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Buying subsale property - all the details

 
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xinfull



Joined: 15 Nov 2009
Posts: 3

PostPosted: Sun Nov 15, 2009 12:56 pm    Post subject: Buying subsale property - all the details Reply with quote

I am buying a subsale property and have been gathering information from all the sources. I still have some doubts. There is probably no strict right or wrong process in a subsale purchase, but I'm trying to get the most reasonable and fair process.
Thank you in advance to all the gurus here for the invaluable advice.

My basic undertsanding for a "reasonable" base case process of subsale purchase is as follows
- buyer makes offer to purchase with earnest deposit
- vendor accepts offer
- buyer engages lawyer to draft SPA
- both parties sign SPA and buyer pays 10% of purchase price minus earnest deposit within 14 days.
- buyer gets a home loan to disburse 90% of purchase price within 3+1 months.

My questions ...

1. Does buyer need to engage a lawyer to draft the written offer to purchase?
My understanding is that buyer only engages lawyer after offer is accepted, to draft a SPA between buyer and vendor.

2. Any there any standard written offer to purchase template document that buyers should use?

3. To which party will the earnest deposit be made payable to?
3.1 Do we make the earnest deposit payable to the vendor's agent (negotiator)?
3.2 Is the offer to purchase a contract between the buyer and the vendor's agent?

4. Is earnest deposit refundable if the deal does not go through for whatever reason?
4.1 Should the buyer put in this refund term in the written offer?

5. To avoid any conflict of interest, should the buyer always engage his/her own agent to convey the offer to purchase to the vendor's agent?
5.1 In this case, are there any difference in the real estate agent fees payable by the buyer?

6. Do/Can agents use earnest deposits as their fee?
6.1 When should buyer pay the agent his/her fees?

7. Once the offer is accepted and a cheque for earnest deposit is issued, buyer should now engage a lawyer to draft the SPA?
7.1 How can a buyer "shop around" for a lawyer?
7.2 Does buyer simply call several law firms to get indicative quotes of their fees?
7.3 How does buyer use the bank's panel lawyers when buyer does not know which bank he will be getting a loan from at this stage?
7.4 Can and should the vendor use the same lawyer as the buyer?

8. For the SPA, does it make a difference whether the title is
8.1 under a master title or individual strata title?
8.2 under the name of the owner or still under the developer?
8.3 whether the title is leasehold or freehold?
What are the implications for each case?

9. When and how does buyer shop around for the home loan?
9.1 Is this done after SPA is signed?
9.2 Can buyer submit multiple home loan applications to several banks simultaneously?
9.3 Or should buyer decide on one home loan after getting several indicative quotes from banks? The problem I have with indicative quotes is that the bank may not fully disclosed all the fees that are chargeable for the loan.

10. Are there separate lawyer fees for the home loan agreement.
10.1 Is the lawyer and lawyer fees different from the conveyancing lawyer that drafted the SPA?
10.2 Can and should they be the same lawyer?

Thank you ....
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hfchuraymond



Joined: 11 Jun 2009
Posts: 606

PostPosted: Mon Nov 16, 2009 8:12 am    Post subject: 2nd world answers to questions Reply with quote

This is like the 2nd world answers to your questions.

In summary, the core of your question is on trust. How much do you trust yourself in appointing the right lawyer to do the right work at your best interests, if I may say so.

As you have stated, there is no strict right or wrong process.

If you have the time, why not pick up a law book on trust law. May be you can persuade your solicitor to draft a trust deed for yourself to cater for your demand.

Under ordinary circumstances, you have to appreciate that the private land search will have indicated all the answers to your question since only the private land search report can show whether you are comfortable with the purchase or sale, whichever way you put it.

As for the sub-sale transaction, I think all your queries can be found in this forum by many forumers, including myself.
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emmo_madrid



Joined: 03 Jun 2010
Posts: 4

PostPosted: Thu Jun 03, 2010 11:43 am    Post subject: Reply with quote

can someone help answer in details the questions our fren ask? i oso have the same questions like his..thank you for your help..
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basujrajun1110



Joined: 13 Jun 2010
Posts: 1

PostPosted: Sun Jun 13, 2010 3:08 pm    Post subject: Reply with quote

hello guys ...


its really nice and informative post....


i just liked it....


thanks for your information guys ...........
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cynthusc



Joined: 16 Sep 2005
Posts: 504

PostPosted: Sun Jun 27, 2010 4:02 pm    Post subject: Re: Buying subsale property - all the details Reply with quote

xinfull wrote:


1. Does buyer need to engage a lawyer to draft the written offer to purchase?

You can engage a lawyer if you want to - to ensure that the offer to purchase contains the main terms that cover the transaction.

My understanding is that buyer only engages lawyer after offer is accepted, to draft a SPA between buyer and vendor.

2. Any there any standard written offer to purchase template document that buyers should use?

It is a little risky to use a template as it may contain clauses that may not suit your transaction. You can get it from real estate agents.

3. To which party will the earnest deposit be made payable to?

3.1 Do we make the earnest deposit payable to the vendor's agent (negotiator)?
Usually the agent will require the payment to be made to them

3.2 Is the offer to purchase a contract between the buyer and the vendor's agent? No. Its between the Vendor and the Purchaser

4. Is earnest deposit refundable if the deal does not go through for whatever reason?
If it is the Purchaser's fault it will be forfeited by the Vendor and if it is the Vendor's fault, it must be returned to the Purchaser together with an additional amount equivalent to the earnest deposit as penalty

4.1 Should the buyer put in this refund term in the written offer?
Of course

5. To avoid any conflict of interest, should the buyer always engage his/her own agent to convey the offer to purchase to the vendor's agent?
No, not necessary as the Purchaser will have to pay their agent fees. Better to appoint a lawyer to help you through the entire process

5.1 In this case, are there any difference in the real estate agent fees payable by the buyer?

6. Do/Can agents use earnest deposits as their fee?
6.1 When should buyer pay the agent his/her fees?
Conventionally, the earnest deposit is the agents fees and belongs to the agent once the SPA is signed

7. Once the offer is accepted and a cheque for earnest deposit is issued, buyer should now engage a lawyer to draft the SPA?
7.1 How can a buyer "shop around" for a lawyer?
7.2 Does buyer simply call several law firms to get indicative quotes of their fees?
7.3 How does buyer use the bank's panel lawyers when buyer does not know which bank he will be getting a loan from at this stage?
7.4 Can and should the vendor use the same lawyer as the buyer?

The Vendor should use their own lawyer as the Purchaser's lawyer will not have the Vendor's interest in mind when drafting the SPA. Get a lawyer through referral especially from people who buy and sell property a lot. Also try to find a lawyer that is willing to attend to you personally. As for shopping around...Dislike the practice as it compromises on the quality of the service provided by the solicitor especially in sub-sale matter where matters are seldom 'standard'. As for the loan, ask the lawyer which panel they are on and if they are on the panel of your desired banks...they can do the documents for you.


8. For the SPA, does it make a difference whether the title is
8.1 under a master title or individual strata title?
8.2 under the name of the owner or still under the developer?
8.3 whether the title is leasehold or freehold?
What are the implications for each case?

Please visit my blog where there is an article on this issue

9. When and how does buyer shop around for the home loan?
9.1 Is this done after SPA is signed?
9.2 Can buyer submit multiple home loan applications to several banks simultaneously?
9.3 Or should buyer decide on one home loan after getting several indicative quotes from banks? The problem I have with indicative quotes is that the bank may not fully disclosed all the fees that are chargeable for the loan.

10. Are there separate lawyer fees for the home loan agreement.
10.1 Is the lawyer and lawyer fees different from the conveyancing lawyer that drafted the SPA?
10.2 Can and should they be the same lawyer?
Yes to all three questions
Thank you ....


Sorry I cannot elaborate further as a lot of your questions require very long answers.
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hfchuraymond



Joined: 11 Jun 2009
Posts: 606

PostPosted: Mon Jun 28, 2010 8:16 am    Post subject: Reply with quote

You may check with PEMUDAH's website for your answers.

In fact, there is Q & A session where your questions can be posted.
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littlestars



Joined: 08 Jun 2010
Posts: 38

PostPosted: Tue Nov 16, 2010 6:23 pm    Post subject: Reply with quote

Hi,
I would like to ask, how is the procedure into buying a subsale unit directly from the owner without agents involved?
Do we need to prepare the "offer of purchase" in order to safe guard us, before we proceed with the "shopping for the bank & lawyer"?
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hfchuraymond



Joined: 11 Jun 2009
Posts: 606

PostPosted: Wed Nov 17, 2010 8:19 am    Post subject: Be genuine Reply with quote

Unless one is genuine, the real point can only work with both purchaser and vendor sincerely engaging a solicitor to work to complete the sale & purchase within 3-4 months.

Also, the forum here is more than sufficient to grant an insight into the working of a solicitor in handling a basic, simple and common sale & purchase transaction of properties be it title or non title.
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