2020-03-12

Selling Your House: What You Need To Know?

Selling Your House: What You Need To Know?



If you are ready to sell your house, it is time to prepare the property for sale. One of the most important things you need to know is making a first impression, especially amid the current situation where it is a buyers' market.

A buyer's market refers to a situation in which the supply of houses exceeds demand. This gives buyers an advantage over sellers in terms of price negotiations. The opposite of a buyer's market is a seller's market, a situation in which demand exceeds supply and this is where you may see property prices increase in value.

So spend more time to prepare your home for sale and it will prove invaluable once it hits the market. You have to also consider several fees (legal fees, lawyer fees, agent commission) and taxes like the RPGT (real property gains tax) when you put your property up for sale. Some of the important points to keep in mind when preparing your home for the market:

SELECT A GOOD REAL ESTATE AGENT

Work with a reputable realtor who can offer you the opportunity to have your property marketed via the multiple platforms making it available to an even broader spectrum of potential buyers. The agency should also be able to provide you with all the necessary market information that you may require before putting up your property for sale.

After you have narrowed down on the agency, you’ll have to pay their fees. According to an article by PropertyGuru Malaysia entitled "Selling A House in Malaysia: What Do You Need To Pay For?", a property agent’s services include pricing and advertising your property, arranging for viewing and bookings of the property, as well as negotiating with the prospective buyers on behalf of the seller.

In return for these services, the agent will charge a commission, which is usually two to three per cent of the property’s selling price, and capped at three per cent.

For example, if your property is sold at RM1 million, then the maximum commission the agent can get is RM30,000.

GET YOUR DOCUMENTS IN ORDER

You should have all the documents ready such as sales & purchase agreement, deed/mortgage satisfaction, letter/copies of rental agreements and utility bills should a potential sale arise regarding your property. The documents are important to submit to your listing agent, attorney or potential buyers.

Make sure all outstanding municipal or city council assessment bills are paid and if you are selling a high-rise residential unit, check if the monthly maintenance/sinking fund has been paid in full and is up to date.

LEGAL FEES

You will have to pay legal fees after you’ve secured a buyer for your house. The lawyer would need to draft the Letter of Offer and the Sales and Purchase Agreement (SPA), as well as handle other legal matters associated with the sale. The legal fees, or cost for hiring a lawyer, are charged based on the property’s selling price as follows:

For the first RM500,000 (price of the property) - 1.0% (rate)

For the next RM500,000 - 0.8%

For the next RM2,000,000 - 0.7%

For the next RM2,000,000 - 0.6%

For the next RM2,500,000 - 0.5%

If your selling price is RM2 million, you’d have to pay RM16,000 in legal fees. The calculation is as follows:

The first RM500,000 would be one per cent for RM5,000.

The next RM500,000 would be 0.8 per cent for RM4,000.

The remaining RM1 million would be 0.7 per cent for RM7,000.

REAL PROPERTY GAINS TAX (RPGT)

RPGT is a compulsory tax you pay to the government when you sell your property. The RPGT is a form of Capital Gains Tax levied by the Inland Revenue (LHDN). It’s a tax you pay for any profits you receive on the sale of your house in Malaysia. You do not pay the tax if there’s no profit to be made, or when you make a loss from the sale.

To calculate your RPGT, you’ll first need to know your chargeable gain (difference between the purchase price of your property and its sale price). You then multiply this with the relevant rate for RPGT. An example given by PropertyGuru:

If you, as a Malaysian citizen, purchased your property for RM500,000 three years ago, and you sold it for RM800,000, then your chargeable gain is RM300,000, and therefore, your RPGT rate would be 30 per cent.

The RPGT you’d pay would then be: RM300,000 x 30 per cent = RM90,000.

The lower your chargeable gain and if you take longer than five years to sell your property, the RPGT would be reduce.

SELLING YOUR HOUSE WITHOUT THE SERVICE OF A REALTOR

You can sell your own home without appointing a real estate agency, saving you thousands of Ringgit in commission and other fees. However, there will be cost for you when you sell the property on your own.

Not only will you have to spend money advertising your property, you'll need to engage a certified appraiser to give your property a professional valuation so you can price it more accurately. PropertyGuru has shared how the fees are calculated:

Up to the first RM100,000 (price of the property) - 0.25% (rate)

For the next residue up to RM2 million - 0.2%

For the next residue up to RM7 million - 0.167%

For the next residue up to RM15 million - 0.125%

For the next residue up to RM50 million - 0.1%

For the next residue up to RM200 million - 0.067%

For the next residue up to RM500 million - 0.05%

For the next residue over RM500 million - 0.04%

If your property is valued at RM900,000, you'll be charged:

= (0.25% x RM100,000) + (0.2% x RM800,000)

= RM250 + RM1,600

= RM1,850 (total valuation fees)

"Once you’ve determined the value of your house, the next step is to let people know that it’s for sale. Advertising it online via social media, or getting your friends and family to spread the news via word-of-mouth are effective ways," it said.



Source: NewStraitsTimes

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