Buyer: Owner, I buy from you at RM180k, can you allow us to mark up to RM240k?
Owner: What? mark up to RM240k, that means my property can sell up to RM240k?
Or you will get response like this
Owner: What are you talking about? What is mark up?
So, we have to have explain to them in nice way.
Buyer: It is only bank value, but in actual market, it is selling at RM180k. No one will buy at RM240k, because…
Even though owner agreed for us to mark up already, possibly, there are still have issue
What happened if the property is still within 5 years from owner purchased?
That means, the owner got to pay RPGT.
For example, if owner didn’t allow mark up:
Purchased price @ 2013 – RM120k
Selling price @2015 – RM180k
Profit – 60k
RPGT @ 30% – RM18k
Owner has to pay RM18k for RPGT
If owner allow mark up:
Purchased price @ 2013 – RM120k
Selling price @2015 – RM240k
Profit – 120k
RPGT @ 30% – RM36k
Owner has to pay RM36k for RPGT
End up owner has to pay double for RPGT, from RM18k to RM36K!
This is the issue.
Thus, if we really want to look for mark up deal, it is best if we make sure owner has own the property for more than 5 years. Then we can save the hassle of doing the extra work.
Question: How do we check?
We can always ask the agent to request a copy of S&P from owner, to know when he bought and signed the S&P
Assume that now we are already become more street wise already, and make sure the property has been bought for more than 5 years
and now we would like to ask for mark up.
Most probably, owner will ask: Why do I want to mark up, I am not comfortable with it.
There are few ways of doing it:
If we are in certain occupations like where you will end up sweating and your whole body will have a bit dirty.
After finished work, arrange for house viewing
Can share with owner, after pay the 10% down payment and extra legal fee, we no extra money to renovate or buy furniture already.
Owner, can you help us to mark up the price for us so that we have some cash to buy furniture?
But the success rate is not high. Why?
Remember, we have just mentioned before we able to negotiate the price to 180k?
“there are lots of things need to refurbish, this one no good, that one no good, this one leaking, that one parquet worn out already”
Disclaimer: After all, what we believe is that, If there is anything that we should pay to other parties during property buying or selling process, such as RPGT, legal fee or stamp duty. Then we should pay it and not try to look for loop holes to avoid it. After all, we know that the properties that we invested with our set criteria; it will 99% gives us profit!
Next Session: What If, We Really Don’t Know or Don’t Have Time to Look for NMD/BMV Deal?
