How
to buy a new property in Malaysia
Buying
your first own property to be called home is another milestone
achieved in your life. Whether it is for investment purpose or own
stay, most people are still confused with the sales
and purchase agreement
and
steps of buying a new house in Malaysia. Buying your own property may
seem easy but when it comes to going through the procedures of buying
a home, you then realize that you have missed out on many steps and
wished you know the steps earlier so you could avoid the unnecessary
troubles.
A.
Planning ahead
First
of all, be
clear of what you want and stay within your budget.
Many home buyers made the common mistake of rushing into buying new
house in Malaysia and only to regret later because they missed out
the main purpose of buying a new house. Try narrowing down your
options and figure out your budget to see how much you can afford to
pay before making such big decision. Also, you will need to prepare
to pay for the:
Down
payment
After
you have decided on which house to buy in Malaysia, here comes the
down payment. Usually, a property’s down payment will be fixed at
10%, depending on how much bank loan you have secured. In other
words, if the bank is providing you with a 90% loan, you will then
only need to pay a 10% downpayment.
Sale
and Purchase Agreement Fees
Next,
the Sale and Purchase Agreement Fees (S&P). This is an important
document with the blueprint of the property and it is charged
accordingly to specific price tier that is based on the price of
property the buyer buys.
Loan
Agreement Legal Fees
Next,
property buyer will then need to pay for Legal fees. These fees are
charged depending on the time and expertise of the engaged lawyer,
and also the price of your property.
Stamp
Duty on Memorandum of Transfer
The
Memorandum of Transfer (MOT) fees will be the final fees to be paid
by home buyers upon the completion of development. These fees are for
the ownership transfer of property to the home buyer, also known as
the rightful owner, and will only start to be transferred around 6
months after the development’s completion. These fees too, are
charged according to a price tier based on the price of the property,
along with 6% government tax and a RM1,000 - RM1,500 disbursement
fee.
B.
Buying Criteria
Location
Location
is an important factor as it makes a huge impact in your daily life.
Firstly, you will need to decide if the property is for investment
purpose of own stay. As for own stay, you may prefer to stay out of
the jam and busy city and prefer a quieter place whereas if it is for
investment purpose, you will need to know your target audience
(students, families or working class adults) and address your target
audience’s needs. Whether the location should be in the city
centre, or right next to public transportation.
Education
Institutions
This
is also one of the important criteria that you should take into
consideration, whether or not the property is for investment or own
stay. If the property is for own stay and you have children, this
will save you from the daily road congestion. If it is for investment
purpose, the more education institutions will then attract more
potential renters (students).
Safety
This
will be the main concern of property buyers regardless of the purpose
of property buying, be it for investment purpose or own stay. You
will not want to stay in an area where crimes are largely committed.
Proximity
to workplace and amenities
If
you are buying a property for own stay, closer proximity to your
workplace will be a good option as you certainly do not want to be
stuck in a massive traffic jam daily on the way to work.
Accesibility
Accessibility
is important as you want to be connected to many major highways that
lead you from one place to another easily. Bad accessibility does not
bring any benefits to you even if you are staying close to a highway.
Size
Size
does matter when it comes to buying a new house in Malaysia. Take
into consideration the purpose of buying a new house in Malaysia, own
stay, family, or investment.
Facilities
The
importance of facilities will differ across individuals depending on
the buyer himself. A family staying in a condominium might want
different facilities such as swimming pool and gymnasium whereas if
it is for investment purpose and is only renting out to students,
facilities might not be such a big issue as most students would
prefer to stay in their own rooms.
C.
Type of Loan
Standard
Home Loan
The
most common housing loan available as the interest rates of the loan
are fixed from the moment the property buyer obtains the loan,
regardless of the Overnight Policy Rates (OPR) changes or market
changes. Benefit of this loan is that property buyer who obtains
this loan will have a peace of mind as the fluctuation of the market
will not affect the interest rates.
Flexi
Home Loan
This
loan is another alternative option of Standard Home Loan. The
interest rates are lower as the buyers place more money into the
account, therefore, is suitable for property buyers with more cash
flow. Another benefit is that if there are any changes in the
market, the loaners get to enjoy the changes of rates as well. As
the name mentioned, it is also flexible as it allows loaner to take
out the money anytime.
Islamic
Home Loan
This
loan is specially tailored for the Muslim with similar benefits as
the Standard Home Loan, however, uses the Base Finance Rate(BFR)
when it comes to deciding how much is the bank earning from the
Islamic Home Loan.
Lastly,
the signing of documents. After your planning and preparing sessions,
buyers will then proceed to the signing of Letter of Offer to
indicate that the property purchaser accept the bank loan, followed
by the signing of the Sales & Purchase Agreement. After that, it
is signing of Loan Agreement and you are done. This is an agreement
between the property buyer and the bank and all the terms and
conditions of the loan will be clearly written in the Loan Agreement.
In
conclusion, the procedures
of buying a home
on
your own is not diffuclt as long as you plan ahead and stay within
your budget. Remember to always be realistic as you do not want to
get yourself into a financial burden after getting a home.
