Hi Everyone,

Apologize for the late release of this article. I’ve been overseas for the past month on a business trip. Anywayz here’s an article to keep my Key learning’s series going

•  Lesson 2.2 - Bank Loan Agreement

Bank loan agreement is an agreement between the bank and you. Basically it can consists up to 3 different agreements namely

1. Facility Agreement
2. Power Of Attorney
3. Deed Of Assignment / Title Charge

Firstly the Facility Agreement  is an agreement made between you (the borrower) and the bank. This agreement basically consists of all the terms and conditions which has been set forth in the Letter of offer. Do note that different banks have different Facility Agreements. Your Lawyers would need to purchase this document from the bank.

Secondly, Deed Of Assignment is a temporary agreement made between you and the bank to ”Assign” the property to the bank as a guarantee. Deed of Assignment is only required for properties that has yet to obtain their individual land titles. Upon obtaining the land title for the property, another agreement will be executed to charge the Land Title to the bank.

Lastly, Power of Attorney, is an agreement between you (the Donor) and the Bank to appoint the Bank’s panel of lawyers to look after your rights as a borrower as well as the banks rights in the event of a dispute. Among the tenets of the agrreement is a clause for the Attorney to sell away the prperty in the event of a default.

The cost of the agreements varies with the loan quantum ie the higher your loan amount the more you will need to fork out to pay the lawyers :) 

Rule of thumb, - Estimated Legal Fees (percentage off the Loan Quantum)

• 1% of the Loan Quantum for the Facility Agreement
• 0.1% for Deed Of Assignment 
• 0.1% for Power of Attorney.

Lastly, you will need to factor in the cost of Stamping Duty. For Loan agreements, the stamping duty is set at 0.5% * Loan Quntum.

Let me conclude my article with an example. For a Loan Quantum of RM 300,000, here’s a breakdown of the estimated legal fees

• Facility Agreement  (1% * RM300, 000)               ~RM3000
• Deed of Assignment (0.1%* RM300, 000)           ~RM  300
• Power of Attorney  (0.1% * RM300, 000)            ~RM  300
• Stamp Duty           (0.5% * RM300, 000)            ~RM1500

Total costs = RM5100

Tip :- Always remember to Read more »

When I saw this news, I was immediately attracted to it. China lending us money to build Penang’s second bridge? hmm… interesting. Let’s keep our fingers crossed that the bridge will truly go through. Read on to satisfy your curiosity. Read more »

If you are a Penangnite or an Ipohian, this piece of development plan by the government will get you excited. If it really materialises, I could just imagine the tremendous growth in the area. The youngsters from Ipoh would no longer be everywhere except in Ipoh.

By the way, if you are wondering what is Ipoh, Ipoh is the capital of Perak state, a beautiful city well-known for its limestone caves, bougainvillea flowers and pretty girls. Hahaha

Also, it is also known as a food paradise for gourmets who loves the simple yet tasty dish. The famous bean sprout (also known as taugeh in hokkien dialect or nga choi in cantonese dialect) which is crunchy and juicy due to the clean water from the hills.

There was this saying that the girls who grew up in Ipoh are prettier because Read more »

Another piece of interesting news, highlighting the new property growth areas in the capital of Malaysia. This goes to show the trends in the property market in Malaysia.

Read on for the whole picture of the property trend. Read more »

This piece of news sounds like an opportunity to me. Why?

With many unsold Bumiputera lots up for sale only means that you could be getting some property at good location. The ‘unattractive pricing and location’ in the news refers to the pricing and location of their perception. I guess the perception varies from individuals to individuals. The unattractive pricing could be because those units are of higher-end, thus is pricier.

However, there could be some disadvantage though. Usually, Bumiputera lots are Read more »

Good news for Penang and visitors or tourists planning to go there for a holiday. You will be able to hop onto a monorail to tour around the Penang Island soon! Read the news articles below for more information. Read more »

Hiring lawyers comes with a cost :). As such, to assist new home buyers who have just purchase, or those who are planning to buy their first dream home in Malaysia, I’ll be listing a list of Legal Fees to be aware of.

Lesson 2 - Lawyer Fees 

The fee structure listed below is applicable on to home buyers who fits the following criteria

1. Bought/Purchase a home which is still under developer master title
2. Obtained a loan facility from any Bank

For homebuyers who fulfilled the above criteria, do note that you would have to be prepared to fund the following lawyer Fees.

• Lesson 2.1 - Sales and Purchase Agreement (SnP)

SnP is an agreement between you (the homebuyer) and the developer. It serves to protect the interest of both paarties in the event of a dispute and the clauses in the document is safeguarded and dictated by Malaysian Law.

During the SnP, the developer may impose on the buyer several other “Agreements” for eg The Deed of Mutual Covenant. In brief the Deed Of Mutual Covenant is used to protect the rights of each and every individual household within the gated community as well as the right for the developer to run the maintenance and upkeeping of the facilities within the said property within a certain period of time upon completion.

Legal fees for SnP is dependent on the Purchase price of your Dream home. Basically you should be able to estimate your lawyer fees based on the following

1. First RM100000 - 1%
2. Next RM100000 - RM4.9 million - 0.5%
3. RM4.9million - RM10million - 0.25%
4. Above RM10million - Negotiable.

SO typically for a property costing RM300000, do expect to fork out at least RM2000 in professional fees alone for SnP.

There are several other Miscellanous fees attached tot he whole SnP billl as well for eg Travelling, Stamping, Photocopying, Miscelllanous (yupz there’s a space for Miscellanous) and Searches (Bankcruptcy, Title). These miscellanous fees could easily add another RM300-400 in your final bill. Read more »

As my partner said, I’m hijacking the site. Well, anyway, when there’s good things, must share right. I’m diverting from the usual property talk we do to present to you this recent finding which I find is rather interesting.

I first stumbled upon Agloco when I was surfing around the web and reading other people’s blog, Wei Ping’s to be exact.I read the write-up there and was attracted to the novel idea, which I like a lot. Here I reproduce the write-up here, which I find is quite comprehensive.

What is Agloco?

Agloco simply means A GLObal COmmunity which is a system that connects online advertiser with the potential customer which is of course, us, as a internet user. It is the only way you can earn money online by doing what you are already doing - simply surfing the web.

Agloco is completely owned by its users where the shares will be sold in London later and is led by a group of professional people including experienced entrepreneurs and managers.

How do I earn money from it?

Join as a a member and the good thing is, it’s FREE. Download the Viewbar (due to be ready in a few weeks time) and just surf as you normally do. You will be paid in various channels:-

1. Members will be paid on a per hour basis based on your monthly usage of the Viewbar up to a maximum of 5 hours per month. Advertisement will be displayed on the Viewbar and the advertiser will pay Agloco and Agloco will reward its member for using the Viewbar.

2. Members who used the referral system to build the community will be rewarded.

3. Members will get a share of commission on what Agloco received from the advertiser when its member purchase a product or services from the advertiser.

However, do note that member will not be paid for recruiting new members into the community or clicking the advertisement on the viewbar.

Is Agloco a scam? Can I trust this company?

It can’t be a scam as it is completely FREE to join Agloco. Agloco is founded by a few successful people, including 8 Stanford graduates, who also founded AllAdvantage, which created some controversy by paying $100m cash money to its user before it crashed to the Dot Com burst in year 2001. The good thing is none of the member complained about being not paid when it went out of business.

How does Agloco makes money for its member?

Agloco generates money for its member through a few channel. Major one are:-

1. Searching - When you use the Viewbar to do a search like how you normally do using Google or Yahoo, Agloco will get paid from the search engine providers.

2. Commission and advertisement - The Viewbar will display targeted advertisement based upon the websites you are visiting and Agloco will get paid a certain amount of commission if members buy something online as a result of viewing the advertisement, which the commission will be passed on to its members.

Step by step guide in joining Agloco

1. Click on the Agloco image above to join and it will prompt you to the following page:

2. Fill in your particular and click the “Click Here To Join” button.

3. Check your email account and click on the link to complete the registration.

4. And that’s it, you should see your referral code and welcome to the family.

Lawyers lawyers lawyers……

As i mentioned before, either u hate them or you love them. Thats pretty much what we did, love and hate them.

Lawyer firms in Malaysia are pretty complex. Some are one-man show lawyer firms while others are so called “MNC”(big) equivalent (with numerous partners). Well it might be the same for the rest of the world, but its certainly an eye opener for me when it comes to dealing with them.

Through our recent home buying deal, we learnt a painful lesson that we would like to share with all first time home buyers. This lesson is unique in a way that you will not learn it from any books. (Hmmm Would be a good topic for my ebook)

Lesson No 1 - Predetermined your Banker

The Bank you engage for your end-financing services will determined the law firm that you will work with. 

As such, before engaging the services of any lawyer firm, first predetermined the Bank. Different banks in Malaysia have different requirements on the lawyer firms that is “allowed” to do the loan processing. They have the so-called “Panel” lawyers that will be given the privilege to engage with you on loan documentations.

Therefore, once you have narrowed down your home loan choices to a few banks (ie 2-3), obtain the names of the law firms that is on the banks panel. Best case scenario would be to hire a lawyer who is on all 3 banks (of your choice) panel of lawyers. If this is not doable,  then rank and rate the banks of your choice based on the offer letter, and hire the lawyers accordingly.

Ultimate goal is to be able to hire the same law firm for your Loan Documentation with the bank as well as engaging them to handle your Sales and Purchase Agreement with the developer. In Malaysia, the developers are usually pretty lax on the law firms that is used to represent the home buyer. On the other hand, Banks are very reluctant to work with Law firms that are not on their panel.

Rule of thumb - Foreign banks tend to prefer “MNC”(big) law firms due to their higher malpractice insurance coverage while most local banks are comfortable working with one-man show firms. Hence, Predetermined your bank and the bank will determined your lawyer firm.

 Tags: Lawyers, Lawyer, Banker, Malaysia, Home, Property, Properties, Law Firms

“Too many cooks spoils the soup” - too many lawyers and a simple transaction becomes a long and lengthy transaction.

The same key learning applies to home transactions as well. It is wise to keep all the legal transactions under one law firm whenever possible and limit to 2 for complicated one.

Not only will you save on legal fees, you would also save on the headache, heartache and stress of working with various lawyer firms. You will also save on time, especially when time is of essence in a house loan legal documentation.

As such to assist future first time home buyers, I will be writing a series of Key Learnings on the stuffs I have learnt based on my experience in dealing with 2 different lawyer firms on my recent house purchase activity.

So stay tune and look out for the upcoming Key Learning series.