Hi Micheal, great advices that you are giving here. Keep it up.

just wanted to say thank you to michael for his valuable advices...

If property has a lot of caveats, who is going to pay to remove them ?

The bank or the new owner ?

jalstrix.. did u read through page 1?

there's alot of information discussed there which is very helpful..

as for your question...winning bidder

Page 1 say if do land search, there is a caveat, cannot get bank loan.

But didn't say who's gonna pay to remove the caveat.

I just ask my friend, he said most auction units got at least one caveat.

So what's the point of doing caveat search before auction ? Waste of money.

Might as well do search after win the bid.

This post has been edited by jalsrix: Apr 16 2012, 09:45 PM

Yup, agree with you that Michaelle has been very helpful with his tips. Read all the posts from Page 1 up to your post and kinda felt it is unfair someone is p*ssed at his tactful reply. Oh well.

We are cracking our head on how to buy a 3rd property without paying the 30% downpayment too!

Appreciate any advice/tip, it goes without saying cash is always king, just wondering if there are any leeway in this!

haha..read from page 1 until the last page buddy =)

out of 10 auction maybe 1 may be worth bidding... its a number's game..

Michaellee... when can i buy you a meal? it would be my pleasure to get to know u as a friend and learn from you abit on property investments.. =)

Hi, thank you for your support. Just one point to note, as with all my other advices, this is not the season to build up debts. If you asked me 3 years ago, I believe the challenge would be to see who has the highest debt (ie, will make more money). In a cloudy environment like the one we are facing right now, it is good to make sure you have enough savings to see you through at least 6 months of bank repayments. Cheers!

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Added on April 17, 2012, 8:09 amIt is not the bank job to check if someone has avoided income tax. In fact, if any, your friendly local banker will offer you advices on how to get loan if you have evaded or under declare your income.

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Added on April 17, 2012, 8:11 amI don't do searches anymore though I do not recommend this to new investors. The reason for me is simple. Caveat can be remove, but it does take time, so be prepared to pay 100% but having said that if you have paid for it 100% then to get refinancing, then your interests are not tax deductible. But you do need to look out for government caveats and normally agents who wish to do my business will warn me enough without having me to go do a search.

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Added on April 17, 2012, 8:12 amThe only factor in delaying a high court auction is the auctioning bank and their failure to give proper and relevant documents on time. All others are standard and should be done quite quickly by your lawyer.

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Added on April 17, 2012, 8:36 amThe bank holds the title and a copy of the FACILITIES AGREEMENT. SPA has nothing to do with the bank. In the facilities agreement which you have signed (obviously favouring banks), if you default, the bank has a right to increase interests. And ultimately in some cases, these interests compound and makes it impossible for some to pay. Once the property goes into NPL, then the bank will need to apply to court via their solicitors (not necessary the lawyer that prepared the facilities agreement) to auction off the property. Only the court can grant the bank the right to auction and also only the court can call off an auction. No one else can.

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Added on April 17, 2012, 8:42 amThank you all for your kind remarks.

When bank negara places LTV of 70% it means that there is something really wrong with our property market and hence the need for a cooldown. My personal believe has always been that there will be a need for some correction as the property market is no longer serving the mass market. The majority of the salary earners cannot afford a simple roof over their heads. Hence the need for the government to come up with some radical policies. For most of us who has not witness the 97 crisis, should speak to someone who had invested prior to that crisis and get a feel of what had happened. What is happening now seemed to be mimical to what has happened then. In summary, my advice is not too be too "greedy" and overcommit in such market. I do know the ways to play around but yet for all the loans I have signed up last year and this year are all in the 70% (and more recently 60% for company loans). Alternatively, you can move to commercial properties for higher margins.

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Added on April 17, 2012, 8:45 amFor the current market, the best properties worth bidding are not those that are 30% below market value. Try to get those which are around 10% below market value as they offer no competition and you actually get something cheap. For those 30% ones, you attract the whole china into the auctioning room and with emotion very often it is pushed above market value. I have given up on hot properties except those in 7 figures as there are ways to make money as long as there are santa clauses. And yes I do believe they exist.

This post has been edited by michaellee: Apr 17 2012, 08:45 AM

If you can pay cash, then why would govt caveat bother you ? Govt caveat takes a longer time to remove but eventually it will be removed.

As long as you pay cash, you can move in already. So what's the problem here ?

Government caveat is a different ball game and only the government can remove the caveat. Having paid cash like I mentioned above would not mean you are already the registered owner. You need the property to be transferred to your name before you can rightfully and legally move in.

I'm a newbie as far as property auction goes and have 1 nibbling question :

Say I'm not able to service my housing loan and the bank decides to auction off the property. If the outstanding balance on the loan is less than the auctioned price, will I get back the difference between the loan outstanding balance and the auction price (after deducting auction/bank expenses)?

Yes. You will get the balance back. But bear in mind, there are a lot of expenses incurred in auctioning off a property so please do not be too optimistic.

i agree with @michaellee.

If the difference is not much, you might get rm 0 or end up paying xxx fees and xxx interest to the bank.

If the difference is big, you end up getting peanuts or less than what you anticipate from the bank due to xxx fees charge by the bank.

So yeah, dont be too optimistic.

So, the moral of the story is : The bank is always the winner.

i agree that 3 years ball game vs current market is always different.. we always say its expensive..but due to the RM500k minimum cap for foreigner to purchase a property here...a singaporean client of mine bought a unit in KLCC area for 1mil last year...and he says he can only buy a HDB flat in singapore after conversion.. and many people with cash buy because of lifestyle..its not an issue for them

but its always running in my mind..to either invest for passive income on rental..or cash out out for capital gain and reinvest again..i guess im not that high risk taker for the latter option.

commercial is always nice to go in..but high risk high profit.. 1 time burn will probably cost me bankruptcy.

Michaellee, what's your take on the upcoming GE? if BN stays or opposition rule...what u think could happen to our real estate sector? certainly i was too young to even know about investment during 1997..

Banks = "Legal" Ah Long.

I do not really comment about politics as lowyat has some really tight assed people who loves to discuss politics as if they are Najib's personal aide. So will be refraining political talks for the moment. Cheers!

big brother is watching

Hahaha, I am not that afraid of big brothers la. Semua boleh diselesaikan. It is the herd mentality (especially those working in singapore) forumers that are beyond discussions. Everything about Malaysia is bad. Everything about BN is bad. Everything about Singapore is good. Everything about PAP is good. Personally, my believes are simple. My one (two if you consider state assemblies a different thing) vote will go to whoever I feel at CURRENT situation best serve my interests. I can be a greedy businessman, but I look after myself first.

If you look at DAP's Penang, is that the model we want? What about PAS's Kelantan and Kedah? Would you be happy under that system? And PKR's Selangor? What about BN's Malaysia? If you asked me seriously, malaysia's fundamental political system is very flawed as legislators and executioners and enforcers are all bundled into one. If you have good separation, it will be good for all. Having said that, though politics play a role in property prices, I believe our current situation, it is more of a global effects and government policies of a free system that would have the greatest impact on properties.

Taiko,

if you want to talk about politics, please discuss elsewhere.

This is about auction properties, please give more advice on what to avoid and know all the tricks

The best way to learn the tricks is to experience the auction yourself. Please understand that many of these tricks are not appropriate to be discussed in an open forum.