What Is Completion Date When Selling A House?

When it comes to selling a house in Malaysia, one of the most critical factors to consider is the completion date.

The completion date refers to the specific day when the sale of the property is finalized, and the ownership is officially transferred from the seller to the buyer. Understanding the importance of the completion date and how it impacts the overall home selling process is essential for both sellers and buyers.

In this blog post, we will delve into the significance of the completion date, the factors that influence it, and the steps involved in ensuring a smooth and timely transaction.

What is the Completion Date?

The completion date, also known as the settlement date or closing date, is the final step in the home selling process.

It is the day when the ownership of the property is officially transferred from the seller to the buyer, and the transaction is completed. This date is typically specified in the sales and purchase agreement (SPA) signed by both parties.

During the completion date, the following key events take place:

Payment of the Purchase Price: The buyer will make the final payment of the agreed-upon purchase price to the seller, either in full or through a combination of cash and mortgage financing.
Transfer of Ownership: The legal ownership of the property is officially transferred from the seller to the buyer, and the necessary documents are signed and registered with the relevant authorities.
Handover of Possession: The seller hands over the physical possession of the property to the buyer, who then becomes the new legal owner.
Settlement of Outstanding Fees: Any outstanding fees, such as utility bills, property taxes, or maintenance charges, are settled between the seller and the buyer.

The completion date is a critical milestone in the home selling process, as it marks the final stage of the transaction and the transfer of ownership.

Both the seller and the buyer must be fully aware of the completion date and ensure that all necessary preparations and arrangements are made in a timely manner.

Who Decides the Completion Date When Selling a House?

When selling a house in Malaysia, the completion date is primarily determined through negotiation between the seller and the buyer during the drafting of the Sales and Purchase Agreement (SPA).

Both parties have the opportunity to express their preferred timelines based on their individual circumstances.

Factors that influence this decision include legal requirements, mortgage financing timelines, existing tenancies, and market conditions. Real estate agents often facilitate discussions and ensure that both parties are aligned on expectations regarding the completion date.

Once agreed upon in the SPA, both the seller and buyer are legally bound to adhere to that date, although adjustments can be made through mutual agreement if unforeseen circumstances arise.

Open communication and flexibility are essential for a successful transaction, allowing both parties to navigate the completion process smoothly.

Factors Influencing the Completion Date

The completion date for a house sale in Malaysia can be influenced by several factors, including:

Type of Property: The type of property being sold can impact the completion date. For example, the process may be faster for a landed property compared to a high-rise condominium, as the latter may involve additional paperwork and approvals from the relevant authorities.
Mortgage Financing: If the buyer is obtaining a mortgage to finance the purchase, the completion date may be influenced by the time it takes for the lender to approve and process the loan. This can vary depending on the lender and the complexity of the buyer's financial situation.
Legal Procedures: The legal procedures involved in the property transfer, such as the preparation and registration of the transfer documents, can also affect the completion date. The efficiency of the legal team and the workload of the relevant authorities can play a role in the timeline.
Negotiation and Agreement: The negotiation process between the seller and the buyer, as well as the terms and conditions agreed upon in the SPA, can impact the completion date. For instance, if the parties agree on a longer or shorter settlement period, it will affect the final completion date.
Regulatory Approvals: Depending on the property type and location, certain regulatory approvals may be required, such as the consent of the state authority or the management corporation of a condominium. The time needed to obtain these approvals can also influence the completion date.
Existing Tenancies: If the property is currently occupied by tenants, the completion date may be influenced by the terms of the existing tenancy agreement and the time required to ensure a smooth transition of possession.

Understanding these factors can help both sellers and buyers better plan and prepare for the completion date, ensuring a seamless and timely transaction.

Steps Involved in the Completion Process

The completion process for selling a house in Malaysia typically involves the following steps:

Signing the Sales and Purchase Agreement (SPA): This legally binding contract outlines the terms and conditions of the sale, including the purchase price, completion date, and other relevant details.
Payment of the Deposit: The buyer typically pays a deposit, usually 10% of the purchase price, upon signing the SPA.
Loan Approval and Financing: If the buyer is obtaining a mortgage, they will need to apply for and secure the necessary financing from a bank or financial institution.
Property Valuation: The lender will conduct a property valuation to assess the market value of the house, which is a crucial step in the loan approval process.
Legal Documentation and Transfer: The legal team, which may include lawyers representing both the seller and the buyer, will prepare and process the necessary transfer documents, such as the Memorandum of Transfer (MOT) and the Deed of Assignment.
Stamp Duty and Taxes: The buyer and the seller will need to pay the applicable stamp duty and taxes, such as the Real Property Gains Tax (RPGT), as part of the completion process.
Completion Date: On the agreed completion date, the final payment is made, the ownership is officially transferred, and the possession of the property is handed over to the buyer.
Post-Completion Formalities: After the completion date, the new owner (the buyer) will need to update the property's records with the relevant authorities, such as the local council and utility providers.

Importance of the Completion Date

The completion date holds significant importance for both the seller and the buyer in a house sale transaction.

Understanding its significance can help both parties better navigate the home selling process and achieve a successful outcome.

Certainty and Predictability: The completion date provides a clear timeline for the transaction, allowing both the seller and the buyer to plan and prepare accordingly. This certainty helps them manage their expectations and make informed decisions.
Timely Transfer of Ownership: The completion date ensures that the legal ownership of the property is officially transferred from the seller to the buyer on the agreed-upon date. This is crucial for the buyer to take full possession and control of the property.
Financial Implications: The completion date has direct financial implications for both the seller and the buyer. For the seller, it marks the point at which they receive the final payment and can potentially reinvest the proceeds. For the buyer, it determines when they need to have the necessary funds available and when they can start making mortgage payments or move into the new property.
Compliance with Legal Requirements: The completion date must adhere to the legal requirements and deadlines specified in the SPA and other relevant documents. Failing to meet the completion date can result in penalties, legal disputes, or even the cancellation of the sale.
Smooth Transition of Possession: The completion date ensures a seamless transition of possession from the seller to the buyer. This is particularly important if the property is currently occupied by tenants or the seller needs to vacate the premises.
Avoidance of Complications: Delays or issues with the completion date can lead to complications, such as disputes over the condition of the property, disagreements over outstanding payments or fees, or even the potential collapse of the entire transaction.

By understanding the significance of the completion date, both the seller and the buyer can take proactive steps to ensure a successful and timely sale, minimizing the risk of complications and achieving their desired outcomes.

Preparing for the Completion Date

To ensure a smooth and successful completion of the house sale, both the seller and the buyer should take the following steps:

Review the SPA: Carefully review the SPA to understand the agreed-upon completion date and any associated terms and conditions.
Communicate Regularly: Maintain open and regular communication with the real estate agents, lawyers, and any other relevant parties involved in the transaction. This helps to stay informed about the progress and any potential delays or issues that may arise.
Gather Necessary Documents: Ensure that all the required legal and financial documents, such as property titles, utility bills, and tax records, are readily available and organized.
Arrange for Utility Transfers: Contact the relevant utility providers (electricity, water, internet, etc.) to arrange for the transfer of services from the seller to the buyer on the completion date.
Prepare for Handover: If the property is currently occupied, coordinate with the tenants or the seller to ensure a smooth handover of possession on the completion date.
Secure Financing: If the buyer is obtaining a mortgage, they should work closely with their lender to ensure that the loan approval and financing are in place well before the completion date.
Plan for Moving: The buyer should start planning and arranging for the moving process, including hiring movers, transferring their address, and updating their personal records.
Budget for Completion Costs: Both the seller and the buyer should be aware of the various costs associated with the completion process, such as legal fees, stamp duty, and any outstanding payments, and ensure that they have the necessary funds available.
Obtain Necessary Approvals: If the property is part of a condominium or a development with a management corporation, the seller and the buyer may need to obtain the necessary approvals or clearances from the management before the completion date.

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Conclusion

The completion date is a critical milestone in the home selling process in Malaysia.

It marks the final step in the transaction, where the legal ownership of the property is officially transferred from the seller to the buyer, and the sale is finalized.

Understanding the significance of the completion date, the factors that influence it, and the steps involved in the completion process is essential for both sellers and buyers.

By being well-informed and proactive, they can ensure a smooth and successful transaction, minimize the risk of complications, and achieve their desired outcomes.

Whether you're a seasoned homeowner or a first-time seller, keeping the importance of the completion date in mind and taking the necessary preparatory steps can go a long way in ensuring a stress-free and successful house sale in Malaysia.

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About the Author

Danny H

Seasoned sales executive and real estate agent specializing in both condominiums and landed properties.