For first and even second time homebuyers, purchasing property can be a daunting experience. However, with the inception of property portals like PropertyGuru, it’s extremely easy for us homebuyers to carry out our research by checking out the house for sales section in the website.
Of course things are not as easy as it seems when there are countless of stuff to worry about. If you are unsure of the steps involved, here is a quick, simple-to-follow guide to buying your dream property.
Step 1: Determine Your Budget
Since you have the area or neighborhood in mind already, all you have left is to figure out your budget. If this is going to be the first property you are buying, banks can usually offer you about 90 percent of the required amount. However, this is only possible only if the installments you will be making do not pass the a third of your income, which is inclusive of any other installments you may be servicing. A good credit score can however see you making installments of about a half of your income.
Remember that there will be extra expenses that you need to take into consideration as you draw up your budget. This includes legal charges such as stamp duty or memorandum of transfer, which are likely to cost you a couple of thousands more ringgit. For example, if the house you are looking to purchase is going for RM 600,000, the extra legal charges can come to almost RM 30,000.
Do not rule out the possibility of interest rates increasing some time in the future years, so ensure that your monthly loan installments do not consume a huge proportion of your monthly income.
Step 2: Look at the Property
Get a feel of your property by finding out more about its location like transportation, schools, shopping areas, food establishments, worship places and medical services close by. You can do this easily using an online tool like Property Guru, from the comfort of your home or office. Other information you can find includes the number of bathrooms and bedrooms in the property, furnishing, tenure, and the listing age.
If you are interested in purchasing property under construction, you have the option of registering interest by visiting on the property developer’s website and signing up. When the developer is ready, they are likely to offer you a gallery containing the different units they have put up. Select a unit that intrigues you and pay the booking fee.
When working with developer property, be prepared to wait a couple of years for the completion of the property since most projects in Malaysia are under construction when sales are opened to buyers. Under the Housing Development Act, residential landed properties should be handed over to the new owners within 24 months of signing the Sale and Purchase Agreement (SPA) and 36 months for strata properties.
Step 3: View Your Property
If interested in a certain property, call the involved agent and have them set up a viewing. One of the first things you should find out from the agent is how long they have been marketing the property. If the property is new on the market, there is a chance that you will get a good price. If it was on the market for a significant amount of time, price may be quite high, but this should offer you some bargaining power to add to your arsenal.
Other questions you should ask include:
- Whether the property is leasehold or freehold
- The maintenance fees
- Number of car parking bays belonging to your unit of interest
- The potential rental income you could be making should you choose to make your property an investment
- Whether the property is for commercial or residential purposes
Be on the lookout for defects like a leaking roof due to missing roof tiles or structural cracks. Repairs can run into their tens of thousands of ringgit, which should be factored in the price. Ask the owner or agent of the property for the title. Inspect it, and take not of the owner’s name, tenure, official address and land size. Inspecting the official title will help reveal things that the owner may have not mentioned in his or her advertisement.
Step 4: Research Price and Neighborhood
If you’ve found a property you like, you might be tempted to jump into buying. However, before making the offer, go back to the property and talk to the neighbors. Find out if there have been house transactions done lately in the area and at what price. This is also the perfect opportunity to learn more about the security of the neighborhood, upcoming developments and types of neighbors.
Make use of property portal like PropertyGuru to get the best house for sales deal. Before making an offer, find out from your lending institution how much they will be willing to give you for the house. Contact a lawyer to help in drafting and getting the SPA and loan agreements signed. Once you have a loan from the bank, sign a letter of offer and pay about two percent of the purchase price in escrow. Inspect the property again, sign the SPA and the rest of the money and crack out the caviar and champagne, congratulations, you just became a homeowner!