booking fee or some people call it as earnest money. It is more like a deposit to temporary secure your booking until you get your loan from the bank. Best to pay this amount with a cheque. They do accept credit cards but please be mindful that there will be a 2% charge by the bank if in the event that you want to cancel your booking due to loan application not approved.
Useful tips: Be nice and make friends with the sales person. We were fortunate to get a very helpful sales person and she guided us all the way from the start up until the signing of S&P Agreement.
Apply for housing loan
Something that I learn from this is that you need to ask the developer who is the panel banks for their developer. This is because, if you have a preferred bank and the bank is not a panel bank to the developer, the bank cannot or does not want to disburse the loan amount to the developer. So do take note on their panel banks.
Apply for your housing loan and apply to multiple banks (from the panel bank’s list) Why? So that you can make comparison and see which bank offers you the best rate. Banks wants you as their customer and hence it is for us as a customer to decide which one that you favour the most.
Useful note: Once a bank offers their rate to you via their Offer Letter, you have 14 days to respond. But bear in mind, you can request from the bank to extend the expiry date of the offer should you wish more time to decide.
Getting a lawyer
This is something I know the least and I was not very comfortable of. I didn’t get enough information as per what I needed but along the way dad helped me by asking his lawyer friend and we some what know what we have to do.
You will be required to get a lawyer prior to signing the Sales and Purchase (S&P) Agreement. And the appointment of lawyers are as follows:
a. Loan Agreement (This is between you as a buyer and the bank)
b. Sales and Purchase Agreement (This is between you as a buyer and the developer)
c. Memorandum of Transfer (This is between you as a buyer and the developer upon completion of the property)
d. Memorandum of Charge (This is between you as a buyer and the bank)
(Item c and d will come in the later stage of the whole process, mostly after the completion of the property)
These lawyer fees come with a charge and it is not cheap! So, apart from planning your monthly commitment to the property that you will be purchasing, you must also have some savings to pay up these lawyer fees along the way.
As what I mentioned during the booking of a unit to take note what items that are borne by the developer hence it is free to us – mostly it would be on the Loan Agreement (for some developers, this must be borne by the buyer) and S&P legal fees.
For me, I had to pay the Loan Agreement fees and again similar with panel banks, developer would have their panel lawyers. Check with the developer if we have the option to not use their panel lawyers which mostly would say no. But anyway, their panel lawyers would give you a quotation on the lawyer fees. What we did was we managed to get another quotation from my lawyer dad friend and the difference is HUGE!
Our S&P fees are borne by the developer. Should we choose to select our own lawyer, then we will need to pay for the S&P Legal fees.
Useful tips: You must negotiate with the panel lawyers to reduce their fees. After all they would want to have you as their customer. Fight for the right price and so, you should get quotation from other lawyers for comparison. We managed to negotiate to come to OUR price and agreed to take the developer’s lawyer.
If you don’t negotiate and accept what the lawyer is quoting, you have paid them heaps of extra money, of which you could use that difference for something else.
Useful tips2: Get the lawyer to follow your timing schedule and not theirs. They tend to dictate to you when and where you should meet them up for signing which I find this quite annoying. Why? We are the ones paying the fees to them including their travelling cost. So make them drive to you and not you drive to their place! After all, we are the customer.
Signing the Agreement
Once you have agreed the time and place to do the signing of all the agreements. The lawyer will come prepared with tonnes of documents for your to sign and initials. Make the lawyer explain to you every agreement that you are signing so that you understood what the contents are. Please do not blindly sign the agreement without reading it. It will take hours as there are a lot of things to read.
Check on what you initially signed up for and what was written on the agreement especially:
a. Specification of your unit,
b. Warranty period for defects after completion,
c. Clause to say that you will only accept the unit if it is as per the square feet that you have agreed to buy. Or, some clause would say that the developer will pay compensation if the size runs about 2% from the actual square feet.
d. and other things that you have concerns on.
All done, all you need to do now is just wait until the lawyer provides you with the stamped copy of all the agreement.
For us, we after we signed the S&P Agreement, the sales person was there ready to hand in our welcome gift. It consists of 1 polo shirt, 1 t-shirt and a surprised gift! They said that this surprise gift is limited and we were fortunate to get it! I’m happy!! Alhamdulillah!