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What Are The Things Involved In Closing The Sale Of A Property In Malaysia

Author: Mohamed Fareed
by Mohamed Fareed
Posted: Nov 28, 2020
real estate

A person has got a buyer for his property! Before celebrating, he has a thing to do, which is the closing. It’s a procedure of transaction of documents and cash for the seller to transfer his property ownership. In Malaysia, this procedure normally takes three months and covers property inspection through to paperwork signing. The procedure has several steps, and a real estate agent can make it smooth for the seller. He will inform the seller about the payments he must make and the documents he must prepare. The seller must bear several costs, and they can eat into his profit. Some are RPG, Real estate agent fee, SPA legal fees, miscellaneous fees, CKHT 1A form, etc.

The seller must also pay the 6% govt. tax on his legal services.

Earnest Deposit

The buyer pays this deposit to show their seriousness about purchasing the property. In the Property development Malaysia market, the amount is usually between 1% and 3% of the sale price. Usually, an escrow company holds this deposit. A legal and clear paper trail should be made to avoid any possibility of fraud. Buyers who back out for anything not falling under a contingency will most likely forfeit this money.

Contingencies

There are conditions in an offer to fulfill to keep a sale moving forward. These conditions are contingencies. The buyer can back out if the conditions aren’t met. The regular contingencies that a seller encounters during this procedure are inspection, appraisal, title, and financing.

Title And Financing

A buyer who has a title contingency will confirm that the house’s title doesn’t have any issues before purchasing. A case in point is a property that’s under the master title for over ten years is a red light. What about the financing contingency? A buyer who cannot secure a loan can back out and recover their earnest deposit money.

Title Insurance

Issues with the property title could arise after purchasing a property with a title contingency in place. "Title insurance defends from losses if this happens. Typically, two parties need it, namely, the buyer and the lender.

Home Appraisal

The buyer could be getting a mortgage for the concerned house. In that case, the mortgage lender will ask for a home valuation in the Property development Malaysia market. For a house that doesn't appraise, the buyer must decide his next step. A buyer who has a home appraisal contingency can back out or renegotiate a different price. What should the seller do as a preparation for this situation? He should have all his paperwork prepared for the appraiser. He should offer all the key home improvements he did for the appraiser to make a precise appraisal.

The buyer will organize a home inspection. He can do it himself or engage an expert inspector to deliver a report on any problems with the house. A buyer who has an inspection contingency and finds something wrong can back out. Finally, the seller has to arrange a walk-through of the property. There are many options for property financing.

About the Author

Fareed is a graduate of computer science engineering, a writer and marketing consultant. he continues to study on Nano technology and its resulting benefits to achieving almost there.

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Author: Mohamed Fareed
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Mohamed Fareed

Member since: Feb 11, 2017
Published articles: 1173

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