Whether you look for property online or through an estate agent, having a precise idea of your requirements will greatly assist in finding your dream home.
The main criteria are:
1) budget
2) location
3) type of property
4) property size
Budget
Your initial budget is the amount of money you are prepared to spend to acquire your property.
Your budget should include:
1) Down payment: the proportion of the purchase price not covered by financing (banks will typically lend 80-90% of the purchase price)
2) Legal fees: 1% for the first RM100,000, 0.5% for the next RM4,900,000
3) Property stamp duty: 1% for the first RM100,000, 2% for the next RM400,000
4) Loan agreement stamp duty: 0.5% of loan amount transfer
5) Disbursement fees include fees for registration of charge, land search and bankruptcy search (RM300–700 in Wilayah Persekutuan and Selangor)6) Processing fee: one-time fee charged by the financial institution for loan processing (RM50-1,000)
You will also need to think about ongoing costs following acquisition of the property, such as financing costs. As a guide your monthly commitments on paying instalments for your house, car and other payments should not exceed 1/3 of your gross monthly household income. The Base Lending Rate (BLR) is currently 6.25% (most banks offer a small discount to BLR). The length of a loan can range anytime up to 45 years.
For information on mortgages, see http://www.bankinginfo.com.my/
Location
Location is critical to your decision so get to know the area properly before buying. You may consider renting for a few months before buying in a new area. The following considerations will affect your choice of location:
1) proximity and access to work
2) proximity and access to schools
3) amenities including shopping, leisure, religious facilities, parks
4) safety
5) prestige
Type of property
The main distinction is between landed and non-landed property. Landed properties include detached, semi-detached, and link houses. Non-landed include condominium units and flats. Apart from your personal preference it is worth bearing in mind that landed properties tend to appreciate more thannon-landed properties while non-landed properties tend to give higher rental returns. You should also consider whether you want a basic home which you may want to renovate yourself, an already-renovated home or a new home. You will also need to consider whether you want a freehold or leasehold property. Freehold properties tend to appreciate more and are easier to sell, but if you wish to stay in your property for many years you may prefer a leasehold property as you will be getting a better house for the same money.
Property size
Make a checklist of your requirements:
1) land area
2) built up area
3) number of bedrooms (do you require a bedroom on the ground floor?)
4) number of bathrooms
5) reception rooms
6) size of kitchen
Tuesday, September 15, 2009
Monday, September 14, 2009
Arranging Viewings
Look through property adverts
The main way of finding properties to view is to look through property advertisements either on the internet websites or the printed press, in particular, the Star Classifieds.
Drive around
Another way of finding properties to view is to drive through the area where you want to buy and look for any properties for sale as advertised by the estate agent’s board placed at the front of the property. This is a good way of getting familiar with the area and of identifying suitable properties.
Arrange the viewings
Identify suitable properties and call the numbers featured on the advertisements. Very few owners advertise their properties directly – normally the person you contact will be an estate agent marketing the property on behalf of the owner. Find out more details from the agent about the property advertised and arrange a time for viewing during daylight hours, when any evidence of poor workmanship can easily be seen, if the property fits your requirements. Tell the agent your requirements and find out whether the agent has any other properties on their books which may be suitable. Make sure you let the agent know your essential requirements so you don’t waste your time viewing unsuitable properties.
Do not rely on only one agent
Estate agents get paid by commission from the seller on the sale of the property. The buyer does not pay the estate agent. Use several agents to show you properties – if you rely on only one agent you will be unable to determine whether the properties on his book are fairly priced compared to other properties on the market.
Take notes
During viewings, write down the property details and your impressions of the properties. Take photos with a digital camera or mobile phone if the owner allows you to. This will help you compare properties and remind you of the properties you have seen. It is all too easy getting confused between different properties if you do a lot of viewings.
Arrange second viewings
Create a shortlist of suitable properties and arrange second viewings. Take your time during second viewings and scrutinise the property. Don’t hesitate to open windows, sliding doors, taps, etc to ascertain whether they are in good working order.
Do not make an offer until you have done all your final checks
Don’t feel shy about asking for a third or even fourth viewing before you make an offer on a property. Make sure you visit the property at different times of the day - go to the property during rush hour to check for any traffic problems. This is an important purchase and you need to make sure you are entirely comfortable with the property before you buy. If you are not comfortable, do not buy. Most agents will be professional and will not pressure you, but if an agent does pressure you it is usually better to walk away.
The main way of finding properties to view is to look through property advertisements either on the internet websites or the printed press, in particular, the Star Classifieds.
Drive around
Another way of finding properties to view is to drive through the area where you want to buy and look for any properties for sale as advertised by the estate agent’s board placed at the front of the property. This is a good way of getting familiar with the area and of identifying suitable properties.
Arrange the viewings
Identify suitable properties and call the numbers featured on the advertisements. Very few owners advertise their properties directly – normally the person you contact will be an estate agent marketing the property on behalf of the owner. Find out more details from the agent about the property advertised and arrange a time for viewing during daylight hours, when any evidence of poor workmanship can easily be seen, if the property fits your requirements. Tell the agent your requirements and find out whether the agent has any other properties on their books which may be suitable. Make sure you let the agent know your essential requirements so you don’t waste your time viewing unsuitable properties.
Do not rely on only one agent
Estate agents get paid by commission from the seller on the sale of the property. The buyer does not pay the estate agent. Use several agents to show you properties – if you rely on only one agent you will be unable to determine whether the properties on his book are fairly priced compared to other properties on the market.
Take notes
During viewings, write down the property details and your impressions of the properties. Take photos with a digital camera or mobile phone if the owner allows you to. This will help you compare properties and remind you of the properties you have seen. It is all too easy getting confused between different properties if you do a lot of viewings.
Arrange second viewings
Create a shortlist of suitable properties and arrange second viewings. Take your time during second viewings and scrutinise the property. Don’t hesitate to open windows, sliding doors, taps, etc to ascertain whether they are in good working order.
Do not make an offer until you have done all your final checks
Don’t feel shy about asking for a third or even fourth viewing before you make an offer on a property. Make sure you visit the property at different times of the day - go to the property during rush hour to check for any traffic problems. This is an important purchase and you need to make sure you are entirely comfortable with the property before you buy. If you are not comfortable, do not buy. Most agents will be professional and will not pressure you, but if an agent does pressure you it is usually better to walk away.
Sunday, September 13, 2009
Make An Offer
You have done your homework, you have seen enough properties, and you have found that property which ticks most of your boxes. Now it's time to make an offer. Here are a few things to consider before you go ahead and make your offer:
The asking price: a seller’s asking price is usually higher than the price they will actually settle for – talk to the agent to get a feel for what the seller realistically wants
The seller’s circumstances: if the seller needs to move soon he is more likely to accept a lower offer
The price you are prepared to pay for the property: this will depend on your budget, how much you like the property and whether you are considering other properties
Interest in the property: if the property has been on the market for a long time without much interest the seller will be more negotiable than if several buyers are showing interest
Previous rejected offers: previous offers rejected by the seller may give an indication of the price the buyer is looking for – however the seller’s circumstances may have changed and he might accept an offer he previously rejected
Bank valuation: before making your offer it is a good idea to get an indicative valuation from the bank valuer – this will ensure that you get the amount of financing you need and will give you an indication for the value of the property (be aware however that valuers will often undervalue renovated properties).
If you have been using an agent you should make your offer through the agent who showed you the property. When making an offer indicate clearly what you expect to be included in the property (eg, furniture) to avoid any misunderstandings. Also make sure you emphasize your positive points as a buyer so the seller is more likely to be swayed by your offer (eg, you are a cash buyer).
The seller will then either accept, reject or give a counter-offer, and negotiations will continue until a price is agreed or they fall through.
The asking price: a seller’s asking price is usually higher than the price they will actually settle for – talk to the agent to get a feel for what the seller realistically wants
The seller’s circumstances: if the seller needs to move soon he is more likely to accept a lower offer
The price you are prepared to pay for the property: this will depend on your budget, how much you like the property and whether you are considering other properties
Interest in the property: if the property has been on the market for a long time without much interest the seller will be more negotiable than if several buyers are showing interest
Previous rejected offers: previous offers rejected by the seller may give an indication of the price the buyer is looking for – however the seller’s circumstances may have changed and he might accept an offer he previously rejected
Bank valuation: before making your offer it is a good idea to get an indicative valuation from the bank valuer – this will ensure that you get the amount of financing you need and will give you an indication for the value of the property (be aware however that valuers will often undervalue renovated properties).
If you have been using an agent you should make your offer through the agent who showed you the property. When making an offer indicate clearly what you expect to be included in the property (eg, furniture) to avoid any misunderstandings. Also make sure you emphasize your positive points as a buyer so the seller is more likely to be swayed by your offer (eg, you are a cash buyer).
The seller will then either accept, reject or give a counter-offer, and negotiations will continue until a price is agreed or they fall through.
Saturday, September 12, 2009
The Legal Process Of Buying A Property
Your offer has been accepted. Your lawyer should now keep you informed of the progress of the transaction and protect your interests at every stage, but here is a brief outline of the legal steps which will now follow:
Letter of offer: the seller will sign the letter of offer previously signed by you and accept your deposit (this is typically 2% of the property price and can also be kept by the estate agent as stakeholder until the Sale and Purchase Agreement (S&P) has been signed) – the letter of offer gives a timeframe for the transaction including when the S&P should be agreed and signed (usually about 3 weeks after the letter of offer has been signed); your lawyer should check the seller’s title before you sign the letter of offer to ensure he is the actual owner of the property
S&P: the S&P will give the details for the transfer and specify any warranties; you should now give the seller a deposit of 10% of the purchase price less the amount of deposit given at the letter of offer stage
State authority consent: this only applies to transfers of leasehold land or if a foreign buyer is involved and it can take from 6 weeks to 3 months
Completion: completion will usually take place within 3 months of the S&P (or state authority consent if applicable) but may be faster if you are a cash buyer or the seller does not have any existing loan secured on the property. You now pay the balance 90% of the purchase price to the seller and you finally get the keys to your new home!
Letter of offer: the seller will sign the letter of offer previously signed by you and accept your deposit (this is typically 2% of the property price and can also be kept by the estate agent as stakeholder until the Sale and Purchase Agreement (S&P) has been signed) – the letter of offer gives a timeframe for the transaction including when the S&P should be agreed and signed (usually about 3 weeks after the letter of offer has been signed); your lawyer should check the seller’s title before you sign the letter of offer to ensure he is the actual owner of the property
S&P: the S&P will give the details for the transfer and specify any warranties; you should now give the seller a deposit of 10% of the purchase price less the amount of deposit given at the letter of offer stage
State authority consent: this only applies to transfers of leasehold land or if a foreign buyer is involved and it can take from 6 weeks to 3 months
Completion: completion will usually take place within 3 months of the S&P (or state authority consent if applicable) but may be faster if you are a cash buyer or the seller does not have any existing loan secured on the property. You now pay the balance 90% of the purchase price to the seller and you finally get the keys to your new home!
Friday, September 11, 2009
How To Get That Bargain
Everyone wants to get a bargain. Buying a property at that bargain price will mean your initial deposit will be lower, your financing payments lower, and your profits higher. We ask Isabelle Sterboul, Director of AIQ Global, a group which specialises in buying old houses in prime areas of KL, to share some of the techniques that she uses to find her properties at bargain prices.
Work hard. View at least fifty properties, ideally one hundred before you buy one. It's hard work, and can get very boring and tiring, but the more properties you see the greater the chance of getting that bargain - it is that simple. Further, viewing properties acts as research - by viewing many properties you'll know that bargain when you see it.
Use several agents. Talk to them, listen to what they have to say. If the agent is proactive, work more closely with them - if they are being more proactive with you, the buyer, they will probably be more proactive with the sellers as well.
Don't just use agents. Find out about any sellers from any other ways you can. Your local hairdresser may know someone who desperately needs the money - talk around - spread the word that you want to buy a property.
Go to auctions. Auctions are a great way to get a bargain, but make sure you don't get carried away - never exceed your target price. Further, do not for one moment think that auctions are all about winning - if you 'win' the auction but the property price is not a bargain, this would best described as you losing the auction. You can subscribe to the major auction houses so you get their listings emailed or posted to you.
Be on standby, always. When a property agent calls you, and tells you there's a new property on the market, make sure that you're on the way to view the property before the telephone call is over. Not only will it mean you're one of the first to view, it will show the agent that you're really serious, so the next time they have a property you'll probably be the first to know.
Get a good feel for the area before you buy. Walk (don't just drive) around the area noticing everything and anything like a property detective. Speak to the neighbours - start off by talking about their lovely pet cat, but then move the conversation slowly on to the area. Go to the local authority to see if there are any planned developments nearby that will affect the area.
Become the world expert on your property type. After you've viewed many properties with so many different agents you should know more than the agents themselves. If you do not feel you know more than the agents then do not buy until you do. It follows that a valuation below your purchase price, even from a reputable valuer, should not concern you except that it may make it difficult to get the amount of finance you wish.
Ignore the seller's price. Do not think too much about how much the seller is asking for. Focus on how much the property is worth.
If the seller is there when you are viewing the house, speak to them. Ask them about the price to make sure you have not been misinformed by the agent. Try to sense if they are a desperate seller.
Make an offer even lower than the price you feel is a bargain. There is no harm. Sellers often ask for ridiculous prices, and buyers do not get offended, so if a seller gets offended by your offer, then do not let that concern you. You have only made an offer. You are not forcing them to sell, and they can decline the offer if they wish. If the offer is rejected get as much feedback from the agent about what the seller said to your offer or how she reacted. Use this information to your advantage if you give another offer.
If you have any conditions on your offer do not mention them when you give the offer. For example, if your offer is subject to you obtaining financing, do not bring this up at this stage as it will mean the seller is less likely to verbally agree to your offer. Once the offer has been accepted, bring up any conditions. Of course the seller may reject those conditions. However, you increase your chances of a successful property purchase by bringing up any conditions after you have agreed the price, and the seller will unlikely change the price due to those conditions once a price has been agreed.
If the seller doesn't accept your first offer raise it, but do not go above the limit at which the property is no longer a bargain. By raising your offer to above the bargain price you won't get your bargain - you're reading this because you want a bargain, remember!
Do not give up. Be patient, work hard, and be smart, and you will find that bargain.
Work hard. View at least fifty properties, ideally one hundred before you buy one. It's hard work, and can get very boring and tiring, but the more properties you see the greater the chance of getting that bargain - it is that simple. Further, viewing properties acts as research - by viewing many properties you'll know that bargain when you see it.
Use several agents. Talk to them, listen to what they have to say. If the agent is proactive, work more closely with them - if they are being more proactive with you, the buyer, they will probably be more proactive with the sellers as well.
Don't just use agents. Find out about any sellers from any other ways you can. Your local hairdresser may know someone who desperately needs the money - talk around - spread the word that you want to buy a property.
Go to auctions. Auctions are a great way to get a bargain, but make sure you don't get carried away - never exceed your target price. Further, do not for one moment think that auctions are all about winning - if you 'win' the auction but the property price is not a bargain, this would best described as you losing the auction. You can subscribe to the major auction houses so you get their listings emailed or posted to you.
Be on standby, always. When a property agent calls you, and tells you there's a new property on the market, make sure that you're on the way to view the property before the telephone call is over. Not only will it mean you're one of the first to view, it will show the agent that you're really serious, so the next time they have a property you'll probably be the first to know.
Get a good feel for the area before you buy. Walk (don't just drive) around the area noticing everything and anything like a property detective. Speak to the neighbours - start off by talking about their lovely pet cat, but then move the conversation slowly on to the area. Go to the local authority to see if there are any planned developments nearby that will affect the area.
Become the world expert on your property type. After you've viewed many properties with so many different agents you should know more than the agents themselves. If you do not feel you know more than the agents then do not buy until you do. It follows that a valuation below your purchase price, even from a reputable valuer, should not concern you except that it may make it difficult to get the amount of finance you wish.
Ignore the seller's price. Do not think too much about how much the seller is asking for. Focus on how much the property is worth.
If the seller is there when you are viewing the house, speak to them. Ask them about the price to make sure you have not been misinformed by the agent. Try to sense if they are a desperate seller.
Make an offer even lower than the price you feel is a bargain. There is no harm. Sellers often ask for ridiculous prices, and buyers do not get offended, so if a seller gets offended by your offer, then do not let that concern you. You have only made an offer. You are not forcing them to sell, and they can decline the offer if they wish. If the offer is rejected get as much feedback from the agent about what the seller said to your offer or how she reacted. Use this information to your advantage if you give another offer.
If you have any conditions on your offer do not mention them when you give the offer. For example, if your offer is subject to you obtaining financing, do not bring this up at this stage as it will mean the seller is less likely to verbally agree to your offer. Once the offer has been accepted, bring up any conditions. Of course the seller may reject those conditions. However, you increase your chances of a successful property purchase by bringing up any conditions after you have agreed the price, and the seller will unlikely change the price due to those conditions once a price has been agreed.
If the seller doesn't accept your first offer raise it, but do not go above the limit at which the property is no longer a bargain. By raising your offer to above the bargain price you won't get your bargain - you're reading this because you want a bargain, remember!
Do not give up. Be patient, work hard, and be smart, and you will find that bargain.
Thursday, September 10, 2009
The Difference Between Individual and Strata Title
Heard about strata title but not sure when it applies and what it implies? Confused by all the legal jargon? We ask Joseph Ooi of law firm Sidek, Teoh, Wong & Dennis to explain the difference between individual and strata title:
“In general, an individual title is for a property which has its own land and this usually means that the land itself is owned by the proprietor. Strata titles are generally for properties in a multi-storey building and this usually means that the land belongs to the proprietors from the time of the multi-storey building.
Whilst properties which have their own land will be issued with individual titles, the owner of a unit in a multi-storey building (e.g. apartment, flat, condominium, townhouse, office or even shoplot) will have their right of ownership of the unit they purchased. Every owner will have their share of the land/building which is stated as Unit Share in their Strata Title when issued based on the built-up size of their unit.
It can take years for a strata title to be issued by the relevant authorities. Pending the issuance of the strata title, the owner of a unit can still sell or assign their unit and the non-availability of the strata title does not in any way affect the owner’s right to their unit.
For the sale of a property with individual title the transfer instrument is in Form 14A as prescribed in the Malaysian National Land Code 1965. As for the legal charge of the property with individual title by the owner to his financier Form 16A is applicable. Both the transfer and the charge will involve the land office and the instruments must be presented to the land office for registration.
For property with a strata title still to be issued a deed of assignment is executed to buy a property (if the seller is not the developer, i.e. a sub-sale) or to give security for a loan. A deed of assignment transfers all rights, title, and interests in respect of the property and under the previous sale and purchase agreement to the purchaser. Likewise for an owner to provide the security over the property to his financier, a deed of assignment assigns all rights, title, and interests in respect of the property and under the previous sale and purchase agreement to the owner’s financier. Once the strata title to the unit has been issued, the owner will transfer and/or charge his unit in the same way as a property with individual title.”
“In general, an individual title is for a property which has its own land and this usually means that the land itself is owned by the proprietor. Strata titles are generally for properties in a multi-storey building and this usually means that the land belongs to the proprietors from the time of the multi-storey building.
Whilst properties which have their own land will be issued with individual titles, the owner of a unit in a multi-storey building (e.g. apartment, flat, condominium, townhouse, office or even shoplot) will have their right of ownership of the unit they purchased. Every owner will have their share of the land/building which is stated as Unit Share in their Strata Title when issued based on the built-up size of their unit.
It can take years for a strata title to be issued by the relevant authorities. Pending the issuance of the strata title, the owner of a unit can still sell or assign their unit and the non-availability of the strata title does not in any way affect the owner’s right to their unit.
For the sale of a property with individual title the transfer instrument is in Form 14A as prescribed in the Malaysian National Land Code 1965. As for the legal charge of the property with individual title by the owner to his financier Form 16A is applicable. Both the transfer and the charge will involve the land office and the instruments must be presented to the land office for registration.
For property with a strata title still to be issued a deed of assignment is executed to buy a property (if the seller is not the developer, i.e. a sub-sale) or to give security for a loan. A deed of assignment transfers all rights, title, and interests in respect of the property and under the previous sale and purchase agreement to the purchaser. Likewise for an owner to provide the security over the property to his financier, a deed of assignment assigns all rights, title, and interests in respect of the property and under the previous sale and purchase agreement to the owner’s financier. Once the strata title to the unit has been issued, the owner will transfer and/or charge his unit in the same way as a property with individual title.”
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