1) Deciding to buy
This is your first and important step. You must really decide whether you want buy a property or not. Your answer rely heavily on your current financial standing as well as your future planning. In addition, what do you plan to do with the property? FOr investment or for your own?
Azizi Ali said, buying a property is one of the many sources of SPT (Sumber Pendapatan Tambahan). In addition, buying a property is not like buying your daily fix of goreng pisang or rokok, it can eat up your savings or it can give you many happy returns in the long run. So think wisely...
Once you've decided to buy a property through an auction, browse through one of these sites for more info on the properties, auction dates, etc...
Again, browse through these sites may help you to identify the property that suits your budget. Perhaps, if you wanna be safe and a low-risk taker like myself, you could start of your property investments by purchasing low and medium cost flats first. Learn the tricks and trade along the way before moving up to buying high-end properties. A property with a reserve price of RM60k and below should be a good start (but this depends on the location of the subject property).
2) Location! Location! Location
Just like in sales where the keyword is promotion-promotion-promotion, the keyword in properties is LOCATION. Forgive me in saying this, you wouldn't wanna buy a property for investment in Bukit Beruntung right? (even though the RP is only RM18k?) From the websites that I've stated above, you could find the address and sometimes the pictures of the properties. SO from these addresses, it would be a good idea for you to identify which properties are located strategically and which area are not. For example, a few weeks back, I had bid for this property (Sri Penara flats) located in Cheras. The flat is strategically located and everything is there (LRT/Komuter/School/Shops/Banks, etc). Unfortunately, I lost the bid to someone else. Hehehe. However, my point is, look for property that is strategically located. (Cheras, Bangi, Puchong. Kota Damansara to name a few)
3) Visitation
Once you have identified your targeted property (through the websites), it is advisable for you to go and make a visit at the subject property. Talk to the people who are staying there and ask what would be the rental amount for the place. If possible, look around for shops/schools/public transportation nearby. On the property itself, unfortunately, you can't go in. Just look from the outside and anticipate any repair costs (grills/windows/wiring/etc)..
IF you have time, go to the maintenance office and enquire as to what will be the outstanding maintenance fee be. ( this is important as you may need to pay any outstanding fees upfront to make everything easier once you've purchased the said property)
It'll be also good to know whether the subject property is a leasehold or a freehold...(if time permits, I'll touch in this subject later)
Now, once you have done all this, it'll be good for you to register yourself with the auction to bid for the property.
4. AUction Day
Usually, at the auction, a bidder is requested to prepare a bank draft of 5% or 10% of the Reserve Price amount for the property. Depend on the POS so keep contact with the auctioneers for the amount that you need to prepare. Some places accept credit cards but there's a charge for using CC. Don't use unless necessary....
It is important to note that you should have reasonable budget when you go for an auction. For hot areas like Sri Penara for example, no doubt the RP is RM60k but it can go high up till RM80k during the auction. So set your budget and stick to it. If you win, then that's good and get ready for more headache (hehehehehe). If you don't get it, tough luck and try again.
Please note, that if you win at RP, then do nothing and proceed to sign the contract. However if you win a bid above the RP, you need to settle the difference with cash. For example, if the RP is RM60k, then you need to prepare a bank draft of about RM3k (5% of the RP). Then, if you win the property with a bidding price of let's say RM80k, you need to settle the RM1k in cash (5% of RM80k is RM4k. RM4k-RM3k=RM1k). Are we clear on this?
Another point I'd like to add, sometimes, during the auction, some officers from the banks would be there to assists you in getting the loans. So, talk to them and ask to what the process will be (which is very simple) and then perhaps, when the time comes, you can directly contact them to assist you with the loan application.
For my case, I applied through CIMB bank as they give the best rates available amongst other banks(especially loans below RM100k). I'm expecting a monthly payment of about less than RM400 for both properties. If I can remember correctly the rate is about 4.55% and BLR -1.95%....So, it's entirely up to you to decide..shop around and look for the best rates...
Please bear in mind that you need to settle the amount that you won within 90 or 120 days depending on the contract. So please, get your loans approved ASAP.
5) I won!! What should I do next?
Well, once the hammer falls, the property is yours like it or not. You will then need to pay about RM50 for stamping fees and perhaps you should collect the contract the very next day from the auction house. With the contract in hand, you could now enter the property and inspect what repair should be done. I know someone who can do this professional job of 'break-in' or pecah rumah for you and they will help you to estimate the repair cost as well. Refer to Mr Pie.
At the same time, get you loans done. Pay a visit to your nearest bank and get it approved. What you need is
- The contract (proclaimation of sale)
- Three months salary Slip
- Employer's letter
- EPF statement (latest)
- EA form
Ok, there's that.
Secondly, go to the maintenance office and clear off those outstanding maintenance fees. It's ok as you can claim the disbursement through your lawyer later. When can you get your money back?(I know this is the million dollar question) and the answer is...it depends on the bank and the lawyer. A good tip is, you could hassle them everyday so that they would process it faster for you. Otherwise, you'll just have to wait....
Third (provided that your loan has been approved).....you need to find yourself a good law firm to help you with the transfer of name. (memo of transfer or deed of assignment). I'm pretty sure all of us will know one or two lawyers on top of our head as we read this. Hehehe...For this legal services, I think, the fees for the legal services should be about 1% of your RP of the property.
Let's hope that all of this process can be done before the 120th day after you've won the property. If not, well...that's another story.
Well...that's basically it (from my personal experience...). I'm pretty sure that some things or infos are left out whether purposely or not. So, there you go, the simple process that I personally encountered from buying my properties through an auction. What you want to do with the property is entirely up to you, and for me, I hope that the property will be ready for rental before the 3rd week of February. Let's see how it goes...
Till then...
Have a nice day
you can do it dear!!!!
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