How to Buy a Home in Malaysia

Malaysia, with its vibrant culture, diverse population, and robust economy, is an attractive destination for expatriates from around the world. Whether you're planning to relocate for work, retirement, or simply to enjoy the country's rich heritage and beautiful landscapes, buying a home in Malaysia can be a rewarding investment. However, navigating the real estate market in a foreign country can be challenging. This guide aims to provide you with essential information on buying a home in Malaysia as an expat.

How Do I Find Houses for Sale in Malaysia?

There are several ways to find houses for sale in Malaysia. Online property portals such as PropertyGuru, iProperty, and EdgeProp are popular platforms where you can browse listings based on location, price, property type, and other criteria. Local newspapers also have property sections with listings. Additionally, hiring a real estate agent can be beneficial as they have in-depth knowledge of the market and can guide you through the process.

Are There Restrictions on Foreigners Owning Property in Malaysia?

Yes, there are restrictions on foreigners owning property in Malaysia. Foreigners can only buy properties priced above RM1 million, and the properties must be approved by the state authorities. However, under the Malaysia My Second Home (MM2H) programme, foreigners can buy residential properties priced above RM500,000 in most states. It's important to consult with a real estate agent or lawyer to understand the specific rules in the state where you plan to buy.

Does Malaysia Have an MLS Type System?

Malaysia does not have a Multiple Listing Service (MLS) system like in the United States. However, online property portals and real estate agencies provide comprehensive listings and information about available properties.

Do Brokers Have Licenses and How Do I Know if They Are Licensed?

Yes, real estate brokers in Malaysia must be licensed by the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP). You can verify a broker's license by checking the BOVAEP's online register or asking the broker to show their license.

What Documents Are Required When Buying a Home?

When buying a home in Malaysia, you will need your passport, proof of income, and a Letter of Approval from the state authorities if you're a foreigner. You will also need a Sales and Purchase Agreement, which outlines the terms and conditions of the sale, and a Loan Agreement if you're taking out a mortgage.

Do I Need a Lawyer When Buying a Home in Malaysia?

Yes, it's highly recommended to hire a lawyer when buying a home in Malaysia. The lawyer will conduct a title search, prepare the Sales and Purchase Agreement, and handle the transfer of ownership. Legal fees can vary, but they typically range from 0.5% to 1% of the property price.

Do People Typically Buy a Property with All Cash or Take Out a Mortgage?

Both options are common in Malaysia. Some people choose to pay in cash, especially for lower-priced properties. However, many people, including foreigners, take out a mortgage. Banks in Malaysia typically offer mortgages to foreigners for up to 70% of the property price.

Are There Inspections That Take Place, and If So What Is That Process Like?

Yes, property inspections are common in Malaysia. They are usually conducted by a professional inspector who checks the property's condition and identifies any potential issues. The buyer can then use this information to negotiate the price or request repairs.

What Are Some of the Pitfalls to Avoid When Buying Property in Malaysia?

Some common pitfalls to avoid include not conducting a thorough property inspection, not verifying the broker's license, not understanding the restrictions on foreign ownership, and not hiring a lawyer. It's also important to be aware of the additional costs, such as stamp duty, legal fees, and property taxes, which can add up to 10% or more of the property price.

Expats Talk about Real Estate in Malaysia

"Try to find a place in a touristy area. It's safer that way. Also consider proximity to supermarket, food stalls, restaurants and shopping. Forget about taking the bus. Taxis are very convenient," said one expat living in Penang.