Today, I received a call from a client of mine. The story is like this.
Earlier, he was trying to buy a Double Storey in Puchong for about RM450,000. Due to, his history in credit payment, he was afraid to put a booking beforehand. So, he tried to apply with 1-2 banks for the loan. And the loan was approved.
So, when he tried to put a booking then. The owner had increase the price to RM480,000. Surprisingly, there is another buyer for this price. And he was very upset about this but there isn’t anything he can do about it.
So, now he is trying to buy another property. Is a town house villa in Puchong. The price given by the agent is RM280,000 for upper unit. The townhouse is a brand new one. So, I try to view internet for this particular property and so many advertisement on the net stated the price is ranging RM220k to RM260k . For RM280k will be way more expensive.
I called him back and try to highlight this to him. He said, he did notice about this. But, when he called the agents, (controls by a group of same agent) all of them are quoting this RM280k range. According to the agents, the property had gone up since they advertise. So, I was wondering this is really crazy sales! Properties are still selling at HOT Cakes!
The property are selling much higher than the internet price. Last trend was when we saw any price in internet, normally the price had been increased by the agent, and normally the bank valuation will be lower than the agent price because agents tend to increase the price.
My advice to all new property buyers please be careful when purchasing a house. If the bank valuation is lower than the price you purchase, you have to top up the different.
Please check out our simple example here:
Example 1:
Property Price : RM300,000
Bank’s valuation : RM250,000
Loan can apply : RM250,000 x 90% = RM225,000
Deposit need to pay to owner RM300,000-RM225,000 = RM75,000
In actual you only need to paid RM30k ( 10% of SPA) but due to bank valuation is lower, customer have to Top Up RM45k.
Example 2:
Property Price : RM300,000
Bank’s valuation : RM310,000
Loan can apply : RM300,000 x 90% = RM270,000
Deposit need to pay to owner RM30,000.
No top up required.
If this happen to you, this is good. Its show you are buying a cheaper property. By signing SPA you already gain gross profit RM10,000.
Example 3:
Property Price : RM300,000
Bank’s valuation : RM300,000
Loan can apply : RM300,000 x 90% = RM270,000
Deposit need to pay to owner RM30,000.
No top up required.
This is normal. You are not gaining or losing money.
If you yet to buy any property, I think now is a good time to buy before everything become more difficult and expensive.
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