What is zero down?

Zero down has many definitions. One of the most popular ones is as follow:

- purchase a property with 0 down-payment!

How does one do that? Simple.

- Your 1st or 2nd property.
- Cooperative seller that owns the unit for more than 5 years.
- Seller agrees to value the property 10% higher than actual selling price.
- Bank values the property higher than the agreed selling price.

- You agree to pay the extra / incremental on stamping + lawyers fees for seller due to higher property price.

Example

- Agreed selling price RM100,000.
- S&P prices 10% higher than agreed selling price at RM110,000.
- You pay earnest deposit of RM1,000 (1%).
- Bank loan = 90% of selling price = RM99,000
- Sign S&P without down-payment.
- Bank loan releases RM99,000 to seller (RM1,000 + RM99,000)

Tadaa! This is good for property buyers who could not afford or do not want to pay the 10% down-payment.

For the little details, please check with me.

New ruling for foreigner property purchaser in Malaysia

The government is considering raising the minimum floor price of property for foreigners. Foreigners are only allowed to buy properties priced RM1,000,000 and above, from the current RM500,000, should this be enforced in July 2012.

For MM2H participants, they can buy up to 2 units below RM500,000 with good reason and letter of support from the Tourism Ministry.

For Permanent Residence, they can purchase properties from RM250,000 and above.

Anything is possible, but don't loose sight of the big picture!

There are good deals and bad deals in the property market (and in life).

The trick is, to always focus on the long term goal instead of bargaining for the last RM5,000 or RM10,000 savings and loose the opportunity to buy a very good property. If you've done your due diligence, done your research right, where the rental income, future appreciation meets what your target, just go ahead!

Chances are, you shall earn more from what you're trying to save today in the long run instead of letting others steal away this deal. If it is for your own stay, you might not come across one that is as matching to your requirements. There will not be a 100% matching property. This is not heaven. If it is tolerable, or can be fixed with a small sum of money, just do it! 

It's better than to regret later that you miss this super opportunity to get something really good or something you really liked. If it is a good deal, there is very high chances that someone else are eying at the very same property and they will grab the deal without hesitating. It happened to me previously where I wanted to get a corner 2 storey terrace and I missed it just by "that" much. :( It is now selling at 3x the price. Oh blimey...

You shall be surprised how many rich people are out there. I've known customers with > 80 properties, some that buys a whole stretch of 8 bungalows (~RM3,000,000 each), and etc. They're already rich enough. Don't let them get all the good deals by doing your part!

Focus on the big picture! Buying property is about the big picture. There is no single best property. Just get the good ones, and move on to buy another good property! You shall be proud of the portfolio you built in the future instead of sulking that you could not get the BEST property for the rest of your life!

Remember this -

Time and tide wait for no men.

Buy or not to buy now?

Many people are saying: Market is going for a correction, do not buy now! Prices will go down further!

I've heard this for so many of times since 2010! And look at the property prices now? It has increased at least 25% to 50% or more since! Prices will just stay stagnant or go up in Penang!

Another one is: Election is coming. Wait for after election then only buy your properties.

Do you think you can wait for after election to go in? By then, it would be too late! What do you think will happen after election? Once the dust has settled, people will flock into the property market and that will push the prices up! 

In addition, with Penang being a heritage city, things will only better (prices go worse).

The market has slow down now no doubt. That also means that it is time to get good bargains! People are eager to sell now. It is buyers market! There are more sellers than buyers for sub-sale market. People are sitting on their properties for months, paying installments and are waiting to get rid of the properties.

Don't you hate it when you offer a last price and the seller has actually got other higher offers in their hand?  For sure there are richer people than you and are willing to pay a premium / higher than the market price for the properties at a hot market. People just race for them during good times.

So now with everything slowing down, that means that you will have chance to choose, and get the property of your dreams, at a much lower price. Lower price is not a good term to use. It should be, at the "RIGHT PRICE!"

Do not wait for the price to go down further, as anytime the election may come and you know what happens after that... Just like the stock market, you cannot get in at the bottom-est price, and get out at the highest price. It will not happen.

When then market starts to fly again, you can only look and sigh if you don't grab the opportunity now to lock in your price.


“Be fearful when others are greedy and greedy when others are fearful”. Warren Buffet 

Good deals? Buy under market price?

A lot of people ask me, I want only good deals or buy below market price for sub-sale houses.

After being in the property market for so long, the only advice I can give you is, pray more to your god, get to know more people (point #1), and be VERY good friends with the property agents (point #2)!

If they're good deals on the market, or properties being offered under market value, these things would happen:

1. Sellers (point #1) sell to their relatives or relatives of relatives
2. Seller sell to their good friends or friends of good friends
3. Agents (point #2) buy it themselves
4. Agents recommend them to their relatives or relatives of relatives
5. Agents recommend them to their good friends or friends of good friends
6. People with connection to agents (under-table conspiracy or anything) 
7. Early HARDWORKING birds get them
8. Auction is possible... 
9.  Lucky people - you just hate them, don't you? I do know a couple of them! 
10. This is where YOU are... #10, pathetic #10... 

A side note on lucky people. Some are just not lucky at all but they do appear that they're lucky. You just do not know what are the hidden things behind the success story. I once know a guy (well, I still know him) that won a BMW 520 from a lucky draw!

Do you want to know the secret? His god is super geng-chau? He prays a lot? He knows the boss of the lucky draw company? NO! The number of entries he sent in will shame you! He spent almost RM50,000 just to buy enough products to gain enough entries. RM50,000 to buy a BMW 520? That's very worth it and one hell of a ROI! Now this is what I call smart people. That is something people don't tell you.

Buying properties is like buying stocks nowadays... at least getting insider information or insider trading is legal in properties market. :) So, get to know the agents, and be their super good friends!

That's what I would do.

Buy properties procedures (subsales)

These standard 'buy properties procedures (sub-sales)' are for newbies, experienced guys please look elsewhere. Of course, there are other variations. This is the most common version.  :)

1. Find the properties you like (duh!).
2. Do a search for the property to ensure the seller is the real owner, no caveat by other parties except the bank where seller gets the loan from (if applicable)
3. Get the S&P from seller and verify the validity of seller's claim.
4. Check property value via bank / property agent.
5. Sign booking form with seller.
1. Pay 1% earnest/booking deposit to seller or lawyer being the escrow if large amount is involved. 
2. Go get a lawyer to prepare S&P / SPA (Sales & Purchase Agreement) - ready in 2 weeks time.
6. Apply for bank loan to finance your property purchase (usually 70% for 3rd property - 90% for 1st-2nd properties). 
1. Loan approval usually completes in 1 week (if you qualify).
7. Sign S&P / SPA when lawyer is ready.
1. Pay 9% deposit to seller (total is 1% + 9% = 10%)
2. Pay 1% + tax to property agent as commission (if through agent)
3. Pay lawyer for S&P preparation fees.
8. Let the lawyer complete the S&P within 3 + 1 months period.
9. Bank will settle the remaining 90% outstanding sum when completed.
1. Pay lawyer the outstanding fees balance.
2. Get the keys and check your house!
3. Start servicing your loan! 

Tadaa! That's it! Simple isn't it? 

Education - property auction

Benefits of auction

• Buy lower than market price properties. Usually properties are auctioned at a fraction of their current value.
• Get the property you want – sometimes good properties at good locations are hard to come by. 

 These are good enough benefits! I do not want to list more!

Preparation before auction

1. Register yourself with the agency (us!)
1. Property details 
2. Full name as per I/C
3. I/C number
4. Contact number 
5. Email address
6. Physical address
7. We shall email/post you the P.O.S.
2. Check and analyze the Proclamation of Sales (P.O.S.).
3. Go check out the property personally.
4. Check with the land office on the property title, caveats and etc.
5. Purchase bank drafts of 10% the reserved price (check the Proclamation of Sales P.O.S.).
6. Check if the property is still up for auction – it might be withdrawn at the last minute.
7. Go for auction. 
8. Bring additional money / cash / check book to pay the balance of 10% as final auction price might be more than the reserved price. 
9. If you are unable to go there personally, you can assign a proxy to bid for you. Please contact us for details on how to do so. 

Auction process

1. Arrive at auction venue.
2.  Bring your I/C.
3. Pass 10% bank draft to court’s registrar.
4. Auctioneer explains the terms and conditions.
5. Auctioneer announces the bidding and starting price will be the reserved price.
6. Bidding starts and people raises their hand / bat to bid.
7. Price is repeated to let everyone know the new price and this goes on with other people bidding.
8. This continues until no more people bids at the last price.
9. After 3 calls, hammer drops and the winner takes the property.
10. Winner then signs the contract and pays the balance.
11. Take back your bank draft if you did not win the auction.
12. In 90 days, you’ve to pay the balance of the auction property price.

Happy bidding / winning!