Saturday, September 24, 2011

Auction property procedure and risk

Ok, let me share my real experience on my first ever property auction. It all started when a  collegue of mine told us that he already own 3 auction poperties which for me is amazing. I mean, we were at the same age, and yet I have not own any property. So, I started going through some related blogs, asked around and talked to these experience people.






Basically, what I did was look for through lelongtips.com. I set my target (which was to go for prop cost less than RM 50k) and plan which area that I am interested in. Of course, this shall take time for you to analyze and think what is the advantage of the area; i.e. near with LRT, near to highway, near to education instituitional etc.  Then, I go to property.com (you can go other property website too) to determine the market value of the property. The bigger the difference between the asking price and the markte value, of course la, better, kan? Because, on the event day, you will learn that this difference will become reduce since others will bid to their targets pulak, which mungkin lebih tinggi than you expected.

Ok, now you have spotted the prospect property.  Next, is to call the auctions bank or appointed company/agent to get the Proclamation of sale (POS). From this POS, you would know what is the status of the property, least ke free hold, auction venue, time and date, bank auction, ada caveat ke,apa ke. Sbb kalau ada caveat, susah skit bcoz caveat means there is/are other party (s) yg menuntut hak ke atas property tu. Dont ask me the details of this thing, sbb I have just learn abt it too,hehehehe! Nnt if I ada more knowledge on this, I'll do entry related to this.

Next, is to go to pejabat tanah and majlis perbandaran to check outstanding fees for the property(Strata property takde cukai tanah,ok? So, just check cukai pintu @ majlis perbandaran). I was lucky though with the Puncak Alam's property since there was a reminder letter of the outstanding fees at the letter box, on the prop's cukai pintu. On the maintainance fee, you have to check from the maintainance office.

Actually, you can skip all this hassle by hiring agents. For this part, you have to get a very trustable agent. But again, it is yr choice to do so, sbb at the end of the procedure, you have to pay this agent. So, you must ask the agent's rate (the Puncak Alam agent charge us @ RM1.5K-to help us to do the bidding/ RM 2K-facilitate in the arrangement with lawyer+bank).; that is if you win the the bidding.

Owh, do not forget to go and have a thorough inspection at the property. FYI, ada byk situation when it comes to inspection of auction property.

1) The house is empty, no tenant, abandoned- Macam ni, kira ok la.Sbb you have to understand, with auction property, no one has the key to the house. So, kalau pintu tak kunci, you can go in. Tlgla bawa companion, it is dangerous utk inspect alone, esp if you are a woman. For all you know, ada drug user in the house ke, bad people ke, apa ke. So, kena hati-hati. Kalau kunci, you can only inspect dari luarla..You can only enter the house once you menang bid, sign the contract, bawa mr locksmith utk unlock the door, yourself.

2) The house ada tenant, and the tenant is the owner- Hem, mcm ni,susahla kan?How are you to halau the owner from his house (on law, it is no longer theirs) if you were to win the bidding? So, you might want to reconsider on investing for this property. Unless, you rasa you can nego with the owner to sewa from you later, or blh minta baik-baik for him to leave.

3) The house ada tenant, and the tenant is renting the property- I guess this is,lucky you! You win the bidding, dah ada org nak sewa property you ;p Tp, nnt you kena la nego dgn dia, the rental pay, contract ke,what not..

Now, you dah inspect and analyze the pros and cons. Decide to join, pergi bank, buat bank draf 10% of the price that you target. I.e asking price @ RM 49K, you nak bid smp RM 55K je, sbb market price is around RM 75-80K. So, your bank draf RM 5500 under the auctioner bank. Let say, at time of bidding, you feel like to go more than your bank draf, you must pay the difference (if you win) on that respective day jg.

Basically you will have 90-120 days to settle the contract (auction prop tak guna SnP) + loan with bank. Please check with yr POS.

So, roughly, that's abt it la. Takla susah sgt pun,kan? =)

Ok, capital plak. So, from my calculation, you have to prepare capital for this:

1) Outstanding maintenance fee (for strata prop)- if the prop is going thru a first time auction, usually bank will bear this fees.
2) Cukai pintu (both landed and strata prop)
3)Cukai tanah (landed prop)
4)Fees utk sambungan semula air, elektrik dan tunggakan (biasanya dua-dua ni reach 500, TNB potong dah)
5) 10% bank draf
6) Agents' fee (if aplicable)
7) Lawyers' fee (for contract and bank loan agreement) which runs abt 5-10% of the prop price

Sounds handful sgt,kn? That is why you must really plan your auctions plan. Because for all you know, these properties are good investment, especially if you really get price so much lower than the market value. And that is the reason why I bid for prop less than 50K =)

Ok, now to the risk.

You must learn that every investment owns its own risk. Org jual mknn, mungkin basi, org jual baju mungkin tak laku etc etc.

1) Risk during bidding: If you mmg dah sgt syok with a property, sometimes we tend to bid more than we expect, or plan on the first place. You must know that ada certain auctions, ada golongan yg dipanggil ULAT. I am not really sure abt this since I have never encounter one, but from my readings, these ULATS akan kacau bidding you, so that you will increase your bidding blindly. You angkat, dia angkat, you angkat lg, dia balas lg. Sbb tu you must be firm dgn your own target. Others plak, ada ulat yg tlg u by making sure takde org lain akan bid for the unit. So, you pay them for that. I dont whether legal ke tak, tp rmi je yg buat

2) You have closed the deal: You pun pegi prop tu, sbb you have already the contract saying the prop is yours. Bawa mr locksmith, buka pintu. Kalau kosong, takde apa-apa, just some minor kerosakan, takpela. But if, masuk2, ada benda/org/keadaan yg tidak dijangka, you have to bear the consequences. Nama you dah ada under the prop, apa2 pun bank akan cari you. So, it's a lost la kalau prop tu ada masalah utk dijual/disewa, what's more you are not planning to stay kat prop tu pun..

3) I have read from some other bloggers the prob with current ppl yg join auction is that they dont have proper preparationa and ilmu before going. At the end of the day, deal is closed at market price sbb semua mcm naik `sheikh' bidding, tak tau bila nak quit. One thing is that kalau u dpt blk market price, mmg rugi. lagi rugi drpd beli property biasa. Sbb jgn lupa you kena tanggung duit outstanding yg byk for an auction prop. So, jgnla segan nak bertanya dgn org yg experience, then baca la blog2 individual yg mmg kaki auction, mmg byk blog related to auction prop.

4) Loan tak approve- Hem, mcmana ni? If you cant really settle this, rumah mmg akan terlelong blk,ok? Or else, if you request utk extend, you kena byrsome amount of interest. You have to remember, mesti follow up dgn lawyer, sbb lawyer bkn handle hal kita je, punya bank file kt lawyer firm tu kdg2, diaorg terlupa (trust me, I worked there for 3 monthsm ;p)

4) Tak berjaya sewa/jual: Ala, ni biasala..you cannot expect return investment in one day time. Teruskan buat marketing! Hahaha!

Anyway, i think that's abt it la. Ini info org biasa2 je, bkn pakar,heheeh! tp blhla nk buat panduan permulaan ;p

Kalau ada readers lain nak tmbh / betulkan pun takde masalah =) I am more than honor..

Hanie

p/s- Summerville @ Ukay Perdana selling @ RM 400-500 K 2 1/2 terrace house..Cekidaout!!

2 comments:

  1. seronok ronok la baca blog hani...tq for the info!yippie!!!

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  2. My pleasure! =) Tp, siapa ni ek? Hehehe!

    ReplyDelete