Relying on professionals who aren’t professionals

Posted on September 13, 2010 by Admin

: Image by mscaprikell via Flickr

Malaysian businessmen for the past 40 years were misguided by many people who called themselves professionals in the fields that weren’t supposed theirs. We are a new business minded people in business dealings, just learning how to walk, but then are doing thing that a superman does, such as to fly by jumping out of the window of a 20-storey high-rise office and survive.

Certainly many of you in the business world think that laws in the country could protect legitimate deals. Of course they do, but greed which brings in the illegitimate ones that you think the law and the lawyers could protect such as making water disperses into a thin mist then profited out from that kind of illegitimate works, does not.

Many have sorted to do illegitimate cases which have left banks and financial institutions dirge with non performing loans over the past many years. Certainly we are a society which has a limited knowledge on the roles of professionals in this country, which has resulted into scrupulous dealings that will eventually destroy everyone in the nation, for sake of a fairer distribution of wealth because of improper advice from so-called CONsultant professionals.

Land dealings should involve not only lawyers. Lawyers should be contacted to interpret wishes of the persons interested in a particular transaction, and interpret the wishes in line with the law of the land in the form agreements or other forms that provided and protected by the laws.

Land dealings should also involve other professionals so that they too can protect the interest of the persons involved from the onset of any intentions in the deals.

There are obviously some discrepancies in any dealing if it involves a land worth RM25 million bought today and sold at RM200 million the next day. Please know that there’s no shot cut in making fast money in this country or in this world. This kind of transactions would involve false intentions thus using false documents of the power of attorney (Power Attorney Act 1949), or false feasibility studies or valuation reports, or false loan cum assignment agreements, false “Borang 14As” of NLC, false sale and purchase agreements, false I.Cs, and most of them all false hearts from faulty and horrible people of the lots.

It’s the time that roles of professionals other than lawyers in this country be recognized and explained to the public so that lawyers should not play a single and most important role in land deals like what happen now or believing in its superior role now; from being a property agent, making up the agreement, taking up deposit, involving in submissions of documents to the land office, make deals with bankers and seeing difficult and unscrupulous deals through on their strength in connection for their own benefit.

Please learn from mistakes of the past. Lawyers are not the only one who can protect your interest. Talk to professionals who know the value of the land, its size, the town planners, architects, building economics, and most of them all, the people on the street, the Malaysian who are not greedy, the pak cik and mak cik, who have lived in the areas for decades to find the truth of all intentions made up by lawyers, unlicensed land brokers or loan arrangers.

There, out there, there are people who have license to kill, like the James Bond; the greedy lawyers, loan arrangers and you. Beware!

Note: The method of land scam in similar case as this one is that the land is sold to A at say RM10 million at a very high discount. Using a power of attorney in the name close to the lawyer or the lawyer himself as beneficial owners of the subject property. The fact is that the current market value of the land is say RM1 million. Using a sale and purchase agreement at RM10 million the buyer will go to a bank for business loans or financing at 60% to 90% of RM10 million using a third-party charges. After the loan is obtained the full payment is made to the lawyer who then disburse some money to actual owner who had sold at a much lower price (RM1 million in this example) and final transaction of land is made between the new buyer who knows nut about the scam. All documents (conversion of land use, premium paid, i.cs of real owners, photographs, town planning approvals, proposed layout plans, sometimes the titles) are normally forgery. Power attorney documents and third-party charge at their best as a method to deceive others. Please look into these and stop these practices.

“of malaysian cosmetic millionaire, sosilawati lawiya, murdered” and related posts (lancerlord.blogspot.com)
Malaysian cosmetics millionairess murdered (telegraph.co.uk)
What is a transaction attorney? (brainz.org)

Speculative Home Price – bubles up in 2012?

Posted on September 8, 2010 by Admin

: Image by Gimi Wu via Flickr

A few groups including National House Buyers’ Association and The Federation of Consumers’ Association (Fomca) were reluctant to consider higher LTV (Loan Vs Value) ratio than the present cap of 90:10 citing it will be a burden to the first time buyer and also would go against the Government’s plan to encourage home ownership.

The worrying part for most new buyers or new families isn’t the initial cost of acquiring residential properties but they are more concern on the escalating prices of the houses in Kuala Lumpur‘s suburbs, whether now is the right time or later to start a family or to own a house. What are real reasons for home prices to increase exorbitantly?

The art and science of building homes for consumers are not that much different from the marketing and sale of Nasi Kukus in the Ramandan bazaar. Both need skills in predicting the price, cost of production and some element of acceptable profits. If everyone in the bazaar produce similar nasi kukus, therefore it’s no matter how much your production cost is, the price will slip down at no time. Thus, the industry of nasi kukus is down.

The costs of development for homes are little more complicated but they are similar in real term. For property development it will involve the cost of land, building materials, marketing, professionals fees such as architects, town planners, valuers, legal fees, bridging loans and developer’s profit. Property development has an add up cost on time for period of construction that the project shall complete, the bumiputra discounts and other similar costs which shall be included to make the property development worth a while.

The basic idea for a successful sale for such a development is however the selling price or the market value of the property in the vicinity in which the proposed development is being carried out. If the proposed selling is above the current market value of a similar property, then how do consumers know for sure the price is its money worth?

Current trend is to fair for bigger land area, better building materials, better building layout, ample road and circulations and other trendy and advanced branding terms than the earlier development projects. Current market value of development land in the KL Suburb may come to as low as RM400,000 per acre or as high as RM1,000,000 per acre.

Those firms which own a huge land bank would make immediate profit by exposing their land as an housing area. It’s not known as to whether these firms are subject to development tax as the result of incremental land value that has forced the price of building ballooning in many suburban areas.

As much as 40% increase in home prices registered in certain areas surpassing the 2009’s price level. That means a house price of RM250,000 now has become RM350, 000 and showing an incremental price of almost RM100,000 for each unit of similar type of houses. Some bungalows sold at RM2 million each but with a land area of lesser than 4,000 square feet, which suit as a semi detached previously.The huge profit due to the incremental value alone and taking into account a developer stands to scope another developer’s profit which normally accounts to 15% to 25% of the building cost in the same project, the winners in the upturn of the market lopsided to the developers and aren’t going to the home buyers or bankers.

The huge profit attracts many developers in releasing their land banks into the market knowing full well the super profit they might get during the good time and in time when banks faces with stiff customer’s competitions.

What is worrying is that when the supply exceeds demand and when that happens, the home owners and financial institutions are at lost.

Thus reducing a loan to value ratio to 80:20 would in a way disturb the above speculative nature and in my view it’s good for first time home buyers. Forecast of the residential market also indicates that supply will exceed demand in 2011 or 2012.