Purchasing a house is often a budget-breaking investment during one’s lifetime
Purchasing and owning a first home is usually seen as a big leap of towards living an independent life. This is especially true for people with careers and for those contemplating on starting a family. Married couples generally find happiness in possessing their own homes, as some feel that sharing homes with their parents can be quite awkward, since a married life demands greater personal living space. Of course, they could always rent, but then again who would not be proud of living in a home they can truly call their own? Moreover, the rising cost of living in today’s ever-changing socio-economic landscape often takes precedence and primary consideration over comfort and security. People also have a premature tendency to rush into home-ownership because it is perceived by many as a sign of maturity and financial responsibility. Although owning a house is sometimes seen as a wise long-term investment, since property is an excellent hedge against inflation, there is still a great deal of work to be done in owning a home. And not to mention, the high cost of future renovations that has yet to be incurred. To safeguard against possible financial liabilities or losses, always practice sensible budgeting and exercise prudent financial management. Home-ownership can be a smart move, but always be wary or be aware of all potential pitfalls encountered.
Never buy a house on a hunch – simply because everybody else is doing it, or because some wise geezer told you so. And do not buy a house just because it is a buyer’s market or because mortgage rates are so good. Buy a house because you want to be a homeowner. Buy a house because you are planning to settle down, or when you are financially secure. For the large majority of us, a house is the most expensive thing we ever have to purchase in our lifetime. On top of a healthy line of credit, you will also need a steady job as well as additional cash for down payment to your first home. Are you prepared to take that first home leap?
Personal home financing is a booming industry in Malaysia today. With a plethora of housing loan schemes available on the market, it is wise to do some research before selecting a banking loan that suits your budget and meets your financial requirement. Applying for housing loans can sometimes be a time-consuming process – submitting the application form together with supporting documents in order to ascertain your personal background and credit worthiness. Once the Bank has approved your loan, you will be issued an offer letter of acceptance.
What are the things you have come to expect from your first home? This is vitally important since purchasing a piece of property is often a life-changing decision and experience for you and your entire family. Identifying the properties that meet your demand is also crucial. Ultimately, disposable income and personal savings, as well as the property market will determine just how viable or feasible your housing budget truly is. Furthermore, real estate agents generally have a tendency to recommend properties which normally exceed your own budget. So always be firm about your house of choice and stick to a home you can afford.
The initial step to buying a property should be to look out for the right property that meets your needs. Some of the requirements differ depending on whether you are buying property for investment or for home living. Searching for a dream house can be quite an exciting and challenging experience. Once you start touring properties with a real estate agent, house-hunting can be a bit “fast and furious”. In order to avoid buying pressures (i.e. impulsive or emotional purchases), always create a checklist which includes a standard list of criteria to enable property assessment and price comparison, in addition to curbing unnecessary spending. Also, finding an ideal location to your dream home is of the essence. The ideal location determines current pricing and future appreciation. Prior to embarking on a property road-trip, it helps to envision oneself living in such a home.
Once you have found the right property, you will be requested to pay a certain percentage in booking fee to the property developer or real estate agent. Within a two-week period starting from the day of booking, you are required to sign the general S&P (i.e. sales and purchase agreement); pay up the remaining deposit fee, depending on the loan amount you have applied for. In some cases whereby property price exceeds property valuation, the loan applicant will have to fork out the remainder sum or outstanding balance in order to obtain the bank’s approval to the home loan. If you choose not to work with a realtor, you can instead visit various property home listings and deal directly with the respective developer or home seller’s agent. For first-time would be home owners, it is probably better to enlist a home buyer’s agent for simplicity in transaction. Or you can enquire from acquaintances and family members for their recommendations of realtors they have previously cooperated with. You can also get your local realty agency to set up meetings with prospective estate agents. Discover all that you can from them regarding your properties of interest. Alternatively, you can also shop around for agents whom you feel comfortable dealing with. Whatever the scenario, an agent should possess in-depth and comprehensive knowledge about the local property market. A property should always be sensibly & seamlessly tailored to the budget.
Alternatively, if a particular developer’s property is of interest and it is still under construction, prospective buyers are often encouraged to register themselves on the developer’s website first (e.g. you can check out Land Pacific Development at www.landpacific.com.my). You can register yourself as a potential candidate for the property in question before proceeding with the necessary legal paperwork. The developer will then commence its project launch or sales preview at the sales gallery itself, whereby buyers will have the option to select their preferred unit and pay a booking fee for it. For a developer property, you probably have to wait for the property to be completed first, since projects in Malaysia are usually under construction when their properties go on sale. For residential properties which come under the purview of the Housing Development Act, properties need to be handed over to purchasers within 24 months from the initial signing of the sale & purchase agreement (SPA) – for landed properties, and 36 months for strata properties respectively. From 2015 onwards, the Malaysian government has proposed that buyers only pay in full for their purchased properties when they are fully completed (i.e. under the ‘buy-then-sell’ housing model or framework).
Before you can exclaim in joy and excitement of finally owning a home, there are several legal procedures to undertake to officiate the homeownership process. First and foremost, you will need to appoint a qualified solicitor to execute both S&P as well as loan agreements respectively. With all the necessary agreements signed and validated, the solicitor will then proceed to stamp the agreements and perform the transfer registration at your local land office registry. You are also required to pay the relevant stamp duties and other miscellaneous fees incurred. Depending on circumstances, the transfer registration may take anywhere from three months to a year to complete. Once everything has been finalized, the Bank will disburse the loan amount to the seller. A pair of house keys will subsequently be delivered to you in person by your realtor or via the property developer itself.
It has become a fad or trend for people to shop around for houses even before they are ready to own a home. For this reason, some people just could never get around to signing the sales & purchase agreement for their homes. Perhaps it is poor timing, financial insecurity, market instability, economic downturn, or some other factors. Whatever the reasons or excuses, it is good practice to always refer back to your property check-list and budget yourself accordingly. Buying a first home maybe a major milestone, but you certainly would not want it to be your last buy or final purchase. If you are truly committed to going through with the property transaction, eventually you can declare yourself a proud home-owner!