Buying house tips,for first timer only

It is everybody’s dream to own a roof over their head. However, if you are not prepared and a wrong decision is made, it can turn out to be a nightmare. Read our house buying tips to avoid costly mistakes. Q. Will you be staying in the district for more than 5 years ? Buying a house and reselling it in less than five years is usually not financially feasible. Buying a house incurs the following fees, which can be substantial: Sales and Purchase Agreement legal fees Sales and Purchase Agreement stamp duty Housing loan agreement legal fees Loan agreement stamp duty Valuation (Appraisal) fees Title transfer fees And to sell the house, you need to pay: Capital Gains Tax (click to check the rates) Legal Fees for the Sale and Purchase Agreement Unless the property market is hot and the price of houses has increased considerably, you will not be able to recoup all that you have put in to own the house initially. Q. What is your credit status ? Check your credit status to ensure that you are able to obtain a loan to finance the purchase. Many first time buyers have had their 10% down payment forfeited after failing to obtain the loan from financial institutions. Q. What can you afford ? A big master-bedroom, a spacious living hall and a large compound looks very impressive, but never let your impulse make the decision. Let your pocket do it. The rule of thumb here is you probably can afford a house that is 2.5 times your annual salary. Then again, your other committed commitments will also have to be taken account. Q. What do you look for in buying a house ? 1. Location, Location, Location An established neighborhood with a good mixture of middle and high-income group should be your first criteria. There should be at least two access roads leading to the property. Ensure that there is economic vitality in the district by checking that the commercial units are well occupied with a mixture of commercial retail, banking and service industries. The presence of reputable financial institutions usually signifies a good economic vitality in the district. Properties located near to a highly regarded school generally commands better value. 2. The Good, Bad and Ugly Housing developers belong to these three categories. Residential units built by a good and reputable developer typically fetch a much better price on the secondary market. Checking out the reputation of the project developer can save you a lot of heartache later. 3. Layers and layers Residential units are more often than not, built in rows perpendicular to the main roads. The row that faces the main road is known as the first layer, the row behind it is the second layer and so on. In most residential project sales, the first layer units are usually the last to go. Reason being the noise and air pollution from traffic and you cannot park cars on the side of the road in front of your house. 4. Religious facilities In Malaysia, most big residential estates are served by at least a mosque. Those of the Islam faith prefer houses close to this facility for convenience. For the others, the early-morning prayer call takes quite some time to get used to. 5. Superstitions There are still many superstitious people around in this jet-age. Houses that face a junction, the west, and retaining wall are taboos to many, especially the Chinese. Q. You have identified your dream house, what next ? Negotiating the best price. Before you start to negotiate on the price, get your facts and figures ready. It is recommended that you engage a reputable real estate agent to assist you. Major registered agency firms in Malaysia do not charge you for such services. Your real estate agent should be able to provide you with an indication of the property’s current market value. Knowledge of information such as asking prices of similar properties on sale and the past two years transaction records in the district would be a strong bargaining tool. Option to purchase. Once the price has been agreed upon, most sellers would require an initial deposit (Option Sum) to secure the deal. The Option to Purchase Agreement will prevent the seller from reneging and selling the property to somebody else who bids higher than you. The Option Agreement usually is valid for seven working days during which time you must deposit a 10% down payment into an escrow account with your lawyer. Once this is done, the seller will draft the Sale and Purchase Agreement. Closing the Deal Always get professional help with the Sale and Purchase Agreement. Insist on the inclusion of a contingent clause that allows you to conduct a thorough inspection of the house 24 hours before the final payment is released by the bank to the seller (assuming a loan is obtained). This is especially important if the property you initially inspected was occupied. You might find a gaping sinkhole in the living room where the TV cabinet was placed. Upon signing of the Sale and Purchase agreement, you will be given usually 90 days to obtain the loan to finance your purchase. If you fail to do so within the stipulated time, your down payment will be forfeited. The only time your down payment will be returned to you is if the seller failed to comply with any of the contingent clause in the Agreement. Once your loan is approved, the bank will inform you the date the money will be disbursed to the seller. Conduct a thorough investigation of the property, which should be vacant, be this time. If you are satisfied, grant permission to your bank to release the money. As soon as the money is released, vacant possession of the property should be handed over to you. Enjoy your new home.