How Long Does it Take to Sell a House in Malaysia?

Selling a house in Malaysia is not necessarily a long and complicated process. In this article, we will list in detail everything you need to do to ensure that potential buyers can be targeted, as well as the time frame required for each step. Before you are ready to sign a sale and purchase agreement (SPA) and officially transfer the property to the next owner, you will need to involve multiple parties. The entire process may take 6 months or more.

In light of the Covid-19 outbreak, Prime Minister Tan Sri Muhyiddin Yassin has introduced a number of incentives to help promote the real estate market and provide financial assistance to home buyers and homeowners. According to the Prime Minister’s announcement in a recent ERP briefing, Malaysians who sell their properties from June 1, 2020 to December 31, 2021 will not have to pay 5% RPGT tax. In addition, you should master the basic knowledge related to RPGT. The pardon is limited to 3 residential properties sold per person. Then how long does it take to sell a house exactly? We summarize the following steps.

1. Pay all the unpaid bills

Property tax

Withdrawal rent or unit rent for high-rise buildings is a kind of land tax, and all owners must pay to the local government through the land bureau of each continent or Pejabat Tanah Dan Galian (PTG) every year.

House tax

This is a tax paid to the local government based on the rental value of your house. The tax is calculated based on 4% of the rental value of your house and needs to include other relevant factors, such as the location and type of the house.

Management fee

If you own an apartment or condominium, you must pay all unpaid maintenance costs, which will be paid to the management committee and used to maintain and repair the common facilities in the stratified building.

Rental income tax

Although this is not a direct property tax, you will need to pay rental income tax when you file your income tax. The tax amount will vary depending on your status in Malaysia.

❖ Malaysian citizens and permanent residents should pay a rental income tax rate of about 0%-28%

❖ Foreigners and non-permanent residents are obliged to pay a rental income tax rate of 28%

Average time: The time required to clear these payments and collect the relevant receipts depends entirely on how often you perform your billing obligations. If you pay on time, you can complete this stage in one day.

2. Find an appraiser to assess the value of your house

Although there are several ways to assess the value of your real estate, such as checking with a real estate agent, asking a banker or browsing online real estate platforms, the best way is to hire a professional appraiser. The appraiser will be able to help you determine the appropriate selling price through market data, real estate types, similar real estate prices in surrounding areas, and other valuable market factors.

Make sure to hire an appraiser from an authorized company or an appraiser on behalf of the bank. We recommend that you first confirm that the appraiser or appraisal company is a qualified unit registered by The Board of Valuers, Appraisers and Estate Agents Malaysia (BOVEAP). Then, you can arrange an interview with the appraiser of your choice and arrange a time for them to visit your property for appraisal. Then, the valuer will prepare a report on the value of the property after evaluating your unit.

Average time: The whole process may take about 1 week to complete.

3. Set the sale price of the property

The price of your house depends largely on your personal goals as a seller-do you need cash now and sell quickly, or do you want to have the reserved power to wait for the right buyer who is willing to pay your ideal price? After making a decision, you should find out the following:

What is the current purchase intention in your area? Inquire about recent transactions of similar real estate types and building sizes near you-you can use brickz.my to do so. This online platform provides accurate selling prices and up-to-date pricing information for property transactions in Malaysia, which comes from the Appraisal and Property Services Department (JPPH).

How competitive is your industry? Browse real estate websites such as iProperty.com.my to find the highest and lowest prices of competitors in the market, so as to set competitive prices for your buyers. Taking into account the current buyer’s market, your asking price must reflect the market value of the property, and preferably lower than the market price of your competitors. Remember, you must take into account the negotiating profit on the sale price of the property. Buyers usually try to ask for a discount, so it is recommended that you add 5–10% more within the acceptable price range.

Average time: This ultimately depends on how long you spend researching and investigating. You should be able to complete the evaluation within a week.

4. Determine the goal to help you complete the transaction faster

Do you want a cash buyer?

Are you willing to sell properties to foreigners?

Do you want to focus on first-time buyers? (Because they can get higher financing profits from the bank)

Having buyer demographics will help you attract buyers and adopt effective strategies to ensure transactions — for example, if you are keen on first-time buyers, you can provide free fixtures and accessories (such as refrigerators or kitchen stoves).

Average time: It can be resolved within one day.

5. Complete indoor installations to increase the value of the property

In addition to basic repairs, you can also take the following actions:

Refresh paint

Please refurbish your cabinets and kitchen surfaces if they are out of date (after all, the kitchen is the core of the home!)

Replace every room with a new light fixture-resetting the new atmosphere is more important than anything else.

Organize the house, but don’t overdo it, so as not to look like a home.

Organize the garden, thoroughly clean the terrace and drains.

Average time: Depending on the effort you put into the work, it may take about 1–3 months to create a good first impression

6. Prepare the necessary documents

Latest bank loan records

ID card and passport

Please note that if your current passport number is different from the number stated in the house deed or purchase agreement, you must provide two copies of the passport.

Copy of Purchase Agreement

Copy of title deed

The latest land tax and house tax bills

Management expenses (latest 3 months)

Utilities (for the latest 3 months)

Average time: It depends on your personal speed. This is the preparation that can be completed in one day.

7. Find a reliable real estate broker/agent to sell the property

Ask about their performance or any evidence of past sales. It can be a booking form/notice, customer feedback, etc.

Once you have a broker, please hand over all the necessary documents mentioned above so that they can sell your property to potential customers.

Average time: It depends on how long it takes you to confirm the real estate agent, so please start as soon as possible. If the broker is regarded as a specialist in the area or industry type, this is definitely an advantage.

8. Find the right buyer and negotiate terms

Selling a house in a slow real estate market can be tricky; you have to work harder to close the deal. Generally, attractive discounts are not the key to speeding up transactions. Building strong relationships with your potential buyers and earning their trust is the springboard for successful sales. In most cases, the failure of the transaction is not because of the price of the property, but because the buyer is not satisfied; whether it is the seller, the service provided, or any troubles they face.

Average time: The negotiation process and the sale time depend on the time when the two parties can reach an agreement.

9. When you are ready to sell, consult a lawyer

You will need to provide the signed contract agreement, which is the first document that contains all the terms and agreements. Your lawyer will obtain a redemption statement from the bank and prepare all necessary legal documents to transfer the property ownership to the buyer.

Average time: The sale and purchase transaction will be completed approximately 3 months after signing the sale and purchase agreement.

10. Sign the agreement and charge the booking fee

Average time: from one week to one month-the process depends on the time you take to prepare the agreement and how quickly the bank processes the application.

11. Buyers apply for housing loans

When assessing the buyer’s loan application, the bank will usually send their appraiser to assess the value of your real estate and attach an appraisal report.

Average time: You have to wait 14 working days or more to know whether the bank will approve the buyer’s loan.

12. Sign the sale and purchase agreement (SPA)

This expenditure will be divided into two stages-in the first stage, the buyer’s bank will pay your bank (seller) to redeem the property. Then, your bank will issue all relevant documents (such as the genuine title deed of the real estate and the genuine sale and purchase agreement) to the buyer’s lawyer, who can then register the title deed under the buyer’s name and create a new mortgage. After sending the documents to the buyer, you will receive the second phase of payment.

Average time: Once your lawyer sends the documents to the buyer, the buyer will sign the SPA within 14–21 working days.

13. Real estate transfer period

Leasehold real estate with individual or stratified land deeds-The lawyer needs 1–3 months to obtain the consent to transfer from the state government, and the transfer process takes 90 working days.

The total property rights of the freehold-about 3 to 6 months, because the process is relatively more complicated. It depends on how long it takes your lawyer to get a confirmation from the developer before he can start the transfer. In some cases, this may be a long process because the developer has not yet subdivided the master title into individual or strata title and has not yet transferred the ownership of the property to you (the owner).

The total property rights of the leasehold: up to 6 to 12 months. The time required is doubled because the leasehold title requires the approval of the state government in addition to the developer’s approval (total property rights).

14. Summarize your transaction fees

This is the real estate profit tax that you get from the sale of your real estate. If you want to sell a property with six years of ownership (or later), you must pay 5% of RPGT. If you own the property for a short period of time, the tax rate you pay is also higher, that is, you have to pay 30% RPGT for the first three years of holding the property; 20% for the fourth year of sale, and 15% for the fifth year.

However, if this is the first time you have sold a residential property in Malaysia, you can enjoy the tax pardon for the sale benefit once in your life, so you do not need to pay any RPGT. Please note that it must be a private residence and you must be a Malaysian citizen.

Real estate broker/agent fees

The agency fee for residential properties is 3.18% of the selling price, including sales and service tax (SST).

Lawyer fee

The legal fees in Malaysia are as follows: According to the price of the property: the first RM500,000 (1%); the next RM500,000 (0.8%); the second is 2 million ringgits (0.7%) and the next 2 million ringgits (0.6%) ). Assuming your real estate price is RM800,000-you probably need to pay RM7,500.

Average time: It depends on the situation. If you are ready to pay, it will only take as little as 1 day.

The conclusion is that time must be considered when selling a house. If you want to sell at a high price, you must be prepared to wait longer. If immediate disposal is the priority, then you may have to accept the reserve price.

Originally published at https://www.tlw.com.

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