The most usual way to sell a property is through estate agents. Some sellers choose to market their properties privately to save on the estate agents’ commission but this solution has the following disadvantages:
- it can be very time-consuming as you will have to do all the work yourself, including advertising and showing the property to prospective buyers
- it may take longer to sell your house as you are likely to get fewer viewings than by letting professionals market your property
- you may end up selling at a lower price as you are likely to get fewer viewings and therefore less interest in your property.
Selecting estate agents
Use several agents to market your property as this will result in your property being more widely advertised. You will only pay commission to the agent who actually sells the property so using several agents will not result in higher costs. Howevever using too many agents, say over 5, may discourage the agents from working hard on the property as they may feel they are unlikely to be the ones who will be selling your property. Select estate agents who specialise in your area or property type as their client list will have the right prospective buyers for your property.
The easiest way to find suitable estate agents is to look at advertisements for similar properties on websites like www.thinkproperty.my or in the printed press (like the Star Classifieds or property magazines) and contact the agent. Or drive around your area and look for agents’ signboards on properties for sale.
Help the agent help you
When giving your property details to the agent emphasise your property’s individual selling points. Think about any positives, from a large kitchen to an alarm system, or a good school nearby.
If possible, take digital photos of your property which the agent can then send to prospective buyers or use in advertisements.
Selling costs
Estate agents' commission:
2.75% on the first RM500,000 of the property’s selling price
2% on any amount over RM500,000.
Property Sale & Purchase Legal fees:
1% on the first RM100,0000 of the property's selling price
0.5% on the next RM4,800,000
0.25% on any amount over RMRM4,900,000
This is subject to a minimum fee of RM200.
Some sellers do not instruct a lawyer and therefore save on the legal fees. This is possible because the buyer’s lawyer will draft the Sale and Purchase Agreement. However, not using a lawyer is not recommended unless you really know what you are doing. The Sale & Purchase agreement may seem simple enough to read but you will be surprised how often your lawyer will point out something that you would not have noticed that could have a material impact.
Early redemption penalty:
Before selling, check your mortgage policy to determine whether any penalty for early redemption may be applicable.
Real Property Gains Tax:
Real Property Gains Tax was abolished in April 2007, so there will be no tax on your property gains.
Sunday, August 30, 2009
Saturday, August 29, 2009
Setting Your Asking Price
The value of your property is ultimately the price buyers are prepared to pay for it.
How to value your property?
Estate agents will value your property for free in order to get the opportunity to market your property. Make sure your property is looking its best before valuation to get the highest possible price estimate. Be aware that some agents may give you a high valuation in the hope that you will market the property through them, but overpricing may result in lack of interest from prospective buyers. Other agents may give you a low valuation so they can sell the property quickly. By talking to a few agents you should get a fair idea of what your property is worth.
You may also want to view a few similar properties in your area in order to get an idea of how much your property should sell for.
Determine your asking price
The asking price will normally be the highest price you expect someone to pay for your property. The asking price is usually negotiable and sellers will normally settle for an amount below the asking price, unless there is a lot of interest in their property in which case they may sell for the asking price or even above the asking price. Broadly speaking, if you wish to sell within a few months, you should set your asking price around 5% higher than the price you would accept. Most buyers will want to knock down your price to feel they are getting a good deal, but if you go over 5% they may be put off by the high asking price. Your asking price will depend on your circumstances – a seller hoping for a quick sale will set their asking price at a lower level than a seller with greater holding power. You may also decide to revise your asking price after viewings have started – if the property is not generating any interest it may be best to lower the asking price, as a property which has been on the market for a long time becomes even less desirable to buyers who start wondering why no-one has bought the property for so long.
How to value your property?
Estate agents will value your property for free in order to get the opportunity to market your property. Make sure your property is looking its best before valuation to get the highest possible price estimate. Be aware that some agents may give you a high valuation in the hope that you will market the property through them, but overpricing may result in lack of interest from prospective buyers. Other agents may give you a low valuation so they can sell the property quickly. By talking to a few agents you should get a fair idea of what your property is worth.
You may also want to view a few similar properties in your area in order to get an idea of how much your property should sell for.
Determine your asking price
The asking price will normally be the highest price you expect someone to pay for your property. The asking price is usually negotiable and sellers will normally settle for an amount below the asking price, unless there is a lot of interest in their property in which case they may sell for the asking price or even above the asking price. Broadly speaking, if you wish to sell within a few months, you should set your asking price around 5% higher than the price you would accept. Most buyers will want to knock down your price to feel they are getting a good deal, but if you go over 5% they may be put off by the high asking price. Your asking price will depend on your circumstances – a seller hoping for a quick sale will set their asking price at a lower level than a seller with greater holding power. You may also decide to revise your asking price after viewings have started – if the property is not generating any interest it may be best to lower the asking price, as a property which has been on the market for a long time becomes even less desirable to buyers who start wondering why no-one has bought the property for so long.
Friday, August 28, 2009
Negotiations When Selling
A buyer is interested in your property and has made an offer through the agent who showed him your property. First of all make sure you find out from the agent what precisely the buyer expects to be included in the price he is offering in order to avoid any misunderstandings (eg, furniture). You now have the choice of accepting the offer, or rejecting it and possibly making a counter-offer or just sticking to your asking price.
The seller’s position
What you decide will depend on your circumstances at the time you receive the offer:
- Are several buyers interested in the property and can you realistically expect a higher offer?
- Has the property been on the market for a long time without generating much interest? Is your asking price realistic?
- Are you in a rush to sell your property?
The buyer’s position
Be aware that many buyers make offers which are lower than the price they are prepared to pay for the property, to start off negotiations. Talk to the agent to get an idea of the buyer’s circumstances (are they interested in other properties? what is their budget? Are they a cash buyer? Are they foreign as they will need to get state authority consent?)
The agent’s position
The agent works for the seller. He is paid by commission as a percentage of the selling price so he has an interest in obtaining as high a price as possible for the property. The agent should know the market inside out so it is worth listening to his advice. However do be aware that he also has an interest in making the sale happen, even at a lower price, rather than not happen at all.
The seller’s position
What you decide will depend on your circumstances at the time you receive the offer:
- Are several buyers interested in the property and can you realistically expect a higher offer?
- Has the property been on the market for a long time without generating much interest? Is your asking price realistic?
- Are you in a rush to sell your property?
The buyer’s position
Be aware that many buyers make offers which are lower than the price they are prepared to pay for the property, to start off negotiations. Talk to the agent to get an idea of the buyer’s circumstances (are they interested in other properties? what is their budget? Are they a cash buyer? Are they foreign as they will need to get state authority consent?)
The agent’s position
The agent works for the seller. He is paid by commission as a percentage of the selling price so he has an interest in obtaining as high a price as possible for the property. The agent should know the market inside out so it is worth listening to his advice. However do be aware that he also has an interest in making the sale happen, even at a lower price, rather than not happen at all.
Thursday, August 27, 2009
Showing Your Property
The estate agents you have instructed will market your property and arrange with you a convenient time for prospective buyers to see the property. You may choose to be present during viewings or let the agent show the property on their own. For the first few viewing try to be at the property to pick up any feedback from the prospective buyers. Generally prospective buyers feel more at ease viewing the property without the owner being present but by being present you would have the opportunity to address any concerns the buyer may have about your property. So it can be both negative and positive to be at the viewing. What is more important is that you make it very easy for an estate agent to view a property. Agents and prospective buyers will usually have so many different properties that any delays from the seller can mean the viewing will not take place.
Presentation
Before allowing any prospective buyers in your property, and even before allowing estate agents in for valuation, you need to consider how best to present your property in order to optimise the potential of your property.
A few simple steps can greatly enhance the value of your property:
- clean up: remove all clutter, make sure your property is sparkling clean and smells fresh and pleasant
- ensure comfortable viewing: switch on the aircons or fans before viewings; also switch all the lights on before viewings so the rooms are full of light
- time for repairs: fix any leaks, creaky doors and jammed windows
- decorate: plants and pictures are easy ways to enhance the look of your property
- don’t forget the outside: first impressions count so tidy the front of your property; a beautifully
-landscaped garden can also add much to the value of a property.
The biggest mistake that sellers make when selling a property is take the attitude that the prospective buyer will not care if the place is presented poorly as they will clean and tidy up once they own the property. Nearly all prospective buyers do not have the ability to visualise how a poorly-presented property would look if it was well-presented. If they see a poorly-presented house, no matter how good the potential of the house, they will remember the house with negative thoughts, and will be unlikely to buy the property.
Presentation
Before allowing any prospective buyers in your property, and even before allowing estate agents in for valuation, you need to consider how best to present your property in order to optimise the potential of your property.
A few simple steps can greatly enhance the value of your property:
- clean up: remove all clutter, make sure your property is sparkling clean and smells fresh and pleasant
- ensure comfortable viewing: switch on the aircons or fans before viewings; also switch all the lights on before viewings so the rooms are full of light
- time for repairs: fix any leaks, creaky doors and jammed windows
- decorate: plants and pictures are easy ways to enhance the look of your property
- don’t forget the outside: first impressions count so tidy the front of your property; a beautifully
-landscaped garden can also add much to the value of a property.
The biggest mistake that sellers make when selling a property is take the attitude that the prospective buyer will not care if the place is presented poorly as they will clean and tidy up once they own the property. Nearly all prospective buyers do not have the ability to visualise how a poorly-presented property would look if it was well-presented. If they see a poorly-presented house, no matter how good the potential of the house, they will remember the house with negative thoughts, and will be unlikely to buy the property.
Wednesday, August 26, 2009
The Sale Process
You have accepted the buyer’s offer, but this is the just the start of a process which typically takes around 3 months. Your lawyer, if you choose to use one, should keep you informed of the progress of the transaction and protect your interests at every stage, but here is a quick guide to the legal steps which are likely to follow your verbal acceptance of the buyer's offer:
- letter of offer: you will sign the letter of offer previously signed by the buyer and accept the buyer’s deposit (this is typically 2% of the property price and can also be kept by the estate agent as stakeholder until the Sale and Purchase Agreement (S&P) has been signed) – the letter of offer gives a timeframe for the transaction including when the S&P should be agreed and signed (usually about 3 weeks after the letter of offer has been signed)
- S&P: the S&P will be drafted by the buyer’s lawyer and give the details for the transfer and specify any warranties; on signing you should receive a deposit of 10% of the purchase price less the amount of deposit given at the letter of offer stage
- state authority consent: this only applies to transfers of leasehold land or if a foreign buyer is involved and it can take from 6 weeks to 3 months depending on the state. KL (DBKL) is usually the the quickest
- completion: completion will usually take place within 3 months of the S&P (or state authority consent if applicable) but may be faster if a cash buyer is involved; you should now receive the balance 90% of the selling price less any mortgage balance paid to your lender.
- letter of offer: you will sign the letter of offer previously signed by the buyer and accept the buyer’s deposit (this is typically 2% of the property price and can also be kept by the estate agent as stakeholder until the Sale and Purchase Agreement (S&P) has been signed) – the letter of offer gives a timeframe for the transaction including when the S&P should be agreed and signed (usually about 3 weeks after the letter of offer has been signed)
- S&P: the S&P will be drafted by the buyer’s lawyer and give the details for the transfer and specify any warranties; on signing you should receive a deposit of 10% of the purchase price less the amount of deposit given at the letter of offer stage
- state authority consent: this only applies to transfers of leasehold land or if a foreign buyer is involved and it can take from 6 weeks to 3 months depending on the state. KL (DBKL) is usually the the quickest
- completion: completion will usually take place within 3 months of the S&P (or state authority consent if applicable) but may be faster if a cash buyer is involved; you should now receive the balance 90% of the selling price less any mortgage balance paid to your lender.
Monday, August 24, 2009
Adding Value To Your Home Through Renovation
Property renovation is not easy. It requires patience and hard work, but if done well the rewards are fantastic. We ask Isabelle Sterboul, Director of AIQ Global, a group that buys old properties in prime areas of KL, renovates them, and then sells or rents them, for some of her ideas on how to make sure your renovation adds value to your home.
Bounce off agents any ideas you have, particularly if you are renovating to sell. Don't be arrogant and assume you know it all - listen to them carefully. Agents, even ones with two or three years experience, know what you need to do to make a property sellable, as they are the ones selling them all day - they meet buyers very frequently and listen into their complaints and compliments. They are a valuable source of knowledge - and they'll always give advice for free.
Use an architect. Unless the changes that you wish to make are purely cosmetic (like painting, re-tiling, etc...) ensure that you use the services of a registered architect. The architect will make sure that your renovation complies with the governing by-laws and that you obtain all necessary approvals before work begins. Without the necessary approvals you risk having lots of problems later on, and it's not worth the headache. The local authorities may give you a stop order, you will get fined, and you may find it difficult to sell the property.
Make sure that your design allows for plenty of light into your house, and try to give the house an open feel. Large windows and open plan concepts will both add value to your house.
Apply for planning and building permission before you acquire the property. This will increase the return on your project by saving you interest costs and shorten your turn around period, or if you are buying for your own stay it will mean you can move in earlier which will save on interest costs.
Hire sub-contractors directly if you have time. By doing so you will save the costs of the middle-man - your main contractor. Typically a main contractor will mark-up any sub-contractor prices by around 10%. But if you don't have time this 10% is certainly worth it - hiring a tiler, an alarm specialist, a plumber, an electrician, negotiating with all of them, and then making sure their work is good is not easy - and having one person to complain about anything is a positive
Have written and signed agreements with your contractor(s). Not doing so is a recipe for disputes. State the time the work must be finished by and put penalties for late completion. If you don't put penalties explicitly in your contract, expect your work to be delayed.
Make progress payments in small increments as the work is being done. Avoid having a scenario where the contractor could be tempted to just run off with your money. Always make sure the contractor is incentivised to continue to work. However you must be reasonable too. Some work involves a significant cost upfront for the contractor. For example if you're buying items like custom made wardrobes clearly the contractor would be at risk if you paid him/her after the wardrobes were made - he/she would need a fairly large deposit for them to feel comfortable placing a big order.
Visit the property at least once a day. It means if you are not happy with something there's enough time to make amendments without a significant cost. It will also keep the workers on the ball.
Be fussy on the quality of the finish. If you do not complain about poor quality work, no-one else will. Go around the house constantly looking for anything to complain about. The more you complain, to a point, the more the contractors will ensure their work is of a high quality. Go around with a big red market pen pointing out any defects, and do not hesitate to use it.
Focus on the bathrooms and the kitchen. These areas determine, more than any other, whether a property feels modern. A great kitchen will often tempt the women, and they're usually the ones that make the decisions! Also, the master bedroom is important as this is the room where, typically, the purchaser of the house will sleep.
Take into account fung shui, even if you don't subscribe to it yourself. Others do, and that matters, particularly in Chinese areas.
Choose neutral colours and unless you are experienced do not be bold with your designs. If you keep it simple that is usually best. Any bold statements can come though the furniture, which can always be removed if they do not work well.
Bounce off agents any ideas you have, particularly if you are renovating to sell. Don't be arrogant and assume you know it all - listen to them carefully. Agents, even ones with two or three years experience, know what you need to do to make a property sellable, as they are the ones selling them all day - they meet buyers very frequently and listen into their complaints and compliments. They are a valuable source of knowledge - and they'll always give advice for free.
Use an architect. Unless the changes that you wish to make are purely cosmetic (like painting, re-tiling, etc...) ensure that you use the services of a registered architect. The architect will make sure that your renovation complies with the governing by-laws and that you obtain all necessary approvals before work begins. Without the necessary approvals you risk having lots of problems later on, and it's not worth the headache. The local authorities may give you a stop order, you will get fined, and you may find it difficult to sell the property.
Make sure that your design allows for plenty of light into your house, and try to give the house an open feel. Large windows and open plan concepts will both add value to your house.
Apply for planning and building permission before you acquire the property. This will increase the return on your project by saving you interest costs and shorten your turn around period, or if you are buying for your own stay it will mean you can move in earlier which will save on interest costs.
Hire sub-contractors directly if you have time. By doing so you will save the costs of the middle-man - your main contractor. Typically a main contractor will mark-up any sub-contractor prices by around 10%. But if you don't have time this 10% is certainly worth it - hiring a tiler, an alarm specialist, a plumber, an electrician, negotiating with all of them, and then making sure their work is good is not easy - and having one person to complain about anything is a positive
Have written and signed agreements with your contractor(s). Not doing so is a recipe for disputes. State the time the work must be finished by and put penalties for late completion. If you don't put penalties explicitly in your contract, expect your work to be delayed.
Make progress payments in small increments as the work is being done. Avoid having a scenario where the contractor could be tempted to just run off with your money. Always make sure the contractor is incentivised to continue to work. However you must be reasonable too. Some work involves a significant cost upfront for the contractor. For example if you're buying items like custom made wardrobes clearly the contractor would be at risk if you paid him/her after the wardrobes were made - he/she would need a fairly large deposit for them to feel comfortable placing a big order.
Visit the property at least once a day. It means if you are not happy with something there's enough time to make amendments without a significant cost. It will also keep the workers on the ball.
Be fussy on the quality of the finish. If you do not complain about poor quality work, no-one else will. Go around the house constantly looking for anything to complain about. The more you complain, to a point, the more the contractors will ensure their work is of a high quality. Go around with a big red market pen pointing out any defects, and do not hesitate to use it.
Focus on the bathrooms and the kitchen. These areas determine, more than any other, whether a property feels modern. A great kitchen will often tempt the women, and they're usually the ones that make the decisions! Also, the master bedroom is important as this is the room where, typically, the purchaser of the house will sleep.
Take into account fung shui, even if you don't subscribe to it yourself. Others do, and that matters, particularly in Chinese areas.
Choose neutral colours and unless you are experienced do not be bold with your designs. If you keep it simple that is usually best. Any bold statements can come though the furniture, which can always be removed if they do not work well.
Renting Guide For Tenants
Determine your requirements
Whether you look for property online or through an estate agent, having a precise idea of your requirements will greatly assist in finding your ideal place to stay. The main criteria are:
- budget
- location
- type of property
- property size
- duration of tenancy
- furnished or unfurnished
Budget
The monthly rental is commonly featured on advertisements as rental payments to the landlord are usually made monthly. In addition to the monthly rent you will need to ensure that you can afford the initial deposits (normally 3½ months’ rent). A small stamp duty fee on the tenancy agreement is also payable by the tenant if the rent exceeds RM2,400.
Location
Location is critical to your decision so get to know the area properly before renting. The following considerations will affect your choice of location:
- proximity and access to work
- proximity and access to schools
- amenities including shopping, leisure, religious facilities, parks
- safety
- prestige
Type of property
The main distinction is between landed and non-landed property. Landed properties include detached, semi-detached, and link houses. Non-landed include condominium units and flats. Rooms are also available to let in private homes.
Also will you only settle for a modern property or are you content with something more basic?
Property size
Make a checklist of your requirements:
- land area- built up area
- number of bedrooms
- number of bathrooms
- reception rooms
- size of kitchen
Duration of tenancy
The normal tenancy term is 12 months for locals and 2 years for expats. However it is up to you to negotiate with the landlord for a term which suits your requirements. Be aware that landlords will usually expect a higher monthly rent for shorter terms. The tenancy agreement may stipulate that the tenancy will continue if notice is not given at the end of the term.
Furnished or unfurnished
Whether you rent a place furnished or unfurnished will depend on whether you already own or intend to buy furniture. Expats on a short-term assignment may prefer to rent a furnished place as this is the more convenient and usually cheaper option. Rented accommodation will feel more like home if you furnish it according to your own taste.
Arrange viewings
The main way of finding properties to view is to look through property advertisements either on the internet (on websites such as http://www.thinkproperty.com.my/) or the printed press (such as the Star Classifieds or specialist property magazines).
Another way of finding properties to view is to drive through the area where you want to buy and look for any properties for rent as advertised by the estate agent’s board placed at the front of the property.
Identify suitable properties and call the numbers featured on the advertisements. Very few landlords advertise their properties directly – normally the person you contact will be an estate agent marketing the property on behalf of the landlord. Find out more details from the agent about the property advertised and arrange a time for viewing if the property fits your requirements. Tell the agent your requirements and find out whether the agent has any other properties on their books which may be suitable. Make sure you let the agent know your essential requirements so you don’t waste your time viewing unsuitable properties.
Estate agents get paid by commission from the landlord on renting the property. The buyer does not pay the estate agent. Use several agents to show you properties – if you rely on only one agent you will be unable to determine whether the properties on his book are fairly priced compared to other properties on the rental market.
During viewings, write down the property details and your impressions of the properties. Take photos if the owner allows you to. This will help you compare properties and remind you of the properties you have seen. It is all too easy getting confused between different properties if you do a lot of viewings.
Create a shortlist of suitable properties and arrange second viewings. Take your time during second viewings and scrutinise the property. Don’t hesitate to open windows, sliding doors, taps, etc to ascertain whether they are in good working order. A property in bad working order is an indication that the landlord is unwilling to carry out appropriate repairs. If the place is furnished find out which furniture comes with the property as some or all of the furniture may belong to the current tenant. Are the appliances (fans, oven, washing machine) good quality? Check the brand names.
Make an offer
You have now found the ideal place to live and would like to make an offer. What offer should you give? The price you offer will take into account the following considerations:
- the asking price: a landlord’s asking price is usually higher than the price they will actually settle for - talk to the agent to get a feel for what the landlord realistically wants
- rentals for similar properties: this will give you a feel for what the market rent should be, especially where condominiums are concerned- the landlord’s circumstances:
- the landlord may be keen to rent his property to meet the financing costs
- the rent you are prepared to pay for the property: this will depend on your budget, how much you like the property and whether you are considering other properties
- interest in the property: if the property has been on the market for a long time without much interest the seller will be more negotiable than if several buyers are showing interest
- previous rejected offers: previous offers rejected by the landlord may give an indication of the rent the landlord is looking for – however the landlord’s circumstances may have changed and he might accept an offer he previously rejected
If you have been using an agent you should make your offer through the agent who showed you the property. When making an offer indicate clearly what you expect to be included in the property (eg, furniture, dishwasher) to avoid any misunderstandings. Also make sure you emphasize your positive points as a tenant so the landlord is more likely to be swayed by your offer (eg, employment credentials, rent paid by company). You may also offer for a third party to guarantee your rent (eg, parents).
The landlord will then either accept, reject or give a counter-offer, and negotiations will continue until a rent is agreed or they fall through.
The rental agreementOnce the rent is agreed between you and the landlord, you will be expected to pay the first month’s rent to the landlord to confirm the deal. On signing the rental agreement you will pay 3½ months’ rent to cover for the security and utilities deposits.
The rental agreement will typically feature the landlord’s and tenant’s particulars, the address of the property, the agreed rent, the term and commencement date, as well as the tenant’s and landlord’s covenants.
The tenant normally covenants to, inter alia, pay the rent, not cause a nuisance, keep the property in good condition, allow the landlord to show the property to prospective buyers or tenants.
The landlord normally covenants to, inter alia, carry out any repairs notified by the tenant, take out fire insurance, allow the tenant to peaceably occupy the property.
If the tenant is an expatriate, the rental agreement may contain an expatriate clause specifying that the tenant may end the agreement if he is transferred to another location. Other clauses may be negotiated with the landlord, including the right to end the agreement if a development starts near the property. The agreement will also stipulate what is to happen at the end of the term, eg tenant to give notice to end or renew the tenancy.
The tenancy agreement also often includes the inventory for the property. Before signing the inventory, make sure that all the items included are actually present in the property and write down on the inventory any defects to the property or furniture to avoid any dispute at the end of the tenancy. You may also want to take pictures when you move in to avoid any dispute as to whether any defects were already present when you moved in.
Leaving the property at the end of the tenancy
Your tenancy is coming to an end and you do not wish to renew the tenancy. Make sure you check your rental agreement to determine whether you need to give notice to the landlord that you wish to terminate the tenancy. Give proper notice as specified in the agreement.
When leaving, go through the inventory to ensure you are leaving the property as you got it at the start of the tenancy; otherwise the landlord may be entitled to keep part or all of your deposit. Also ensure that you pay all outstanding bills you are responsible for as failing to do so may entitle the landlord to keep your utilities deposit.
Whether you look for property online or through an estate agent, having a precise idea of your requirements will greatly assist in finding your ideal place to stay. The main criteria are:
- budget
- location
- type of property
- property size
- duration of tenancy
- furnished or unfurnished
Budget
The monthly rental is commonly featured on advertisements as rental payments to the landlord are usually made monthly. In addition to the monthly rent you will need to ensure that you can afford the initial deposits (normally 3½ months’ rent). A small stamp duty fee on the tenancy agreement is also payable by the tenant if the rent exceeds RM2,400.
Location
Location is critical to your decision so get to know the area properly before renting. The following considerations will affect your choice of location:
- proximity and access to work
- proximity and access to schools
- amenities including shopping, leisure, religious facilities, parks
- safety
- prestige
Type of property
The main distinction is between landed and non-landed property. Landed properties include detached, semi-detached, and link houses. Non-landed include condominium units and flats. Rooms are also available to let in private homes.
Also will you only settle for a modern property or are you content with something more basic?
Property size
Make a checklist of your requirements:
- land area- built up area
- number of bedrooms
- number of bathrooms
- reception rooms
- size of kitchen
Duration of tenancy
The normal tenancy term is 12 months for locals and 2 years for expats. However it is up to you to negotiate with the landlord for a term which suits your requirements. Be aware that landlords will usually expect a higher monthly rent for shorter terms. The tenancy agreement may stipulate that the tenancy will continue if notice is not given at the end of the term.
Furnished or unfurnished
Whether you rent a place furnished or unfurnished will depend on whether you already own or intend to buy furniture. Expats on a short-term assignment may prefer to rent a furnished place as this is the more convenient and usually cheaper option. Rented accommodation will feel more like home if you furnish it according to your own taste.
Arrange viewings
The main way of finding properties to view is to look through property advertisements either on the internet (on websites such as http://www.thinkproperty.com.my/) or the printed press (such as the Star Classifieds or specialist property magazines).
Another way of finding properties to view is to drive through the area where you want to buy and look for any properties for rent as advertised by the estate agent’s board placed at the front of the property.
Identify suitable properties and call the numbers featured on the advertisements. Very few landlords advertise their properties directly – normally the person you contact will be an estate agent marketing the property on behalf of the landlord. Find out more details from the agent about the property advertised and arrange a time for viewing if the property fits your requirements. Tell the agent your requirements and find out whether the agent has any other properties on their books which may be suitable. Make sure you let the agent know your essential requirements so you don’t waste your time viewing unsuitable properties.
Estate agents get paid by commission from the landlord on renting the property. The buyer does not pay the estate agent. Use several agents to show you properties – if you rely on only one agent you will be unable to determine whether the properties on his book are fairly priced compared to other properties on the rental market.
During viewings, write down the property details and your impressions of the properties. Take photos if the owner allows you to. This will help you compare properties and remind you of the properties you have seen. It is all too easy getting confused between different properties if you do a lot of viewings.
Create a shortlist of suitable properties and arrange second viewings. Take your time during second viewings and scrutinise the property. Don’t hesitate to open windows, sliding doors, taps, etc to ascertain whether they are in good working order. A property in bad working order is an indication that the landlord is unwilling to carry out appropriate repairs. If the place is furnished find out which furniture comes with the property as some or all of the furniture may belong to the current tenant. Are the appliances (fans, oven, washing machine) good quality? Check the brand names.
Make an offer
You have now found the ideal place to live and would like to make an offer. What offer should you give? The price you offer will take into account the following considerations:
- the asking price: a landlord’s asking price is usually higher than the price they will actually settle for - talk to the agent to get a feel for what the landlord realistically wants
- rentals for similar properties: this will give you a feel for what the market rent should be, especially where condominiums are concerned- the landlord’s circumstances:
- the landlord may be keen to rent his property to meet the financing costs
- the rent you are prepared to pay for the property: this will depend on your budget, how much you like the property and whether you are considering other properties
- interest in the property: if the property has been on the market for a long time without much interest the seller will be more negotiable than if several buyers are showing interest
- previous rejected offers: previous offers rejected by the landlord may give an indication of the rent the landlord is looking for – however the landlord’s circumstances may have changed and he might accept an offer he previously rejected
If you have been using an agent you should make your offer through the agent who showed you the property. When making an offer indicate clearly what you expect to be included in the property (eg, furniture, dishwasher) to avoid any misunderstandings. Also make sure you emphasize your positive points as a tenant so the landlord is more likely to be swayed by your offer (eg, employment credentials, rent paid by company). You may also offer for a third party to guarantee your rent (eg, parents).
The landlord will then either accept, reject or give a counter-offer, and negotiations will continue until a rent is agreed or they fall through.
The rental agreementOnce the rent is agreed between you and the landlord, you will be expected to pay the first month’s rent to the landlord to confirm the deal. On signing the rental agreement you will pay 3½ months’ rent to cover for the security and utilities deposits.
The rental agreement will typically feature the landlord’s and tenant’s particulars, the address of the property, the agreed rent, the term and commencement date, as well as the tenant’s and landlord’s covenants.
The tenant normally covenants to, inter alia, pay the rent, not cause a nuisance, keep the property in good condition, allow the landlord to show the property to prospective buyers or tenants.
The landlord normally covenants to, inter alia, carry out any repairs notified by the tenant, take out fire insurance, allow the tenant to peaceably occupy the property.
If the tenant is an expatriate, the rental agreement may contain an expatriate clause specifying that the tenant may end the agreement if he is transferred to another location. Other clauses may be negotiated with the landlord, including the right to end the agreement if a development starts near the property. The agreement will also stipulate what is to happen at the end of the term, eg tenant to give notice to end or renew the tenancy.
The tenancy agreement also often includes the inventory for the property. Before signing the inventory, make sure that all the items included are actually present in the property and write down on the inventory any defects to the property or furniture to avoid any dispute at the end of the tenancy. You may also want to take pictures when you move in to avoid any dispute as to whether any defects were already present when you moved in.
Leaving the property at the end of the tenancy
Your tenancy is coming to an end and you do not wish to renew the tenancy. Make sure you check your rental agreement to determine whether you need to give notice to the landlord that you wish to terminate the tenancy. Give proper notice as specified in the agreement.
When leaving, go through the inventory to ensure you are leaving the property as you got it at the start of the tenancy; otherwise the landlord may be entitled to keep part or all of your deposit. Also ensure that you pay all outstanding bills you are responsible for as failing to do so may entitle the landlord to keep your utilities deposit.
Sunday, August 23, 2009
Renting Guide For Landlords
How To Rent Your Property
The most usual way to rent a property is through estate agents. Some landlords choose to market their properties privately to save on the estate agents’ commission but this solution has the following disadvantages:
- it can be very time-consuming as you will have to do all the work yourself, including advertising and showing the property to prospective tenants
- it may take longer to rent your house as you are likely to get fewer viewings than by letting professionals market your property- you may end up getting a lower rent as you are likely to get fewer viewings and therefore less interest in your property.
Selecting estate agents
Use several agents to market your property as this will result in your property being more widely advertised. You will only pay commission to the agent who actually rents the property so using as many agents as possible will not result in higher costs. Select estate agents who specialise in your area or property type as their client list will have the right prospective tenants for your property.
The easiest way to find suitable estate agents is to look at advertisements for similar properties on thinkproperty.my and contact the agent. Or drive around your area and look for agents’ signboards on properties for rent.
Help the agent help you
When giving your property details to the agent emphasise your property’s individual selling points. Think about any positives, from a large kitchen to an alarm system, or a good school nearby.If possible, take digital photos of your property which the agent can then send to prospective tenants or use in advertisements.
Renting costs
Estate agents charge 1 month’s rent as commission for renting a property.The small stamp duty fee on the rental agreement for rents exceeding RM2,400 is payable by the tenant.
Renting furnished, part-furnished or unfurnished?
Most tenants will require at least a part-furnished place, ie including such items as kitchen cabinets and curtains as these are specific to a property and tenants are generally unwilling to incur costs when they will be unable to take the items with them when they leave.
Advantages of renting a place without furniture:
- no hassle of having to buy furniture
- no initial capital outlay- many tenants prefer part
- furnished accommodation as they already have or intend to buy their own furniture
- tenants are unlikely to look after furniture which does not belong to them, although the deposit can be kept back by the landlord in case of damage
Advantages of renting a place fully-furnished:
- tenants who are looking for fully-furnished accommodation will pay a premium for the convenience of renting a fully-furnished place
- good furniture will make your property look much better than if it is left unfurnished and could thus potentially be rented quicker and for a higher rent
Determine your asking rent
How to determine market rent?
Estate agents will advise you on how much rent you can expect for your property. Be aware that some agents may give you a high expected rent in the hope that you will market the property through them, but overpricing may result in lack of interest from prospective tenants.
You may also want to view a few similar properties in your area in order to get an idea of how much your property should rent for.The following properties usually rent at a premium:
- modern properties
- beautifully-furnished properties
- properties in areas favoured by expatriates (eg, Damansara Heights, Bangsar, Ampang)
- properties close to transport links or facilities such as shops or schools
The asking rent will normally be the highest rent you expect someone to pay for your property. The asking rent is usually negotiable and landlords will usually settle for an amount below the asking rent, unless there is a lot of interest in their property in which case they may rent for the asking price or even above the asking price.
Your asking rent will depend on your circumstances
– if you are in a rush to rent your property a lower asking rent will potentially ensure that it is rented quicker. You may also decide to revise your asking rent after viewings have started
– if the property is not generating any interest it may be best to lower the asking rent. Speed is crucial in the renting game: remember every month the property is not rented means one month’s rent is lost.
Viewing time
The estate agents you have instructed will market your property and arrange with you a convenient time for prospective tenants to see the property. You may choose to be present during viewings or let the agent show the property on their own. Prospective tenants may feel more at ease viewing the property without the owner being present but by being present you would have the opportunity to address any concerns the tenant may have about your property.
If your property is currently tenanted check your rental agreement to ensure you have the right to bring prospective tenants in the property. If not ask your tenant if they would allow viewings. Either way you will need to give reasonable notice to the tenant and arrange for viewings at convenient times.
Presentation
Before allowing any prospective tenant in your property, you need to consider how best to present your property in order to optimise its potential. A few simple steps can greatly enhance the appeal of your property to prospective tenants:
- clean up: remove all clutter, make sure your property is sparkling clean and smells fresh and pleasant
- ensure comfortable viewing: switch on the aircons or fans before viewings; also switch all the lights on before viewings so the rooms are full of light
- time for repairs: fix any leaks, creaky doors and jammed windows
- decorate: plants and pictures are easy ways to enhance the look of your property
- don’t forget the outside: first impressions count so tidy the front of your property; a beautifully
- landscaped garden can also add much to a property.
Negotiations
A tenant is interested in your property and has made an offer through the agent who showed him your property. First of all make sure you find out from the agent what precisely the buyer expects to be included in the price he is offering in order to avoid any misunderstandings (eg, furniture, curtains, fridge). Also find out the prospective tenant’s employment credentials to determine the risks of the tenant defaulting on the rent. You now have the choice of accepting the offer, or rejecting it and possibly making a counter-offer or just sticking to your asking price.
The landlord’s position
What you decide will depend on your circumstances at the time you receive the offer:
- Are several tenants interested in the property and can you realistically expect a higher offer?
- Has the property been on the market for a long time without generating much interest? Is your asking rent realistic?
- Are you in a rush to rent your property?
The tenant’s position
Be aware that many tenants make offers which are lower than the rent they are prepared to pay for the property, to start off negotiations. Talk to the agent to get an idea of the tenant’s circumstances (are they interested in other properties? what is their budget?)
The agent’s position
The agent works for the landlord. He is paid by commission amounting to one month’s rent so he has an interest in obtaining as high a rent as possible. The agent should know the market inside out so it is worth listening to his advice. However do be aware that he also has an interest in making the tenancy happen, even at a lower price, rather than not happen at all.
The rental agreement
Once the rent is agreed between the tenant and you, the tenant will be expected to pay the first month’s rent to you to confirm the deal. On signing the rental agreement the tenant will pay 3½ months’ rent to cover for the security and utilities deposits.
The rental agreement will typically feature the landlord’s and tenant’s particulars, the address of the property, the agreed rent, the term and commencement date, as well as the tenant’s and landlord’s covenants. The tenant normally covenants to, inter alia, pay the rent, not cause a nuisance, keep the property in good condition, allow the landlord to show the property to prospective buyers or tenants.
The landlord normally covenants to, inter alia, carry out any repairs notified by the tenant, take out fire insurance, allow the tenant to peaceably occupy the property. If the tenant is an expatriate, the rental agreement may contain an expatriate clause specifying that the tenant may end the agreement if he is transferred to another location. The tenant may wish to negotiate other clauses, such as the right to end the agreement if a development starts near the property. The agreement will also stipulate what is to happen at the end of the term, eg tenant to give notice to end or renew the tenancy.
The tenancy agreement also often includes the inventory for the property. Ensure that the inventory includes all the items present in the property when the tenancy starts to avoid any dispute at the end of the tenancy. You may also want to take pictures before the tenant moves in to have a record of the condition of the property before the tenant moved in.
The end of the tenancy
The tenancy is coming to an end and the tenant does not wish to renew the tenancy. Make sure you start marketing the property for rent well in advance (preferably at least 1 month) of the expiry of the tenancy so as to avoid tenancy voids. Your rental agreement should include a clause allowing you to show the property to prospective tenants.
When the tenant leaves, inspect the property and go through the inventory to ensure they are leaving the property in the condition they got it in (allowing for normal wear and tear); you are entitled to retain part or all of the deposit to carry on any repairs or cleaning or paying any bills which were the tenant’s responsibility.
The most usual way to rent a property is through estate agents. Some landlords choose to market their properties privately to save on the estate agents’ commission but this solution has the following disadvantages:
- it can be very time-consuming as you will have to do all the work yourself, including advertising and showing the property to prospective tenants
- it may take longer to rent your house as you are likely to get fewer viewings than by letting professionals market your property- you may end up getting a lower rent as you are likely to get fewer viewings and therefore less interest in your property.
Selecting estate agents
Use several agents to market your property as this will result in your property being more widely advertised. You will only pay commission to the agent who actually rents the property so using as many agents as possible will not result in higher costs. Select estate agents who specialise in your area or property type as their client list will have the right prospective tenants for your property.
The easiest way to find suitable estate agents is to look at advertisements for similar properties on thinkproperty.my and contact the agent. Or drive around your area and look for agents’ signboards on properties for rent.
Help the agent help you
When giving your property details to the agent emphasise your property’s individual selling points. Think about any positives, from a large kitchen to an alarm system, or a good school nearby.If possible, take digital photos of your property which the agent can then send to prospective tenants or use in advertisements.
Renting costs
Estate agents charge 1 month’s rent as commission for renting a property.The small stamp duty fee on the rental agreement for rents exceeding RM2,400 is payable by the tenant.
Renting furnished, part-furnished or unfurnished?
Most tenants will require at least a part-furnished place, ie including such items as kitchen cabinets and curtains as these are specific to a property and tenants are generally unwilling to incur costs when they will be unable to take the items with them when they leave.
Advantages of renting a place without furniture:
- no hassle of having to buy furniture
- no initial capital outlay- many tenants prefer part
- furnished accommodation as they already have or intend to buy their own furniture
- tenants are unlikely to look after furniture which does not belong to them, although the deposit can be kept back by the landlord in case of damage
Advantages of renting a place fully-furnished:
- tenants who are looking for fully-furnished accommodation will pay a premium for the convenience of renting a fully-furnished place
- good furniture will make your property look much better than if it is left unfurnished and could thus potentially be rented quicker and for a higher rent
Determine your asking rent
How to determine market rent?
Estate agents will advise you on how much rent you can expect for your property. Be aware that some agents may give you a high expected rent in the hope that you will market the property through them, but overpricing may result in lack of interest from prospective tenants.
You may also want to view a few similar properties in your area in order to get an idea of how much your property should rent for.The following properties usually rent at a premium:
- modern properties
- beautifully-furnished properties
- properties in areas favoured by expatriates (eg, Damansara Heights, Bangsar, Ampang)
- properties close to transport links or facilities such as shops or schools
The asking rent will normally be the highest rent you expect someone to pay for your property. The asking rent is usually negotiable and landlords will usually settle for an amount below the asking rent, unless there is a lot of interest in their property in which case they may rent for the asking price or even above the asking price.
Your asking rent will depend on your circumstances
– if you are in a rush to rent your property a lower asking rent will potentially ensure that it is rented quicker. You may also decide to revise your asking rent after viewings have started
– if the property is not generating any interest it may be best to lower the asking rent. Speed is crucial in the renting game: remember every month the property is not rented means one month’s rent is lost.
Viewing time
The estate agents you have instructed will market your property and arrange with you a convenient time for prospective tenants to see the property. You may choose to be present during viewings or let the agent show the property on their own. Prospective tenants may feel more at ease viewing the property without the owner being present but by being present you would have the opportunity to address any concerns the tenant may have about your property.
If your property is currently tenanted check your rental agreement to ensure you have the right to bring prospective tenants in the property. If not ask your tenant if they would allow viewings. Either way you will need to give reasonable notice to the tenant and arrange for viewings at convenient times.
Presentation
Before allowing any prospective tenant in your property, you need to consider how best to present your property in order to optimise its potential. A few simple steps can greatly enhance the appeal of your property to prospective tenants:
- clean up: remove all clutter, make sure your property is sparkling clean and smells fresh and pleasant
- ensure comfortable viewing: switch on the aircons or fans before viewings; also switch all the lights on before viewings so the rooms are full of light
- time for repairs: fix any leaks, creaky doors and jammed windows
- decorate: plants and pictures are easy ways to enhance the look of your property
- don’t forget the outside: first impressions count so tidy the front of your property; a beautifully
- landscaped garden can also add much to a property.
Negotiations
A tenant is interested in your property and has made an offer through the agent who showed him your property. First of all make sure you find out from the agent what precisely the buyer expects to be included in the price he is offering in order to avoid any misunderstandings (eg, furniture, curtains, fridge). Also find out the prospective tenant’s employment credentials to determine the risks of the tenant defaulting on the rent. You now have the choice of accepting the offer, or rejecting it and possibly making a counter-offer or just sticking to your asking price.
The landlord’s position
What you decide will depend on your circumstances at the time you receive the offer:
- Are several tenants interested in the property and can you realistically expect a higher offer?
- Has the property been on the market for a long time without generating much interest? Is your asking rent realistic?
- Are you in a rush to rent your property?
The tenant’s position
Be aware that many tenants make offers which are lower than the rent they are prepared to pay for the property, to start off negotiations. Talk to the agent to get an idea of the tenant’s circumstances (are they interested in other properties? what is their budget?)
The agent’s position
The agent works for the landlord. He is paid by commission amounting to one month’s rent so he has an interest in obtaining as high a rent as possible. The agent should know the market inside out so it is worth listening to his advice. However do be aware that he also has an interest in making the tenancy happen, even at a lower price, rather than not happen at all.
The rental agreement
Once the rent is agreed between the tenant and you, the tenant will be expected to pay the first month’s rent to you to confirm the deal. On signing the rental agreement the tenant will pay 3½ months’ rent to cover for the security and utilities deposits.
The rental agreement will typically feature the landlord’s and tenant’s particulars, the address of the property, the agreed rent, the term and commencement date, as well as the tenant’s and landlord’s covenants. The tenant normally covenants to, inter alia, pay the rent, not cause a nuisance, keep the property in good condition, allow the landlord to show the property to prospective buyers or tenants.
The landlord normally covenants to, inter alia, carry out any repairs notified by the tenant, take out fire insurance, allow the tenant to peaceably occupy the property. If the tenant is an expatriate, the rental agreement may contain an expatriate clause specifying that the tenant may end the agreement if he is transferred to another location. The tenant may wish to negotiate other clauses, such as the right to end the agreement if a development starts near the property. The agreement will also stipulate what is to happen at the end of the term, eg tenant to give notice to end or renew the tenancy.
The tenancy agreement also often includes the inventory for the property. Ensure that the inventory includes all the items present in the property when the tenancy starts to avoid any dispute at the end of the tenancy. You may also want to take pictures before the tenant moves in to have a record of the condition of the property before the tenant moved in.
The end of the tenancy
The tenancy is coming to an end and the tenant does not wish to renew the tenancy. Make sure you start marketing the property for rent well in advance (preferably at least 1 month) of the expiry of the tenancy so as to avoid tenancy voids. Your rental agreement should include a clause allowing you to show the property to prospective tenants.
When the tenant leaves, inspect the property and go through the inventory to ensure they are leaving the property in the condition they got it in (allowing for normal wear and tear); you are entitled to retain part or all of the deposit to carry on any repairs or cleaning or paying any bills which were the tenant’s responsibility.
Saturday, August 22, 2009
Foreign Buyers
You will find a lot of articles on the internet about what foreigners can and cannot do in terms of buying, selling and renting property in Malaysia. You will also find that most of these articles contradict each other! It can thus be very difficult to find out simple answers. To settle the matter once and for all, we ask AIQ Global, a group that specialises in buying, renovating and selling or renting properties in Malaysia on behalf of foreigners to tell us what foreigners can and cannot do in Malaysia when it comes to property. The information is correct, according to them, as of the 29th of November 2007.
I am not a Malaysian citizen or resident, can I buy property in Malaysia?
Yes, you can buy any type of property in Malaysia, be it condos, bungalows or even land. You can buy both residential and commercial property in your own name, or your company for that matter. Foreigners are subject to the property being over a minimum price theshold, which varies from state to state.
Are there differences in the buying process when a foreign buyer is involved?
Yes, a foreigner must obtain state authority consent before the property can be transferred to him/her. This can take 6 weeks to 6 months depending on the state you are applying in (in Kuala Lumpur it typically takes 1-2 months), so it takes that much longer for a foreigner to buy property compared to a local buyer.
Does the Malaysia My Second Home Program offer any advantages when buying property in Malaysia?
No, it makes no difference to the buying process whether you are on the Malaysia My Second Home Program or not.
Are there differences in the sale process when a foreign seller is involved?
No, there are no differences. The process is the same as when a local buyer is involved.
I do not live in Malaysia, can I sign the Sale and Purchase Agreement in my country of residence or will I have to come to Malaysia to sign?
You can sign the Sale and Purchase Agreement at the Malaysian High Commission in your country of residence and do not therefore need to travel to Malaysia to sign. In certain countries it is not necessary to go to the Malaysian High Commission - instead a notary public can witness the signatures.
I am not a Malaysian citizen or resident, will banks give me financing?
Can I open a bank account in Malaysia?Yes, many Malaysian banks or foreign banks in Malaysia now lend to foreigners. They will typically finance up to 70-80% of the property price, and will sometimes, but very rarely, go as high as 85% if you are a very strong credit, the property value is significant, and you are speaking to the right bank. You will normally have to open a bank account with the bank financing your property purchase.
I do not live in Malaysia, can I rent out my property from abroad?
You can engage estate agents to market the property for rental on your behalf. They will take care of all the viewings. Some agents even offer renovation or maintenance services.
I do not live in Malaysia, how can I find a lawyer in Malaysia?
The Malaysian Bar website (www.malaysianbar.org.my) has a list of all registered lawyers and firms
I am not a Malaysian citizen or resident, can I buy property in Malaysia?
Yes, you can buy any type of property in Malaysia, be it condos, bungalows or even land. You can buy both residential and commercial property in your own name, or your company for that matter. Foreigners are subject to the property being over a minimum price theshold, which varies from state to state.
Are there differences in the buying process when a foreign buyer is involved?
Yes, a foreigner must obtain state authority consent before the property can be transferred to him/her. This can take 6 weeks to 6 months depending on the state you are applying in (in Kuala Lumpur it typically takes 1-2 months), so it takes that much longer for a foreigner to buy property compared to a local buyer.
Does the Malaysia My Second Home Program offer any advantages when buying property in Malaysia?
No, it makes no difference to the buying process whether you are on the Malaysia My Second Home Program or not.
Are there differences in the sale process when a foreign seller is involved?
No, there are no differences. The process is the same as when a local buyer is involved.
I do not live in Malaysia, can I sign the Sale and Purchase Agreement in my country of residence or will I have to come to Malaysia to sign?
You can sign the Sale and Purchase Agreement at the Malaysian High Commission in your country of residence and do not therefore need to travel to Malaysia to sign. In certain countries it is not necessary to go to the Malaysian High Commission - instead a notary public can witness the signatures.
I am not a Malaysian citizen or resident, will banks give me financing?
Can I open a bank account in Malaysia?Yes, many Malaysian banks or foreign banks in Malaysia now lend to foreigners. They will typically finance up to 70-80% of the property price, and will sometimes, but very rarely, go as high as 85% if you are a very strong credit, the property value is significant, and you are speaking to the right bank. You will normally have to open a bank account with the bank financing your property purchase.
I do not live in Malaysia, can I rent out my property from abroad?
You can engage estate agents to market the property for rental on your behalf. They will take care of all the viewings. Some agents even offer renovation or maintenance services.
I do not live in Malaysia, how can I find a lawyer in Malaysia?
The Malaysian Bar website (www.malaysianbar.org.my) has a list of all registered lawyers and firms
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