Hi,

I am currently looking into buying a house. I have met with the agent that is selling the house and has given me the final offer price...which is from what I know...below market value. Based on 2 other houses that is within the vicinity.

For instance, the other 2 houses is up for sale at RM 500-530K. And the current house that I am looking at is RM470K. I think it's a good deal. But how would we check the proper or correct market value of the house? the houses are all of the same design and are just one or 2 streets away.

Can I call off the deal if i decided not to get the house even we have come to an agreement and the 2% deposit is paid?

thanks

Base on the previous sale price, not the one currently on sale.
Check with your agent.

yup...the value is based on the previous sale value...

anyway i got fens in henry butcher..I dont mind helping out...pm me

based on the previous sale value? the house as i know was sold at RM400k 5years back. It was direct from developer then. And since then the area has boomed. thus increasing the overall value of the whole township.

Same answer as my previous post.
Ask your agent to give you the price of the houses being sold in that area within a year.

But this is the problem isn't it, that you have to go through agents? And of course each agency will have its own records, the quality of which will vary from area to area depending on the volume of their transactions in that area. Is there any national registry of property sales that the average citizen can search through? I know this kind of database is available to Americans. It would be wonderful if Malaysians could do this.

There is actually an evaluator company. Bank will ask for their service for valuation. You can ask them to value a property too, but they will charge u for their service.

When bank say "i will check the value first", means they will check it with their valuer. Before they release the money their valuer might have to submit a valuation report etc etc. Bank normally pays for this.

But like i said above, u can use their service if you pay. For eg, GS Valuer's office is in SS15 subang. For unformal service, just ask a bank/call up the valuer.

There won't be 100 agents in your area. They are just a call away.
Or go the harder way, see post 7.

1. market value = transacted value (ever heard of the term "marked to market"?)

2. the way you describe value.. gave me an indication that you're a good "waterfish" target. you can only determine(with a degree of calculated risk) good value with a series of due-dilligence. have you done any besides the price factor alone?

3. having a proper appraised house is not your primary concern, but having an approval of the loan amount is. have you heard of the term "pre-approve loan"? the process of having it pre-approved acts also as a sanity check... if you're suitable to swallow such debt and if the valuation of the said property is sound.

4. walking away from a deal with an agreement and not to buy is not free-lunch, it's not binding unless you're foolish enough to sign some legally binding papers without exit clause!! what you'll loose is the 2%.

...treat that as a learning fee if you have to walk away (for that's one good education you'll get, albeit the pricey fee)

Most people would not know what an exit clause is.
It saves me thousands in my first deal.

Location.. where is the location?

ask the bank..

Best answer

Caveat, properties can be an emotional thing for some, and you can't really put a value on it. As the cliche goes, price is what you pay, value is what you get.

This post has been edited by meejawa: Apr 28 2009, 09:23 AM

Call a banker, tell them u buying this house. Wanna know how much is the market value and the loan that you are eligible to obtain. Ask them to call u back within 5 minutes

Kautim .... 1 phone call and 5 minutes waiting time .. u get your value

I would not trust the market prices that the agent quote...especially if the agent has a vested interest to close the deal. Remember the agent is representing the seller (not you) and is not looking out for your best interest.

You can get market prices from a valuer. If you are getting a bank loan, you'll need to engage the bank's panel valuer anyway. Call up the valuer. Most valuers will give you an indicative price if they are familiar with the area before they even do the site visit for the valuation

This post has been edited by gilabola: Apr 29 2009, 06:10 AM

lwb,

I second that opinion. The TS had not done enough homework to make this purchase.

Dreamer

He learning, should point him to the right direction.

Just my opinion.

There are good agents as well as bad one.
To find a agent that represent you, ask the agent "do you represent buyer?".

Asking more than 1 agent would give a more accurate price.

Hmmm...thanks for all the input. After my last post, i have engaged a lawyer in this matter. They told me to hand them the cheque and they will deal with the seller's lawyer. Before I handed over the deposit to the seller. Which was a good thing.

I have been to about 10 banks to inquire about housing loans. And on the spot they called the evaluators to get the market value of the house i intend to buy. Apparently, the house around that area only values up to 430-450 max. Does this means that the agents for all the houses around the area are pushing the price up? After finding this out, i called my lawyer to withhold the transfer of the deposit.

Now i am quite stuck in a dilemma, we love the house but since getting to know the market value. It sort of held me back now. There are 2 banks that are willing to give me the applied loan based on the selling price.

Any opinions on this?
thanks a bunch

Negotiate the price down to the market price.
If you really do know what is the price.

At most you lose your earnest money if you don't want.

This post has been edited by jasonhanjk: Apr 30 2009, 10:43 AM

lwb,

market value=transacted value? is this caused by the last house sold in the area with a particular price, which set the margin for the market value?

when i met with the seller's cousin, apparently the owner has already migrated overseas....we agreed on the selling price on the next day...and from that day onwards the "cousin" was very pushy about the getting the deposit ASAP. I almost gave the deposit but decided on engaging a lawyer first. The "cousin" almost flipped. Which did not give me time to get a pre-approve loan. Now i know y the need of a pre-approve loan, it's to get the property market value and whether i am eligible for the loan.

which came back to my post above.

thanks for the input

---

Added on April 30, 2009, 10:45 amthe earnest money is the deposit rite?
I had already stopped the lawyer from transferring the money to the vendor's lawyer....and have not signed any letter of offer or what not yet. Will i still lose the deposit?

and i doubt that the "cousin/agent" would want to budge from the price to come down to market price.

thanks

This post has been edited by WildChai: Apr 30 2009, 10:49 AM

Did you pass the money earlier to the agent?
That is earnest.

Nope, i passed it to my lawyer...my lawyer will transfer the money to their lawyer.

Oh? you passed the earnest to your lawyer? Usually buyer will pay earnest to the agent as booking, and that money is paid as their commission. Am I right?

Wow, your agent really lack of experience.

If you didn't pay to agent, you have the bargaining power to reduce the price downwards. Since involving your lawyer, if he didn't do any paperwork, I doubt you will need to pay him much.

First - and only - thing - are you willing to pay seller's price for the house???

If you are not (and it sounds like it), walk away from the deal or negotiate with seller for lower price.

It doesn't matter whether bank/valuer/agent says this house worth $$$, if your parents/grandparents/brother/sister stays next door wouldn't you pay extra $$$ for the property?

As always, buying a house is a willing buyer/seller agreement - both agree on a price. It doesn't matter that the house next street is selling above or below what you've agreed on - it all depends on whether you are WILLING to pay that amount for that property.

So in other words, we can actually bypass the earnest to lawyer and still sign booking agreement?
hhmm.. but after signing the agreement, we still have no power to bargain further as it's stated black and white.. correct me if I'm wrong

I must have been sending the wrong signals....i was taken aback when i heard about the market value of the property.

But I am willing to purchase the house cos the area and we really love the house.

True of what cwtien says...a person will buy even an expensive property above market value if they are willing and think it's worth it.

You still can bargain if the other party is willing to, even if you had signed the agreement.
Expect them to give you black face.

Personally, I would not pay RM 480k for a house whose market value is around RM420k, no matter how much I like the house. A house is a big investment, and we must not let emotions cloud the decision.

Unless the area is very hot, there is is limited supply, and you expect prices to go up fast, do not pay above market value .

Since you have not paid the earnest deposit, negotiate further until it is close to fair market price.

The RM 30-40K you save from lowering the price...will go a long way towards renovating and furnishing the house, so negotiate for all its worth!

This post has been edited by gilabola: May 2 2009, 02:28 AM

Agree with gilabola.

Say what u like - when u buy a house for own stay / investment - it will still involve equity build up over time, coupled with hopefully a decent rate of appreciation.

Why on earth are u screwing yourself over by paying a higher "entry" price - no matter how much "you love" the neighbourhood? My 2 cents - you have become a motivated buyer....this is a position you DO NOT want to be in. Yes - it's a willing buyer & seller basis - but u do not even realise that u r signing up for an inequitable deal, because u r so vested emotionally.

If Pai was the seller of the house you wanted - he'll clean out your bank account nicely. And you still think that this is justifiable under a so-called "willing buyer & seller basis"? Even though 40K to 50K may be chump change to you....take your time to think through rationally, chief.

I agree too.
Getting entry price so high and fork up another amount of money for renovation (as different people has different taste), will get you hard to sell it away in the future. You may say you love the house and wish to stay forever, but who knows in the future?

this is concept of "marked to market".. a concrete house value can only be grasp with an actual transacted deal.. hence the concept of "willing buyer, willing seller"..

should either one of them don't agree with the price, the deal is off.. however, marking to market happens at a given time.

of course there're silly deals ("gosh, i so love this house that i'm willing to pay 1 million even if it's worth $420k"... does happens). and naturally, a shift to test a new price will emerge.

of course.. an irrational "willing buyer" does not represent the entire market and soon enough, the market will identify the $1 million as an anomaly.. fluctuations and gyrates back at the sub $400k range.

but all these have nothing to do with a pre-approved loan.. (as you've found out.. it's a good sanity check, it's like having a gate-keeper to remind you, should you someday take that $1 million silly deal.. even though you can afford it.. the bank will still "sound" you a bit then let you pass..)

if you're a bit tight on fundings.. pre-approved loans will help you lessen the probability of loosing your earnest money/deposit just because you failed to secure the loan facility later on..

oh, one more thing.. when money is passed from lawyer to lawyer.. ask them about the escrow account.. (this is not some left-pocket, right-pocket hanky panky account)..

lastly, i'm glad you learnt something, even though via unpleasantness. the best teachers in life usually come disguised in retrospective forms (e.g failures, mistakes.. fubar-ed!)

.. a true one on displaying too much interest revealing oneself as the motivated buyer/seller. for there're many barracudas lurking around for distressed situation (.. i'm one of them )

thus the ability to appear indifferent can be an advantage.. you may like the asset concerned, but your body language appears to be neutral.. agents are taught to sniff/detect such body languages.. and caters to the situation. an indifferent demeanor makes it hard to read you.. a good place to learn this skill is take an observation tour at a casino.

well, on the bright side, you can treat your "premium" paid to the house as some "tertiary education - from the school of hard knocks in investment" and remember it dearly for the rest of your life.. a $40k-50k is definitely worth paying if can help prevents a $4-5 million mistakes down in the future!!

... if you happen to take in too much loan.. one barracuda will be trailing you closely *lol* (remember your sanity check)

This post has been edited by lwb: May 7 2009, 12:14 AM