Complete Guide to Property Transactions in Malaysia

Introduction

Buying or selling property is one of the largest financial transactions you'll make. In Malaysia, the process involves multiple steps and legal requirements. Understanding what to expect helps ensure your transaction goes smoothly.

This guide walks through each stage—from finding property through closing—with practical tips for both buyers and sellers.

Stage 1: Finding Property & Making an Offer

The process typically starts by finding a property that meets your needs and budget. You or your agent will review comparable sales in the area to determine a fair offer price.

Once you've found a property, you'll make an offer to the seller. This offer should be in writing and include the proposed price, any contingencies (like financing or inspection), and timeline for closing.

Key considerations:

• Offer price based on market analysis
• Conditions you need (financing contingency, inspection period)
• Timeline that works for your situation
• Earnest money deposit amount

Stage 2: Acceptance & Earnest Money

When the seller accepts your offer, you'll typically deposit earnest money into an escrow account. This shows you're serious about purchasing and acts as part of your down payment.

If you back out without a valid contingency, you may forfeit this money. Conversely, if the seller cancels, your earnest money is returned.

Stage 3: Inspections & Due Diligence

Your offer likely included an inspection contingency. During this period, you'll hire inspectors to examine the property for structural issues, pest damage, and system functionality.

These inspections help identify problems that might affect value or require repairs. You can renegotiate terms or walk away if major issues are found.

Common inspections include:

• General home inspection
• Pest and termite inspection
• Electrical system inspection
• Plumbing system inspection
• Roof inspection

Stage 4: Title Search & Insurance

Your conveyancing lawyer will conduct a title search to verify the seller has clear ownership and the right to sell. This ensures no liens, mortgages, or other claims exist against the property.

Title insurance protects you against undiscovered claims. Most lenders require it before releasing mortgage funds.

Stage 5: Financing & Approval

If you're borrowing money, you'll finalize your mortgage application. The lender will appraise the property to ensure it's worth the loan amount. Once the appraisal is satisfactory and your financial information is verified, the lender provides final approval.

You should lock in your interest rate to protect against rate increases during the mortgage approval process.

Stage 6: Final Walkthrough & Closing Preparation

Before closing, do a final walkthrough to verify repairs are complete and the property is in the expected condition. You'll also review the closing disclosure document showing all costs and loan details.

Your lawyer will prepare closing documents and coordinate with the seller's attorney. You'll arrange funds for the down payment, closing costs, and other expenses.

Stage 7: Closing

At closing, you'll sign all documents, wire funds, and receive the keys. The conveyancer handles document preparation and coordination. Both parties sign deeds transferring ownership.

After recording the deed with local authorities, ownership officially transfers and you become the property owner.

Common Mistakes to Avoid

• Underestimating costs: Include closing costs, property taxes, and insurance in your budget
• Making large purchases: Major purchases before closing can affect your financing
• Skipping inspections: Always inspect—issues discovered later are your problem
• Not reading documents: Review everything before signing
• Waiting to get a lawyer: Hire a conveyancer early in the process

Getting Professional Help

Property transactions involve significant money and complex legal documents. A conveyancing lawyer ensures your interests are protected, reviews all documents, handles title searches, and coordinates the closing process.

The cost of professional help is a small investment compared to the financial protection it provides.