Buyers need to ask these questions to the agents because, let’s face it, the agent’s primary concern is to the vendor who is paying them. I have come across a lot situations where the purchaser could have had a better time if the agent was doing their due dilligence.
1. How old is the property based on the current and/or previous sale-purchase agreement (SPA). If it is longer than 10 years, ask the owner to furnish the strata or individual title, at the very least, the letters from developer or lawyer saying that the transfer is taking place. If the agent can’t give a straight answer, don’t pay the booking fees. Why is this important? Well you can start by reading the importance of the titles from a previous article here.
2. Would it be possible for the downpayment to be paid using the EPF withdrawal, if you need to? This process takes a longer than if the purchaser had paid the downpayment using cash, but not everyone is so lucky. Some vendors are symphetatic and would not mind the wait, but can you guess whom would be against this? The agents. The agents wouldn’t be able to claim for their commissions until the SPA is stamped, so acting on their own best interests, they would notmally simply say NO”. The agents are supposed to act on behalf of the vendors, but in this case they would be overstepping their mandate by being rather, I don’t know, selfish?
3. Insist on a clause that says 90% loan approval or the full deposit is returned. The legality of taking the booking deposit is questionable in the first place although that is the industry practice. They are also not allowed to forfeit the deposit but they will do their utmost best to weasel their way out of returning your deposit. The clause above gives you a footing in the case where your loan is approved but not up to the amount that you were looking for. Imagine buying a RM500,000 property; having prepared to pay the RM50,000 and other fees (SPA, stamp duty)
4. This may be obvious if you already asked for the SPA and strata/individual title, but it is worth asking again for clarifications: What is the lease type (freehold vs. leasehold), the restrictions of interests for name-transfer, the land use restrictions, and if it is a leasehold, the date of lease expiry. The answers to these questions should be answerable by a good agent who knows the property that he is selling.
Too often have I had to deal with incompetent agents who are more concerened with sellin the property without doing the hard work of understanding from the top to bottom of what they are selling. They don’t know their own merchandise, and when pressed will claim that the banker should be doing his due dilligence. It doesn’t make sense, since the banks will only able to act on the documents and information presented to them, and if the purchaser is not careful they will be in a world of hurt especially during the loan application processes and the time when they need to dispose the properties.