Buying your first home is an exciting milestone, but it is also one of the biggest financial and legal commitments you may make. For a first-time buyer, the process can involve much more than finding a property and securing a housing loan. Understanding the Sale and Purchase Agreement (“SPA”), the costs involved, available stamp duty exemptions, and the role of the professionals handling your transaction is equally important.
Recent cases involving property scams, individuals falsely presenting themselves as real estate negotiators or lawyers, and the alleged misuse of clients’ funds highlight the importance of carrying out proper checks before committing to a property transaction. A professional-looking profile, registration number or property listing should not be accepted without independent verification. Where a solicitor is involved, buyers can verify the lawyer and law firm through the Malaysian Bar’s Legal Directory, which lists advocates and solicitors with valid practising certificates and registered law firms.
At the same time, first-time buyers should be aware of available government incentives, including stamp duty exemptions that may help reduce the upfront cost of purchasing a home.
This guide sets out some of the key matters that first-time buyers should consider — from verifying the people involved in the transaction and understanding the financial commitments, to protecting your interests through proper legal advice.
— Verify the Property Agent Before Making Payment
If you are buying a property through a Real Estate Negotiator (“REN”), take the time to establish that the person you are dealing with is genuine and currently authorised to act.
A REN should be registered with the Board of Valuers, Appraisers, Estate Agents and Property Managers (“LPPEH”) https://lpeph.gov.my and attached to a registered estate agency. Buyers should independently check these details rather than relying only on information provided through WhatsApp, social media, business cards or photographs of registration tags.
Before making any payment, consider the following:
- Check the REN’s registration.
– Verify the REN’s details and current status through the LPPEH search system. Make sure the information matches the individual you are dealing with and the agency they claim to represent.
- Confirm the agency independently.
– Use contact information obtained from the agency’s official sources to establish that the REN is genuinely affiliated with the agency.
C )Establish the property’s authority
– Make reasonable enquiries to confirm that the person has the right to market the property and that the property details provided are genuine
D)Understand the payment arrangements.
– Before transferring a deposit or other payment, find out who is receiving the money, what the payment represents , and the circumstances in which it may be returned or retained. Exercise particular caution where payment is requested into an individual’s personal bank account.
E)Be alert to pressure tactics.
– An unusually low price, a refusal to allow a viewing, inconsistent information , or an insistence that payment must be made immediately should prompt further verification before proceeding.
A few minutes spent checking these details can help prevent a first-time buyer from falling victim to a fraudulent listing or someone impersonating a property professional.
If You Are Buying Directly From a Housing Developer
Purchasing a new property directly from a licensed housing developer is subject to a different statutory framework. Under Regulation 11(2) of the Housing Development (Control and Licensing) Regulations 1989, payments relating to a housing development may only be collected in accordance with the prescribed contractual arrangements.
In PJD Regency Sdn Bhd v Tribunal Tuntutan Pembeli Rumah & Anor and Other Appeals* [2021], the Federal Court considered the collection of booking fees and affirmed the protective purpose of the housing legislation. The decision highlights why buyers should not assume that a payment described as a “booking fee”, “reservation fee” or by another name is automatically part of the lawful purchase process.
Accordingly, before making any payment when purchasing directly from a developer, first-time buyers should understand the applicable terms and statutory protections and, where necessary, seek independent legal advice.
— Appoint and Verify Your Solicitor Before Signing
Before signing an Offer to Purchase, booking form or Sale and Purchase Agreement (“SPA”), it is important to understand what you are agreeing to. Some documents may create binding obligations or affect the money you have already paid. Seeking legal advice at an early stage can help you understand the terms and identify issues before you commit yourself.
When choosing a solicitor, remember that you are generally free to appoint your own lawyer, even where a solicitor has been recommended by the developer, estate agent, seller or financier. If a recommendation is made, clarify who the solicitor acts for and whether the arrangement gives rise to any potential conflict.
Before engaging a solicitor, you should consider the following:
– Check the solicitor and law firm. Use the Malaysian Bar Legal Directory to confirm that the lawyer and firm are properly listed.
– Understand the costs. Ask for a clear breakdown of professional fees, stamp duty, disbursements and applicable taxes so that you know what you are being charged for.
– Know what your solicitor will handle. An engagement letter should set out the nature and extent of the legal services being provided.
– Be careful with payment instructions. Confirm the firm’s bank details through an independently verified channel before transferring any money, particularly where substantial sums are involved.
– Keep proper records. Obtain receipts and retain copies of payment records and important correspondence relating to the transaction.
– Read before signing. Do not sign documents that are incomplete, unclear or have not been properly explained to you. Ask your solicitor to explain any provision that you do not understand and keep copies of the documents you sign.
– Understand how stakeholder money is dealt with. Where a solicitor receives money as a stakeholder, the funds should be dealt with according to the terms agreed between the relevant parties and the applicable professional requirements.
Taking these steps does not make the property-buying process more complicated. Instead, it gives you greater clarity about who is representing you, what you are paying for and what happens to your money and documents throughout the transaction.
For a first-time buyer, having a solicitor involved before signing important documents can provide an additional layer of protection and help ensure that the transaction proceeds with a clear understanding of your legal rights and obligations.
— Understand the Deposit and Purchase Process
Once you have found a property and have a clearer idea of your financing, it is important to understand the terms of the proposed purchase before making any payment or signing any document.
The process may differ depending on whether you are purchasing a property **directly from a developer** or through a subsale
For a developer purchase, the transaction will generally be governed by the applicable housing legislation and prescribed form of Sale and Purchase Agreement (“SPA”), where applicable. Buyers should also check that the developer is properly licensed and that the relevant advertising and sale approvals are in place through the Ministry of Housing and Local Government (“KPKT”) housing portal https://www.kpkt.gov.my
For a subsale, the terms of the transaction are generally negotiated between the buyer and seller. Matters such as the property’s title, ownership, existing restrictions or caveats, outstanding charges and other relevant issues should be checked before the buyer becomes firmly committed to the purchase.
— What Should You Understand Before Paying a Deposit?
At the initial stage of a purchase, you may be asked to sign an offer or booking document and pay an earnest deposit. Before doing so, make sure you understand:
– what document you are signing and whether it creates a binding commitment;
– the amount of the deposit and how it will be treated towards the purchase price;
– whether the purchase is conditional upon your housing loan being approved;
– when the deposit can be refunded and when it may be forfeited; and
– who will hold the deposit and the terms on which it will be released.
It is advisable to have your solicitor review the relevant terms as early as possible, preferably before you sign or make a substantial payment. This can help you understand the consequences of proceeding with the purchase and identify issues that may affect the transaction.
— Loan Pre-Approval Is Not Final Approval
A loan pre-approval gives you an indication of your potential financing, but it does not guarantee final approval. The bank may still assess the property’s valuation, your documents and the property’s eligibility before approving the loan.
For more information on the Option to Purchase (“OTP”), please refer to our article on Option to Purchase
— Understand the Costs Involved
The purchase price is not the only expense to consider. Buyers should also budget for:
– Deposit or balance purchase price, often around 10%;
– SPA and loan legal fees, which are governed by the Solicitors’ Remuneration Order 2023 and subject to the applicable scale and permitted discounts;
– Transfer and loan stamp duty, subject to any applicable exemptions;
– Valuation, registration and search fees, where applicable;
– SST and other disbursements, where applicable;
– Mortgage insurance, where applicable; and
– Other costs such as renovation, maintenance deposits and moving expenses.
Eligible first-time buyers may qualify for stamp duty exemptions under the Stamp Duty (Exemption) Order 2021 [P.U. (A) 53/2021], as amended by the Stamp Duty (Exemption) (Amendment) Order 2025 [P.U. (A) 448/2025], subject to the applicable conditions.
Understanding these costs from the outset will help you plan your finances and avoid unexpected expenses.