Tuesday, 30 October 2018

Quick guide on buying a house

You are ready for your biggest financial commitment in life, buying a house and you have no idea where to begin. You are contemplating whether to get Rumawip or private condominium. It can get tedious during the buying process if you have not done your research or understand the market. Let me give you a quick and simple guide to buying your dream home.

Type of property to buy

Buying property is not like buying your groceries in the market, it has to be thoughtfully considered to suit your needs and lifestyle. Besides, your financial capability also determines your affordability on the type of your property to buy. For example, a working class person prefers to buy own property near to public transport accessibility or nearer to the KL city, a family with children would prefer to stay near schools and middle-aged person would prefer to stay near suburbs with slower and peaceful lifestyle. So, which one are you?

Besides, your earning capability only allows you to afford a certain level of property. It is better if you can come up with a budget. Banks usually will loan out to first-time homeowners up to 90% of the required amount. Rule of thumb is that the installments should come up to no more than 1/3 of your income. With governments initiatives, there are plenty of affordable housing schemes available for young people like RUMAWIP, PR1MA, MyHome, and others.

Look for your property

There are many avenues you can buy your property whether it is from sub-sale, auction or developer. Browse through property portal websites to look for your desired properties and you will be surprised the type of properties you can find. Otherwise, you may engage an agent to help you look out for your ideal property. You can even check out newspaper or property related magazines to look out for the new developments..

You can register your interest in the project developments with developers and when they invite you for their new launches, you will be surprised the number of discounts they give away to their buyers.

View the property

Once you have found your desired property, do go down for viewing to get a glimpse of how your life would be like if you are staying there; noise pollution, distance of the amenities, surrounding neighbors. It is vital to know because you want to live your life in peace and chat with the owners regarding the unit and previous owner. Make few viewings up to 4 units to have a better idea of your dream home.

For apartments and condominiums, check with the previous owner or agent if the unit comes with parking bays and the number of parking bays, maintenance fees, and facilities of the project. Look out for defects like structural cracks, water leakage and etc because such remedies may cost in thousands and that should be reflected in the property price.

Loan financing

Finally, you decided to get your very first property and now it is the financing part. Speak to various bankers from different banks to check out the rates. Usually, for home borrowers, they are looking at banks that offer the lowest interest rates and the highest amount they can get.

After you have decided which bank to get, the bank will arrange a physical valuation of your property. Based on valuation, the loan officer will give you a loan offer letter to sign, laying out the loan terms, amount, rates and monthly installments. You have the bargaining power to bargain for a lower price with the previous owner if the valuation is lower than expected.

Legal documents

Purchasing property has many legal documents that will be needed to go through to formalize the transfer of property ownership. Here is the list of documents you will need to go through and scheme the details.

1. Booking form or Offer to Purchase - Before signing Sale and Purchase Agreement, also known as SPA, during the interim booking form or offer to purchase plays a vital role to ensure that you have secure your desired property, preventing vendors from engaging into another transaction with other party while preparing SPA.
2. Sales & Purchase Agreement - After signing the booking form or offer to purchase, it will take up to 2 to 3 weeks to draft out SPA for both sides into agreeing to the various clauses and stamping few copies of the SPA to be signed.

3. Loan agreement - Your lawyer will also draft out loan agreement that is to be signed by both you and your bank. 

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