Hi all,

Asking for family member.
Currently they have try to ask around for buyer, no buyer interest.
There's multiple unit on bank lelong and also many units sells below market price.

This just example
The leasehold property initial price is 1 mil. Loan at 900k
Bank lelong around the area unfurnish 800k, online property price tag around 800-850k.

Urgently need to dispose this property. Due to not able to coop with it.

Few question,

1) if the property sell at loss, how does the offset amount been paid? The bank will still give another loan for that offset?
2) it's RPGT still in effect if sell at a loss?

Appreciate the answer

I think the bank will not lelong at loss but to recover the loan amount from previous owner. Your loan will be new chapter.

icemanfx

When lelong at loss, you still owe the bank the balance amount. It just didnt disappear away.
Next they will placed caveat on any other existing asset under name and worst case they just file suit for bankruptcy action against you

RPGT not applicable since there isnt any gain. Real Property Gain Tax is gain differential between previous SPA price and new agreed SPA price.

This post has been edited by VireCwx: Mar 13 2023, 08:36 AM

Try to sell it on your own by nego n lowering price before it masuk lelong

Masuk lelong adi its buyers market n the true price buyer willing to pay

Which property is this? KL area?

Thanks for quick answer.

So meaning if property sell at loss. They will find ways to take back the loss but not offer another loan?

Can't, that area not very attractive. There's many lelong unit. If I understand the correctly here.( Any unit sell below market price is lelong?)

With the urgency of disposing the unit, lelong is the only way

Lelong means u default banks monthly payment isit

Good luck if many lelong units means those sifu buying lelong will wait for even attractive price drops

Prepare

They will send another letter notifying you about the balance amount you still owe them and dateline to settle balance.
Failing to settle will incur charges and interest along the way which will accumulate and balloon into bigger amount.
You will need to find ways to settle the balance.
Either take another personal loan(highly doubt sufficient and cost effectiver since big amount and shorter installment period) or from family and friends.

if loan balance 900k, property lelong at 800k, you have to immediately pay the 100k different in cash.

usually bank lelong means you didn't pay the house many months. the bank reposes the property. your credit score is gone case already, cannot take loan anymore and blacklisted by the bank. then they will lelong the unit. if u owe 900k, and the lelong only sold for 800k, you still owe the bank 100k. you need to go to the bank and talk to them about repayment plan. during all this time you can't take any new loan because credit score is basically gone case.

Thanks all for the quick respond

And to clarify. Property haven't lelong. Just most neighbourhood property here all lelong.

Just in desperate means, family member willing to go as lelong price.

So from what I understand. Meaning we can negotiate with bank after the house is sold and ask for repayment plan?

This post has been edited by munak991: Mar 13 2023, 09:02 AM

no tax

you can finance or pay the difference

simple

Ok, 👌
So to finance the remaining.
What kind of loan usually bank will offer?

You can forget about the repayment plan if it ever offer
It's not gonna another 30 years with housing loan interest.
Just simple maths
Based on RM100,000 / 12 = RM8,333. That one havent calculate any additional charges.
If cant handle the current payment, dont even think about the repayment offer if it ever happen.
The period is just 1-3months during the transaction period of tranferring the title from one bank to anoher bank

So meaning....even if the loan is settle the repayment gonna be very short...?

Yes, since no more collateral for this repayment offer.
The house already auctioned off.
Imagine for loan with collateral with 30 years repayment of low interest yet debtor not able to service, bank will not risk further.
You better off sell through agent or ownself.
Once in lelong, you are at the market's mercy.

Your property title is with Bank A.
Buyer B and Bank B will need your title to be discharged and recharge d back to them.
You cant discharge a title when there's still owing balance. Worst case the bank will use their own reserve to pay off the balance in order to proceed with process.
That's where you will get charge for interest since it uses bank own's reserve to offset your balance owe amount

Ok, this is the real answer I wanna hear.
So it is slim bank offer repayment? How it is bank will offer repayment plan instead?

I guess this is the last choice, this need property agent to handle the advertisement....

Which bank are you referring to? A or B?

No RPGT if seller sell the property at loss since there is no profit.

If the selling price is less than the seller's existing bank loan, then seller has to pay the difference to the bank in order to complete the transaction. Except for personal loan, I don't think bank will give any loan to seller to pay for the difference as there is no security / collateral

Bear in mind, seller still has to pay the agent 2-3% commission (if agent managed to find a buyer) and the lawyer fees etc. In the meantime, seller has to continue to pay the monthly house installment.

Ya, we know the problem...
but 1mil vs 200k and also versus bankrupt

willing to take that jump

Bank A.

Bank B will release loan amount based on whatever Buyer B take.
Balance between TS and Bank A, TS need to settle by themselves.
Since Bank B already done their part, Bank A need to facilitate the process in order to complete the transaction.
This is including using own reserve to payoff the balance so the title can be discharge.
However this would incur interest for TS since it's bank own money.
Thus the your hope for repayment plan aint gonna work.
It's gonna be lump sum payment TS need to pay.

TS wont able to to bargain since there's nothing to leverage anymore as the house already auctioned off.
Under risk management, no collateral means shorter period tenure and higher interest to mitigate the risk
plus with further risk of deteriorating repayment capability.

TS, the relative wish to continue to own and stay the house? If yes AKPK is one the best alternative to nego a repayment period.
However do bear in mind, once agreed, you cant miss a single payment or else it's void.

From my understanding, it seems the house is high commitment to continue stay on since dont even mind to dispose at losses.
But beware, even own selling with losses, the problem still wont go away as the differential balance still need to pay.

Awesome and clear explanation.
Will take all the explanation and consider our next move.

Really appreciate the explanation. In the web, there's none that talks about selling property at loss.
There's none talks about repayment option.

On this, relative will vacant the house. cause unable to pay anymore.

However is there chances to nego with bank? Before the property even decide to sell off? Not lelong

This post has been edited by munak991: Mar 13 2023, 11:21 AM

But why would Bank A discharge the property at RM100k out of pocket with no collateral in hand?

What I meant to say was say that a person buy a 500k house. Paid for 100k already but then cannot continue. Bank will lelong min at 400k just to get back the amount (or maybe less a bit). New buyer purchase with new loan. Ban still make profit regardless because you are now paying 400k + interest. Bank always make make

Simple, everything is agreed before proceed from all parties (Bank A, TS (can refer back to your own loan agreement), Auction House, Bank B)
One must understand every transaction between 2 parties will not/shall interfere another one along way.
If one notice, all this involved the most important element which is time.
All involved is clearly stated of time frame to complete the transaction within certain period of time agreed.
Failing to do so will incur financial losses which is interest which need to bare by whoever involved in the delay (usually chorology will be raise to pinpoint the culprit)

In lay man term for such situation, with court order that Bank A role is upon receiving payment from Bank B is to release title.
This is an agreement and understanding between Bank A and Bank B on auction property with court order.
Whatever shortfall. it's Bank A role to settle by using in house or third party debt collector, placing caveat on other existing asset, or file for bankruptcy action.
These are the ways to recoup back with no collateral in hand.
Imagine Bank A doesn't use own reserve to complete the transaction, Bank B wont able to charge title, Buyer B wont able to stay on the property
which eventually everything in stand still and disrupt the cycle.

Remember this is a Bank, not a property agency or developer.
They don't need your property nor they want it either. It's the transaction along the way brings the value to it.

a form of personal loan

just take it

you can pay in advance the principal whenever you have cash and that will reduce any interest greatly. Good to buy time.

Good strategy as well, as you no longer paying for bleeding property loans, maintenance etc.

Easy
1. No
2. Yes but nothing need to pay lo…withholding amount need to check with lawyer

Since on lelong means not able to pay, i dont think bank will still give loan anymore. Which bank will take risk?

Ofcourse he/she can try nego with bank for monthly payment, or if got other property can refinance and use the money to pay.

Else last resort is AKPK

have ur family member go to akpk? they can help to restructure the monthly loan repayment thus it will be lower. then get an agent to sell it at above lelong price, 900k maybe? so ur family member loss will be minimal. can pay it lower every month while waiting for the agent to get any potential buyer. because if the area is not hot area, it will take time, this is just to minimize the loss. hope this suggestion helps.

Yes, agree

Depends on what you have in hand….you can refinancing another property to clear the balance amount…

Ya, hope bank will offer this...

This, don't know how, lawyer also another fee

Not yet lelong. Just cannot sustain already.
Ya I think going for AKPK d

Will advise them to talk to AKPK

Thank so much guys.
Now I understand the many option

Still owe maintenance fee? This one need to clear off too.

not condo, landed lease hold, maybe got some maintenance fee too

hi bro,

if they really end of road, my advice is go to AKPK, let the Bank Negara / our Government to help them.

peace of mind so that they can focus and carry on with their life normally, but of coz, they will lose all loan capacity until AKPK is settled.

if they really no other option, this will be a very good option to reset their financial.

ya. i also advice the same, why struggle with life, let the government help them.

Just hope everything is fine.
Definitely will go seek AKPK.
Just don't want other family member worse case declare bankrupt or insolvency. And their entire life is ruined

As ts is unlikely to sell the poorperly at or about the market price quickly; If ts is serious to dispose of the poorperly quickly and outstanding loan value is at or below market price, could consider to sell at about outstanding loan value. whatever paid to bank earlier would be losses. at least need not to pay more to the bank.

He is already expecting to sell below his outstanding loan.

I wish to add on another point for clarification.
This is only applicable for auction situation under court order.

For own selling property below the loan outstanding amount and need to top up to clear the balance, the bank WILL NOT help any offer any repayment loan or use own reserve to offset it.

You are digging another big hole as this would affect a lot parties.
The SPA agreement with the new buyer will be call off eventually since you are not able to pay off the remaining balance.
Lawyer fees, stamp duty, time and extra unnecessary frustration to existing problem

Don't simply make decision without knowing the consequences. Innocent parties will be affected including yourself.

Ya, use AKPK, to buy time and space:

1. pay minimum monthly payment for the next few years,
2. wait for the property market price to come back (after2-3 years, price should goes up x%),
3. then sell it off.

I just hope they have the $$ to pay for the next few years or even months.

???? Take what jump?

1st, What is the outstanding balance in the house loan?

The lelong prices are just indicators on the market prices. The real market price is what you get in the actual sale.

Lelong means auction. You can also sell by means of auction if you want to sell in a hurry.

Selling at a lost... it means selling at a price lower than the purchase price. It doesn't necessarily means the selling price lower than the outstanding balance. (What's the outstanding balance?)

If really cannot coup due to different financial situation now, and must sell the house; better to do it quick rather than delaying the inevitable... as interest cost will accumulate over time.

Yes searching for agent to sell the property

https://www.mdi.gov.my/index.php/home/faqs/...s%20been%20made.


Another perspective... no big deal ..being bangrupt..
Automatic discharge from bangkruptcy aftsr 3yrs if fulfilled certain conditions..

Better conserve dwindling household cash than spend ot on lawyrr fees.. instalment ... etc..

No ill intention here... bangkrupt is not dearh sentence

Yes, bankrupt is an option for the family.
If the loan is on individual then it's ok . One person bankrupt, rest of the family is funding the bankrupt individual.

But now imagine most memebers in the family is the loan borrower and garantor. All goes to insolvency, how they continue?