1. Banks (greatest fuckers of all liars)
2. Property Websites (not as bad as banks but create a a rough idea of steps required but not thoroughly)
3. lowyatt (the flock of people who think they know but they really dont. Nothing has helped me from lowyatt unless someone wants money from advertising themselves for services that you are too stupid enough to get cheaper elsewhere)
I want you to look and remember this and will show you what really happens and what you should really do. Cause it seems like lowyatt people do this everyday buying properties. But does it work the same with buying a second hand property ?
You see when we were looking at buying our first home, we did these exact same mistakes. And while you hear about how hard things can get, you hear about this on lowyatt but no one offers solutions because they dont know the truth about what really happens.
Well if you have found me, then strap your shit Charlie, because the real truth works like fucking follows. And here are the steps and checks and things to do for paying for your home with all the horror stories (in the next topic) and documents needed :-
STAGE 1
(REN NUMBER & EARNEST DEPOSIT)
STEP 1. CHECKING YOUR AGENTS REAL ESTATE AGENT NUMBER (REN)
a) On your agents name card, it will show a real estate agents number.
b) If it does not exist then look at this website first https://lppeh.gov.my/WP2016/
c) Call
d) Call the office of your agent and check if the office has a valid existing telephone number
So you see, Step 2 illustrated above is wrong already unless your agent is from a very famous Real Estate Agency. Even then, whats there to stop even ME from selling a house to you if I had a fake REN number ?
*** Ensure that your agent is registered. If not just walk away. ***
STAGE 2
(PAYING EARNEST DEPOSIT)
This is the Earnest Deposit which is signed also together with the offer letter. This is a format I made for our Real Estate Agent and even our Lawyer as well. Some agents want the offer letter signed first. But in reality Property Agents will have that Earnest Deposit first and then get their Offer Letter signed. In lowyatt world and property websites, it simply isnt always true. You got money ? then you sign. This is my 3% of the property I had purchased. Get your Real Estate Agent to sign on it for formalities sake as well.
This is the Letter of Offer / Buyers Proposal to Purchase that will be given to you when you pass the cheque as well for your Earnest Deposit. This is where the Property Agent will make his commission from the sale of the Property. This letter was signed the same day May 21st 2016 when we passed our Earnest Deposit.
a) 2% if its less than 1 million.
b) 3% if its above 1 million. Did you know that ? Im sure lowyatt did. So did iproperty.
2. How long do I need to take to pay the deposit ?
14 days. Not 14 working days, 14 days.
What happens if during those 14 days to pay up there were holidays worrrrrr ? :
Tough shit mother fucker, if you gotta pay even on a national holiday, you have to pay. Holidays will not be added to the 14 days to pay your deposit.
*** Check with your agents always and if the owner allows for 21 days ***
3. Who does the cheque get written to :
Your agents company
4. Why not the owner of the property ? :
Because this is where the Property Agent will earn his commission rather than paying to the owner of the property. The property owner automatically loses 2 OR 3 % depending of the value of the property.
5. What happens if you dont pay up in time ? :
The property will be back up for sale. Simple as that.
STAGE 3
(GET A LAWYER)
On many property websites, it says you sign the SPA and hire a Solicitor. This is wrong. How can a SPA exist without the Solicitor ? Unless you are buying a new development.
Websites assume you will engage only with 1 Lawyer if you are buying a property second hand, but in reality its not entirely true. Our seller wanted to deal with their lawyer, we wanted to deal with ours
Why ?
Buying an already existing property could use 2 lawyers like in our case rather than sharing one. Most people do this why ? They know a friend who IS a lawyer already and will find a cheaper way of bringing costs down for lawyers fees. This will save you a few grand.
It does take a little more time dealing with 2 lawyers but both Seller and Buyer will deal separately to save money.
Misled information if you are buying property second hand. How can you sign the SPA if there is no lawyer first to draft it ? Does it mention above WHO drafts the SPA ? In the information above, how does the SPA magically appear ?
1. What do I do next ?
You will need to sit down with your appointed lawyer as soon as you have paid your Earnest Deposit.
Even while scouting for a Home, its good to already know a lawyer before hand. You will have no choice but to anyway. Your lawyer will draft out you Sales and Purchase Agreement (SPA) consequently so engage with one immediately. We already knew one so we had no issues.
2. What will happen when I do meet my lawyer ?
This is what will happen during your first meeting :-
a) Your Lawyer will describe your payment due to him for his fees. If he likes you he may offer you a discount. He may be a family friend like in our case.
b) Discussion about SPA will be on the table. Such as how long it will take.
c) Stamp Duty will be discussed which is part of the SPA and lawyers fee which you will have to pay for. Im not going into details with this because you lowyatt reading fuckers are smart enough to know how much. Your lawyer will describe how long it will take.
d) Change of Land Title which happens at the Land Office. You will hear terms like KTN 14A like its something you deal with everyday working next to your lawyer while you are sitting in your pencil pushing day job and have no clue what he means. Lowyatt people deal with this everyday because they invest in property all the time.
KTN 14A is a change in NAME of the ownership the the Land which happens at the Land Office. This is done by your lawyer as well.
You wont own the property yet with this form, this is just to let the land office know that there is going to be a change in ownership. The change in ownership of your land comes later once you have your loan approved. More of that in another topic.
You may see the form in STAGE 5 for the SPA and KTN 14 A below.
e) Your lawyer will ask if the property you are purchasing has any outstanding loan or if its" free of any encumbrances" in fashionable Lawyers terms. If the property still has a loan attached to the owners, then you will need to tell your owner to settle all debts and provide proof to your lawyer that there are no loans left with the banks they borrowed with. This is done through lawyers as well. however if in doubt, a CCRIS check can be performed by your lawyers to identify if the property is still tied to any banks.
f) Your lawyer will tell you as well that his job will be to draft out the Sales and Purchase Agreement, to change at the Land Office the title of the property owners name to your name(s) and to get the Stamp Duty. Thats what your lawyer really will do. The rest such as changing your TNB, Syabas / Water, and your Cukai Taksiran - paid to your local town council such as MBPJ (Assessment Tax) is all done by you. Not all name changes will be done by your lawyer, just the Land Department, Dealing with Banks loan approvals as well as your SPA. The rest is your shit.
The question you may have will be :
3. When do I pay my lawyer ? How much to pay ?
Well, just make an offer of 50 % now, and 50% when you get your Sales and Purchase Agreement and KTN 14A (Name change of Land Title) from him. This will now bring us to the next stage.
STAGE 4
(PAY YOUR REMAINING DOWN PAYMENT OF EITHER 7 / 8 %)
Its Cough up some money Time ! Make up your 10 % fee and here are some questions you may ask which lowyatt and property websites will tell you in real life
1. How long before I make the balance 7 or 8 percent ? :
1 month from the date of Downpayment. Example : If you paid your 2 / 3 % on the 1st of July, then by the 1st of August you will need to pay up the balance 7 or 8 %.
2. Who do I issue this payment to ? :
The home owner
3. Do I send this to the owner directly ? :
No, your lawyer will do this for you. He would collect the payment from you and it magically disappears into your sellers hands.
4. Why ?
Cause from here on out, your lawyer will be speaking to the owners lawyers and no American Dream Utopia where owners and buyers meet and have Starbucks together sharing coffee time together till sunset occurs. From here, any correspondences have NOTHING to do with your Property Agent. Its Lawyer to Lawyer. Only Lawyers talking with Lawyers. Only Lawyers and Lawyers.
This made up 3.5% for me and another 3.5% was done by my wife making 7% to complete the 10% Downpayment. Its important some format like above is done because dates and signatures are proof in case the Sellers lawyer wants to screw with you. At least you have proof of payment that was collected by a particular date with evidence.
Yes, I property and lowyatt told you the truth didnt they ?
Give yourself and the lawyers fair time to draft out the SPA. Pay your Balance not too soon but closer to the due date.
STAGE 5
(SALES & PURCHASE AGREEMENT- SPA & KTN 14A)
So now that you have paid your 10 % and have worked out stuff with your Lawyer and have found all is well, The SPA comes next.
Your Sales and Purchase Agreement will have inside approximately 16 pages of documents stating terms of the sale by the Seller and Buyer.
Prior to signing the Sales and Purchase Agreement, both the Sellers Lawyers and your Lawyers will engage in a little dance of going back and forth drafting the correct description of things. Our lawyer drafted the SPA and mentioned a double storey house when it should have been a single storey. Even I didnt notice this until the Sellers Lawyers pointed this out. This shit will take approximately a week.
Prior to signing the Sales and Purchase Agreement, both the Sellers Lawyers and your Lawyers will engage in a little dance of going back and forth drafting the correct description of things. Our lawyer drafted the SPA and mentioned a double storey house when it should have been a single storey. Even I didnt notice this until the Sellers Lawyers pointed this out. This shit will take approximately a week.
If you have paid your Deposit before engaging with a Lawyer then , good luck. It will be stressful. But not to lowyatt folks. They do this daily - Buying Houses.
So once the finer details have been ironed out, spelling checks, address checks, lot number, unit number, etc. Your SPA is complete. You will get to see the document being amended correctly, maybe a term or two will be added or stroked out.
The drafts should always be requested to be CC-ed to you in your email so that you see progress taking place and can correct any mistakes or approve any changes.
In our case we had only 1 change requested by the previous Sellers Lawyers, which was there will be no CF or CCC (Certificate of Completion and Compliance) as the Home we bought was built originally in the 1960s way before any CF's or CCC's were in place. Which we agreed upon anyway.
1. How long did it take to get the SPA Ready ?
2 weeks
2. What happens now ?
You are given 90 days from the date of the SPA to pay up the remaining balance
The document is actually pink in colour, this was the draft of ours. Once the draft is okay, you will have the date of your signing printed on the top front page of the SPA. From here, all hell starts from getting bank loans.
2. What happens now ?
You are given 90 days from the date of the SPA to pay up the remaining balance
This is where you will have a little sit down be it in our case at McDonalds SS15 Drive Thru in Subang, where we signed our Sales and Purchase Agreement with our Lawyer. About 20 or so pages being initialed all the way.
Once thats done your lawyer will also have ready a document for a name change from the Land Office for the new title. KTN 14 A (Kanun Tanah Negara) will be handed to you for signing as well.
It will look something like this in the end, but he will just give you a form for Applying for a change in ownership of land title first.
You will just have to sign the bottom part of the form first. The rest is filled up only when your home loan is approved. This is just a step forward in preparation of your home loan so as soon as your loan has been approved, this job has already been half done. Whats that again for property websites ? Oh yes thats right, Sign the SPA. No talk of KTN 14A right ? This is REALLY what happens. As you can see, there's also the Sellers Lawyers signature as well which will be required, so this is the little dance that both lawyers play going back and forth with documents. "Hire a Lawyer" after the SPA they said. My balls
Within a day or two, the SPA with KTN 14 A will be also delivered to the Seller and the Land Office. Once the Seller has also signed off on the SPA, the clock starts ticking for a home Loan.
The original KTN 14 A documents will not be given to you unless you bought your Home in cash. Because in our case we had to go with the banks, the Original KTN 14 A is now kept in a secret vault by the Banks we now owe. Only a Certified True Copy will be given to you by your Banks Lawyers which will be in the next topic.
This is where you pay your lawyer his balance 50% fee. But theres still a bit more work left for him if you are getting a home loan and post home loan as well.
Questions you may ask yourself :
1. How long is the SPA valid for ?
3 months / 90 days from the date the SPA is issued as mentioned on the front cover.
2. Does it include non working days ?
Yes
3. Does it include National Holidays and Public Holidays ?
Yes. However if you cannot obtain a Home Loan in 3 months, you could ask for a compassionate extension for the holidays that were in between. Most Sellers will agree
4. WHAT IF I CANT GET MY HOME LOAN SORTED IN 3 MONTHS ? THEN WHAT ?
You will have some options here :-
a) You may withdraw from the purchase but will loose ALL your Downpayment to the Seller
b) You may be given an extension which may be put in writing (like our case) to obtain a Home Loan from the Banks (we also had to pay a Differential Sum, a big one. Talk about how easy it is to get your First Home huh, watch out for the next topic, here's where even greater reality will kick in)
c) You may be given 1 month in addition to the 3 months to sort a Home Loan. However a daily rental rate will be agreed upon by the Sellers demand. In other words, after 3 months, if the Seller says every day I want 240 ringgit till you can get a home loan, thats what you will have to pay.
d) You may also try negotiating for the price of 240 ringgit example, for a period of 1 month
e) Consequently, after 3 + 1 months failing to obtain a Home Loan, your Downpayment money goes to the Seller
The daily rate will be stipulated anyway in your SPA. So read your SPA carefully.
So that's it folks. All is signed and well. Now the REAL fucking fun begins which is a nightmare in our current climate and where the biggest lies are fed.
Banks and Bank Loans. Get ready for some filthy truth of how banks will screw you over.
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