Planning to relocate to a new city and want to sell your home? Just like buying a new house, selling a house can be a daunting task. Every country has their own rules and regulations about house sales, you can expect some stringent rules in Malaysia as well. The whole property sale process right from finding a buyer to finalising the sale can go on for months. You can use the following guide to understand the real estate scenario in Malaysia so that you can sell your house without any hassle.
Bumiputera Lot Quota Regulation
Before getting into the regulation, you need to know who a Bumiputera is. Bumiputeras are Malays and other indigenous people from Indonesia, Brunei, and other areas of SouthEast Asia. The government wanted to implement policies to provide opportunities for this section of people. And that’s how the Bumiputera Lot Quota Regulation was passed.
This regulation was implemented as a part of the New Economic Policy in 1971. The aim of this regulation was to increase the number of Bumiputera shares to up to 30%. 'Bumi lots' are the plots of land that can be only bought by Bumiputeras. The Bumiputeras also enjoy a ‘Bumi discount’ of 15% of the property's initial price, depending on the area the property is situated.
Malay Reserved Lands
Malays Reserved Lands are the plots of land that can be owned by a Malay. These plots of land cannot be sold to a Non-Malay. In case the land has to be sold, another property of the same size and value must be given to the Malay as a replacement. The owners of the properties cannot rent out properties on Malay Reserved Lands to any Non-Malay. If there is a business operating in a Malay Reserved Land, it can only be owned and operated by a Malay.
The properties other than Bumiputera units and units coming under Malay Reserved Lands are all non-Bumiputera units. They don’t come with specific rules and regulations and can be bought and sold easily.
Sale of Land to Foreigners
There are some strict rules and regulations for foreigners to own properties in Malaysia. Though they can own anything from a terraced house to a bungalow, they can only invest in properties that are below RM1 million in value. They can neither buy Malay Reserved Lands nor Bumiputera plots and properties. Moreover, they won't be able to purchase low and medium cost property units which are defined by the state authority in the country.
The government introduced a scheme called Malaysia My Second Home (MM2H) for foreigners who will be living in Malaysia for at least 10 years. Those who apply for this scheme can get a high margin of financing (80%) and those who don't apply for this scheme will get lesser than 80% finance margin. If the foreigner is married to a Malaysian citizen, they can opt for loan financing and get a higher margin of financing of 90%. Currently, there is a project called the Forest City being developed in Johor which is a lucrative investment opportunity for foreigners in Malaysia.
What You Need to do Before Selling Your House
Now that you know have an idea about the various types of properties available in Malaysia, you need to look at ways how you can ensure you sell your house smoothly. Here are some tips you could use.
Understand Your Property and Estimate Its Worth
Find out what type of property you are living in. If you’re living in a Bumiputera plot or property, you can sell it only to a Bumiputera. Similarly, if you’re living in a Malay Reserved Land, you can only sell the plot to a Malay. However, if your property is neither situated on a Bumiputera unit nor on a Malay Reserved Land, you can find buyers easily.
In Malaysia, the prices of properties differ from region to region. A bungalow in Kuala Lumpur will cost you a lot more than a bungalow in a small town. Estimate the price of your property so that you can set a realistic price to sell it. If you own a huge mansion, which could be more than RM1 million, you shouldn’t be approaching foreigners for a sale, as they are not eligible to buy properties in that range.
Set a Price For Your Property
Just like the Forest City in Johor, there are many properties which are in the process of development in Malaysia. However, most of them come with high prices and there are high chances that people are looking for a used property, which is in good condition. That’s why you need to quote a realistic price to buyers. There are many online portals you can refer too to get an idea of the property price in your area. You can even get your property appraised by a certified real estate valuer to know how much it is worth.
Do All the Necessary Home Improvements
Not many people would want to buy a house which has plumbing problems and which has not been maintained properly. Before selling your property, do all the necessary home improvements to improve the aesthetic appeal of your home. Get necessary repairs done, paint the interior and exterior walls, and remove any bad wallpapering. Ensure that the toilets are clean and all the fixtures and fittings work well. Also, do a thorough check to fix any other problems.
Look Out for Buyers
With the advancement of technology, today you have many property portals that put up details of property sales and purchases. Posting an advertisement on these websites will only cost you a nominal fee and the response is great. You can also put up ads in the local newspaper or submit it to various property agencies.
Hire a Real Estate Agent
Not all are lucky when it comes to advertising their properties on their own. If you feel you are unable to market your property in the best possible way, you need to hire a real estate agent to quicken things up, especially if you are going to relocate to another city and want to sell your property before that.
Hire a Legal Advisor
If you are finding the whole process of property sale tiresome, you can hire a legal advisor. A legal advisor will be able to explain the entire process in a simple way, without using any jargon. They will also let you know what are the legalities involved during a property sale, how much taxes need to be paid, and how much paperwork needs to be done. A legal advisor will be able to prepare the sale deed for you by putting down all the terms and conditions you want, and they will ensure that the property is transferred to the other party smoothly. Hire an experienced lawyer who has good knowledge of the real estate business in Malaysia and who are aware of the latest property laws and regulations.
Keep Your Home Ready for Viewings
Once you put out an advert of your property, there will be a long list of interested buyers. Schedule a time and date for potential buyers to come and have a look around your home.
Negotiating the Quoted Price
Most buyers will try to negotiate so that they don’t have to spend much on the property. You need to be smart while negotiating, sticking to the price you had set earlier. However, if there is not a lot of buyers showing interest, you can quote a lesser amount.
Finalising a Buyer and Signing the Agreement
If you are handling the whole property sale on your own, you need to know that once you finalise a buyer you both need to sign the sale and purchase agreement. Discuss with your lawyer regarding the initial deposit amount the buyer has to pay and all the other legalities. The buyer should inform you how the payment will be made. If they have applied for a housing loan/financing, they should let you know the date the loan will be disbursed. Once you and the other party agree to all the terms and conditions, sign the agreement and other paperwork, and submit all the relevant documents, your property is successfully sold!
The real estate scenario in Malaysia is quite complex, given that there are laws and rules in place regarding different types of properties and plots of land. Nevertheless, it is not difficult to sell your house today. With the increasing population, especially expatriate population,, there is a growing need for properties at affordable prices.