By Mangalesri Chandrasekaran
When it comes to purchasing a house, many are unaware of the expenses that occur. When a new home is purchased from the developer, the buyer sometimes gets to enjoy rebate and discounts from the developer which helps to reduce the buyer’s burden.
However, things are quite different when it comes to acquiring subsale properties. So if you’re interested in acquiring a subsale abode and wondering roughly how much it will cost, fret not! We have the answer right here for you.
Let’s say you’re planning to purchase a subsale house which is priced at RM500,000; so what are the expenses that would incur during the home purchase?
1. Down Payment:
The first thing to purchase a subsale property is that you’ve to prepare a lump sum deposit of 10% to 30%. The bank will loan up to 90% financing for the purchase of first and second residential property, meanwhile, 70% loan for the third residential property onwards.
Hence, the buyer has to prepare between RM50,000 to RM150,000 cash for the down payment. The buyers who find it difficult to prepare a lump sum cash can opt to withdraw from their EPF 2nd account.
2. Sales and Purchase Agreement Legal fee:
In terms of SPA legal fees, 1% will be charged from the first RM150,000; 0.7% will be charged from the remaining RM1 million; 0.6% will be charged for the subsequent RM3 million.
Meanwhile, for property stamp duty, 1% will be charged from the first RM100,000; 2% will be charged from the subsequent RM500,000 and 3% will be charged for the remaining value.
The professional legal fee is also subject to 6% government tax and approximately RM1,000 to RM1,500 disbursement fee (estimation).
There are also 50% rebate on stamp duty for first time home buyers if your property price is less than RM500,000.
3. Loan Agreement Legal Fee:
For the property stamp duty, 0.5% will be charged from the total loan amount. Other than that, the professional legal fees, government tax on the legal fees, disbursement fees (estimated) and the stamp duty rebate for first time home buyers are similar to the charges above-mentioned in the Sales and Purchase Agreement Legal fees.
Sometimes these fees can be absorbed into the loan financing by the bank. However, this might result in a higher interest rate.
4. Valuation Fee:
When purchasing a subsale property, a formal valuation report will be submitted to the financing bank. This fee costs about 0.3% of the property value.
5. Bank Processing Fee:
When applying for a mortgage loan, banks will charge a one-time processing fee which will cost between RM50 to RM200.
See the infographic below to get a clearer picture of the upfront expenses that occurs while purchasing a home:
Mangalesri Chandrasekaran, Editor at PropertyGuru, edited this story. To contact her about this or other stories email mangales@propertyguru.com.my
