My daughter has just booked an under con project at RM 520k with her bf. This was last week.
Agent just informed that they need to sign Spa even though loan has not been applied yet.
Is this acceptable ?
What are the consequences if loan is rejected later.
Booking fees is RM 3k.
Zero D/P.
All legal fees are bourned by developer.

Pls advice .
Thank you

you can actually drag the S&P signing for a few weeks. give various reasons like on holliday etc. can buy you up to few weeks.

and reason why you want the loan agreement to be sign together is to avoid headache of rejected loan. Unless your loan supporting documents are weak, dont need to worry about rejection.



this are all based on my personal experience.

strictly speaking application of loan is irrelevant to signing the SPA.

If the project is selling like hot cakes, developer may enforce this to its fullest extent.

However in practice usually developer will give u a reasonable time frame eg 30 days to get the loan approval before signing the SPA.

For under con residential project, if the SPA has already been signed and stamped, the developer can only forfeit maximum 1% of the purchase price if the buyer manage to show developer loan rejection letter.

From ur daughter's scenario, her 3k may be forfeited if SPA signed n stamped but fail to obtain loan (since it's zero downpayment).

In my opinion, sign SPA after loan is approve is safer.

Also right now everybody know there is overflow of properties in the market. So no need to be in a hurry to sign SPA.

Thank you so much for the reply . Yes, Ive told them to submit docs first and delay signing.

Noted with the good advice. Thank you.

[quote=cavaliars,May 14 2018, 04:33 PM]
In my opinion, sign SPA after loan is approve is safer.

Also right now everybody know there is overflow of properties in the market. So no need to be in a hurry to sign SPA.

[/quote

Yes, Spa can wait. We will not be rushed by them. Thanks.

Thank you so much for the reply . Yes, Ive told them to submit docs first and delay signing.

There are instances where developers would allow you to sign SPA first and pay the booking fee while waiting for the loan application, and if rejected, will fully refund the booking fee. Did the developer say they will refund 100% if loan rejected?

Hi, thanks for the feedback.
Yes, that is correct but I need to check with them later on that.
Sometimes, better not to just listen to what the agent says.
Need to get the factsheet that says 100 % refund on loan rejection.

What i did is include that line in the offer letter (mine is subsale btw)..
100% booking fee refund if loan rejected.

Btw since now changed Gov, is there possibility of property price will be lowered?
Is that why developer urgently ask buyers to sign SPA to lock in the price?

For subsale yes, one can state a condition that earnest deposit will be fully refunded.

Not sure about price reduction , haha. Perhaps, developer are just scared of cancellations.
Thanks.

Yes, terms and conditions in the documents must explicitly state this or risk deduction or complete forfeiture of the booking fee. All the best getting that loan.

Thanks a lot

there are cases where bank did not approve 90% loan, and they slashed their margin. there are also cases where bank approved it at higher interest rates. In these cases, buy or not buying? Why risks yourself?