Valuation fee?

When we purchase a house, we have to sign an agreement called the Sales & Purchase Agreement (commonly known as SNP or SPA)  which clearly states our purchase price of the property. Besides paying the usual downpayment of 10% deposit upon signing, there are also some other charges incurred. The first one would be valuation fee.

Upon the approval of loan for the property, the bank will appoint a property valuation company to evaluate the report for Application of Credit Facility. This is to ensure that the property you applied for the loan is matching with the market value. All the cost of the valuation report will be paid by the buyer as it also allows you to know that whether you are buying a property that worth its price.

Here are an estimation of how valuation fees calculated base on the property you purchased :

For First RM100K = 0.25%
Remaining up to RM2 mil = 0.2%
Remaining up to RM7 mil = 0.167%
Remaining up to RM15 mil = 0.125%
Remaining up to RM50 mil = 0.10%
Remaining up to RM200 mil = 0.067%
Remaining up to RM500 mil = 0.05%
Remaining more than RM500 mil = 0.04%

Effective 1st October 2009, the fee is subject to a minimum fee of RM400 per property

If you bought a 450k house,
First 100k = RM100,000 x 0.25% = RM250
Left 350k = RM350,000 x 0.2% = RM700
Total = RM950

If you bought another 150k house,
First  100k = RM100,000 x 0.25% = RM250
Left 50k = RM50,000 x 0.2% = RM100
Total = RM 350

Since the minimum fee is RM400 per property, you still have to pay RM400 for the second house above. However, there are actually different charging rates depending on the valuation company chosen. You can actually enquire the bankers regarding the details of the charges if you think that it is unreasonable.

To prevent getting overcharged, ask for an estimated price first before they conduct the evaluation report and compare the quotation with few valuation company. Chances are you can ask the banker to choose the valuation company that you picked which could in turn save you hundreds.

Just try to be reasonable and ask politely. I am sure there will always be a better deal when you ask nicely. Opt for a win-win situation.

Happy investing!

W.