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Property Valuation in Malaysia: What Is It All About?

Whether you are in the process of selling or purchasing a home or acquiring a home loan, there are multiple reasons to conduct a property valuation in Malaysia.

A property valuation is an assessment of your property’s value based on its location, condition and multiple other factors. It is an essential process for existing homeowners and potential homebuyers.

For existing homeowners, conducting a property valuation helps them know how much their property is currently worth. For example, homeowners who have lived in the same property for decades or have renovated their homes would want to know if there was an increase in their property’s value.

Meanwhile, for potential homebuyers looking to apply for a mortgage loan, a property valuation is key to determining the loan amount granted by financial institutions.

If you find it difficult to determine the market value of your property, read through our comprehensive guide to learn more about property valuation in Malaysia.

3 Reasons A Bank Would Reject Your Loan

Various factors can result in a home loan application being rejected – from bad credit scores due to default or late payments from other credit facilities to a low debt service ratio (DSR).

However, even if you have a high income and credit score, you may still be rejected by banks due to the following factors:

1. The Type Of Land

It may be challenging to secure financing from banks for leasehold (with less than 60 years left) and Malay reserved properties. This is because these lands are difficult to resell in an auction due to their restrictions.

Depending on the bank, properties with a remaining lease period of less than 30 years will not be financed. Banks consider leasehold properties as high-risk financing, as the property value will drop towards the end of the lease.

As for Malay reserved land, it will be difficult for the banks to auction it, as only Malay buyers are eligible to purchase the land.

2. The Property’s Location

You may be unable to get a loan for properties in certain areas for various reasons.

For example, areas with a slow appreciation rate due to a history of landslides or flooding are unlikely to receive financing from banks.

Moreover, some residential neighbourhoods or areas may not fulfil the bank’s approval criteria. This is due to their low marketability and occupancy or increasing trend of auctions.

3. Property Maintenance

Banks are not willing to approve a loan for old properties (more than 10 years), especially if it is poorly managed and maintained. For example, leaks or flooding caused by poor plumbing infrastructure.

4. Old Properties with a Master Title

There are many banks and financial institutions that are reluctant to approve loans for properties without strata or individual titles issued.

This is because properties with a master title of more than 10 years are usually related to inefficient or bankrupt developers. Therefore, it is best to check on the status of the developer when deciding on a property.

Read More: Cash-Out Refinancing Malaysia: The 4 Advantages You Should Know

Essential Property Valuation Information For:

Essential Property Valuation Information For
  • Homebuyers
    • If the appraisal is valued at or above the contract price, the transaction proceeds as planned, but if it is below the contract price, it can delay the transaction.
    • As the buyer, you can take advantage of the low appraisal to convince the seller to lower the price.  
  • Home Sellers
    • With a low appraisal, you would have to lower your home’s price to get it sold.  
  • Refinancing Homeowners
    • If you’re refinancing a housing loan, a low appraisal can prevent you from doing so. The home needs to be valued at or above the amount you want to refinance for your loan to be approved.

Read More: Bankruptcy Malaysia: How to Remove Bankruptcy Status in Malaysia

What Is A Property Valuation Report in Malaysia?

During the home-buying process, a property valuation report is a written statement by an appraiser concerning the estimated value of a property. The report must include:

  • A breakdown of how the square footage was calculated
  • An exterior building sketch
  • Information used to determine the property’s market value, such as market sales data and public land records.

How to Determine Your Property’s Value and Why It Matters

How to Determine Your Property's Value and Why It Matters

When you know your home’s value, you can determine whether a listing is priced appropriately and provide an overview of your overall financial health.

Here are two ways to determine your property’s value in Malaysia:

1. Consult a property valuer

A property valuer gives professional advice to those who buy, sell, and rent land and property. They provide their clients with an estimate of their land’s and buildings’ market value.

With the information collected, property owners can maximise their profit from a sale or rental agreement or refinance their property to reduce their mortgage rates.

2. Meet with a real estate agent

You can also ask a local real estate agent for a comparative market analysis.

Though it is not as detailed as a professional appraisal from a property valuer, it provides an evaluation of the home and market to come up with an estimate of the property’s value.

Read More: Top-Up Loan Malaysia: 3 Important Things to Know Before You Apply

How Bluebricks Can Help You

Property valuation in Malaysia is a key process that is carried out to ensure that homeowners know the accurate and latest value of their property should they want to refinance their home.

From our many years of service, Bluebricks has accumulated a wide range of contact with various banks and lenders that would link our customers to their trusted property valuers to carry out the property valuation process in Malaysia.

Refinancing Housing Loan Rejected Services

A low credit score, a bad credit history and a high debt-to-income ratio are some of our customers’ common challenges when applying for a housing loan.

With over 10 years of experience, we have accumulated the knowledge and expertise to help our customers obtain their desired loans. Our comprehensive refinancing housing loan rejected services can help you overcome challenges like these to get your housing loan application approved to buy your dream home.

Property Valuation in Malaysia – FAQs

A property valuation is necessary before buying or selling a property. This is because property investment is one of the most significant financial decisions you will make.

Therefore, we recommend consulting an expert to guide your investment, buying or selling decisions.

Are you interested in learning more about property valuation in Malaysia? In that case, we cover some of the top questions and answers that you may find helpful to broaden your knowledge about property valuation.

1. What are the property valuation fees in Malaysia?

Generally, the fees payable to the property valuer is 0.3% of the property’s market value.

2. What happens after a property valuation?

A property valuation leads to a mortgage offer, which usually takes around one week to receive from the lender.

3. How does the bank value a property?

A property’s value is based on how much it is worth for the banks to hold as security. A property valuer will look at the property type, its age and condition and the demand for the property.

About Bluebricks

BlueBricks Holding is one of the top ten leading loan agency companies in Malaysia in terms of loan approval rates. As a leading licensed loan agency company, we have extensive knowledge and experience in mortgage and business loans, and this enables us to help our customers to get the deal that is best suitable to them.

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