Property Hunter Magazine August Issue 2014 | Page 61

TIP 3: VALUATION
When you have found the property of your
choice, you are usually required to pay a
holding deposit of 2 – 3% of the purchase
price to take the property off the market.
However, making an offer and paying the
holding deposit does not necessarily equate
to acceptance. Until the Seller signs the
Letter of Offer, nothing is confirmed. Usual
conditions on the Booking Deposit receipts
(sometimes also known as the Letter of Offer
to Purchase) include:
• The Sale and Purchase Agreement (SPA) to
be signed within 14 working days from the
date of acceptance by the Seller. Extensions
on SPA signing are usually granted at the
Seller’s discretion.
• You, as the Buyer shall bear your own
portion of the Stamp duty and legal fees
incurred in relation to the execution of the
Sale and Purchase Agreement whilst the
Seller will also bear his or her own legal fees.
• The Offer to Purchase is subject to the
acceptance of the Seller and if and when it
is not accepted, the holding/earnest deposit
shall be refunded in full to the Buyer without
any interest and legal recourse.
As the buyer, you should always add in
a clause to say ‘Offer is subject to the
confirmation of the actual square footage
of the unit’ in the Offer Letter. Reason being
you don’t want to be caught out in a situation
whereby the agent tells you it is 1,200sf when
it is actually only 1,000sf, which would mean
you would be paying much more per square
feet. Your lawyers will then be able to confirm
this for you whilst in the process of drafting
the SPA. Before you pay the holding deposit
(also known as Earnest Deposit), make sure
you do the following two checks.
(a) Valuation of Property
If the price that you have agreed to pay
for the property is RM400,000, and you
are looking for a 90% loan from your bank,
you need to check with your bank that the
valuation is ‘up to mark’. Reason being, if the
banks’ valuers only values your property at
RM350,000, the bank will only be willing to
lend you 90% of RM350,000 and NOT 90%
of RM400,000. What this basically means is
that, if you really wanted to buy the property,
you will need to fork out the difference from
your own pocket i.e. RM85,000 [RM400,000
– (RM350,000 x 90%)] rather than RM40,000
that you ѡ