Hi everyone,

I got a very noob question here. Let say i bought a property for 100k with 30years loan. After 5 years, I wanted to sell the property. But market value is lower, say 80k. Within that 5 years its safe to say that i only managed to pay the interest only. So if i were to sell the house at at a loss of 80k:
a) Do i need to pay the bank the remaining 20k + whatever the interest is?
b) Do i need to pay one shot or is there any arrangement for a loan instead?

p/s: noted that there will be other costs, such as lawyer fee etc. Lets put that aside at the moment.

Assuming you borrowered 100% or purchase price, after 5 years the principal outstanding will be about 95k+-.

If you sell at 80k, then you need to settle differential sum before the bank can release the charge on the property. In other words, the buyer will not receive title to the house until the sum is settle.

If you have problem regarding the settlement, you can approach the bank or other banks for a personal loan subject to approval.

Do it before you sign the Agent's Sale Letter or SnP, otherwise you are liable for damages if you cannot complete the sale.

Thanks for your reply.

I dont quite understand the SnP part. Without the SnP signed, I am not going to get the 80k from the buyer right? I mean the flow should be sign the SnP, get the 80k from buyer, pay the bank + settlement. Isn't?

Or do i miss out anything?

U need to park the shortfall at the law firm in advance

After SnP, you have to settle the differential sum first and the buyer bank will then pay the 80k to your bank to redeem the title.

Check with your bank the outstanding b4 signing any documents for sale

Ok, it's getting clearer. So the SnP is going to be the main document to show my bank that there are buyer for the property + the 80k is already guaranteed? I do know that the law firm will hold the shortfall first, and they will pay it to the bank.

Thanks for your help!

You can always buy a ready standyby cashier order in favour of your bank and deposit it with the lawyer. Avoid dealing in cash.

Just rm20k plus some penalty if any