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Buying Property: Agency refused to refund deposit as one bank approved while two banks rejected my loan applications

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asked on Sep 9, 2019 at 14:12
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edited on Dec 5, 2019 at 16:33
 
I signed a Letter of Offer to Purchase on 16 August 2019 and paid 1% earnest deposit under a real estate agency. After that I started applying for loans with 4 banks. 3 banks rejected my loan because I was not qualified. 1 bank approved my loan but I couldn't afford to pay the monthly installments due to the high interest rate.

I informed the real estate agency that I should not pay the 1% deposit before applying for housing loan. Now, I have to take up the loan with high interest rate or lose the 1% deposit.

May I know under the Malaysia laws, can I request back my 1% deposit?

When I informed my agent that I was unable to service the loan monthly installments due to such high interest rate, he told me that I have a loan approved and all I need to do is sign and get the loan. I told him that there was no point for me to take up this loan cause in the end I couldn't afford it. He kept replying that I would only lose the 1% deposit and I was not the only one in such predicament, there are other applicants too.

How am I going to discuss with my agent as I cannot afford to paid the loan? And also, the number of loan applications rejected was more than approval.

Below are some of the terms stated inside the Letter of Offer to Purchase:

Offer to Purchase
3.   By the Vendor(s), the Vendor(s) shall refund the Earnest Deposit received from the Purchaser(s)together with a compensation sum of equivalent amount which shall be shared equally between the Purchaser and [Real Estate Agency]. The Purchaser(s) reserved the rights to sue for specific performance and/or damages flowing therefrom and all costs and expenses Incurred thereto shall be borne by the Vendor(s).

4.   The Purchaser(s) shall pay the balance of 10% deposit towards the purchase price upon execution of the formal Sale and Purchase Agreement and the balance purchase price shall be paid to the Vendor or the Vendor's Solicitors on or before the Completion Date, or the extended Completion Date as the case may be stipulated in the formal Sale and Purchase Agreement;

5.  In the event the Purchaser's loan is not approved/obtained [evidencing two financial Institution rejection letters to the Vendor, the earnest deposit paid shall be refunded in full to the Purchaser by the Vendor free of interest;

6.  That the above mentioned Property is sold at a "as is where is basis". Each party shall bear its own solicitors' cost.
According to term no. 5, I got 2 rejection letters, meaning I can get back my 1% deposit refund, but the agent said no refund, cause I got one approval letter.

Please advise me on this situation.
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2 Answers

answered on Sep 9, 2019 at 17:04
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edited Dec 5, 2019 at 16:36
 
I got 2 rejection letters
Are these 2 banks in the list of approved panel of banks?
If yes, then try to settle amicably with the agent. Go to the Consumer Tribunal for arbitration.
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answered on Sep 9, 2019 at 20:42
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edited Dec 5, 2019 at 16:38
 
Read carefully again this clause below:-

5.  In the event the Purchaser's loan is not approved/obtained...

Your loan is approved. Vendor or agent can check with the bank.

If you do not go ahead with your purchase, you will lose your deposit. They will not return it.

If you go to tribunal, you will lose.
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