Buying a house is decidedly one of the biggest investments that you may undertake. Often the preparations for it start years before you actually get around to buying a house.
These are often the most important baby steps that help you in firming up your spending plans.
Below are 25 small initiatives can help smoothen the entire process and improve the relative return ratio too.
1. Start Saving
This is the first step when you are planning to buy a house. It is true that you will get loans, but you will still need to prepare some amount of money for downpayment.
Therefore, it is pertinent that you start saving well in advance. Even nowadays, a lot of developers will offer zero
We still need to ensure we have enough money for those cost.
Make a tentative assessment of the property price and aim for saving at least 10% of that amount.
2. Clean Up Your Finances
It is important that you clean up your finances.
That means that if you have personal loan, credit card debt and PTPTN loan, it is important to start clearing existing loan first in order to improve your credit score.
Bank will calculate your Debt Service Ratio (DSR) to justify whether you are still entitled to opt for any new loan.
Start planning out your liabilities, savings and then assess how much you can take up further.
More importantly, it is always better to pay off existing liabilities before you plan to take up new ones.
This will also have a positive impact on your overall credit score.
3. Know Your Purpose
We must first know our purpose in order to know what type of house is suitable for us.
Do you need the house to stay or are you looking at it as an investment?
If it is for investment purpose, are you looking for rental income or flipping purpose? How long do you want to hold the property?
Are you going to rent it out for residential purpose or Airbnb style? Who is your target tenant?
All of these factors will clearly have a bearing on the final choice and the budget you decide.
The location and the type of property will also change depending on the objective.
4. Get the Right Help
Once you get serious about buying a house, deciding on a real estate agent is crucial.
It is best to talk to different people and then take a call on what works best for them. Also, there are some who just want to finish off a sale for you and others who actually help you find the house of your dreams.
It is important that you consider all of this well before deciding on the house. If the agent is also able to address your needs, preferences and the absolute not apart from sticking to the budget, that is what will help you most.
5. Survey The Market
It is almost needless to mention that you will depend heavily on the advice that your real estate agent offers. But just relying on it may not be adequate.
It is imperative to do a bit of homework on your own as well. So it is a good idea to get a fair idea of the existing rate in the area and also the rental fee.
In that way, you can assess whether it is a good idea to buy the house and give it for rent or buy it out for the living.
6. Know Your Budget
The most important rule when it comes to buying the house is getting the math right. Remember that buying a house is a massive financial commitment. So determining the budget is crucial.
Think about your current income, your existing outgoing payment and take a call if you can afford more liabilities. If yes, how much?
That will decidedly help you make a realistic assumption of the kind of budget or house that you must be looking for.
7. What Kind of House You Want?
What kind of house are you looking for? Decide on the size, type, and location of the house that you plan to buy.
This will be useful in two ways. First of all, it helps to determine the type of property you are looking for and helps you narrow down the search but most importantly, it creates the required information pool that you need to decide on the budget.
Once you have the budget ready, you can proceed towards the goal in an unhindered fashion.
8. Have Your Taxes Ready
If you are business man who do not have income slip. Most bankers that you may approach will look at your tax submission amount to figure out your income range.
But it is not just a mere documentation formality. The bankers will cross check with the tax authorities and ascertain the credibility. So if there are any problems, it is best to early on.
Of course, you can speak to your bank and work around it, but for that, you need to know the problem first.
9. Surveying the Best Loan Interest
Often the range of terms and conditions for the best loans can be overwhelming.
You will have a variety of bankers offering a range of loan interest, but the point is what would you prefer and how will you want to go ahead with it.
Survey with few banks, find out what is the best loan interest you can get.
The trick is to make an informed choice. There is no need for going with a specific lender only. Survey all the available options carefully and check what is best for you.
10. Understand the Types of Loans
Other than the bank loan interest, the types of loan that you decide on will also have a bearing on the budget you choose for the house.
There are few types of loan options that most banks offer, eg: non-flexi loans, semi flexi loan and fully flexible loan.
Understand what are the differences among those 3 loans.
Normally fully flexi loan interest rate will be higher compared to those two types, but you can offset the interest if you put money into the flexi loan link current account.
11. Check the Projects Area Traffic Condition
When you are buying a house, we all know that you will have to make some compromises.
It could be the travel time, the space available or perhaps the facilities. But there are a few that you will not like to compromise with.
The traffic condition leading to your house or the area you zero in on is crucial. This will determine the travel time, the accessibility and ease of traveling to and from your house.
Remember this will also have a bearing on the overall return on the property going forward.
12. Consider How Far You Need to Travel to Work and Your Children to School
No house is perfect. You may get the best designed one, but it may be far off from the City Centre. But this is a compromise that you may be okay with.
On the other hand, check the relative distance that you have to travel to work and the distance from the children’s school.
If your workplace and the schools are in the different direction, you have to take a call on which aspect you may want to compromise on.
13. Check the Developer Background
Think about the tiniest buys you make, a box of strawberries or a dress. You always look for options, check for potential defects and pick the best possible ones.
Remember buying a house is no different. Do not just concentrate on any one aspect. You may like the floor plan or location but are you sure the developer will deliver it the way promised? That is why it is important to do a thorough background check.
Find out the quality of the other properties that the same developer may have built. Check the quality of build and get feedback from other buyers before deciding.
14. Check the Project Surrounding Area
Pay attention to the geographical positioning of the area you are buying the house in.
Is this area prone to flooding? Are there any high tension cable? It is not just information about your neighborhood but also determines the viability of your buy.
Some people may not like to stay close to a grave; others may be keen about access to cinema or malls. Undertake a thorough check before you decide.
15. Study Basic Real Estate Knowledge/ Terms
We must have basic knowledge in order to make judgement.
Example: we must understand what is HDA, what are the differences between residential and commercial title property. Do you know what is MOT (Memorandum of transfer)? When and how much do you need to pay for your MOT?
So get a grasp of the basic real estate terms and a functional knowledge of the realty words. This will allow you to converse more proactively with the agents and also take a fair call on what you need.
As a consumer, it is important for us to know our basic right to protect ourselves.
16. Find Out the Township Planning
Getting a bit of info on the township planning can be helpful too. This is particularly useful if you are planning on buying a house in a new developing zone.
The exigency plans, the unique features of the town and the overall demands and necessities of the particular property all come to play when you start looking for information.
This can also impact your overall house buying objectives too.
17. Visit the Showroom
Most well-known developers have a showroom that helps you take a sneak peek at the property you may be planning to invest.
So before you start the actual search, it is always better to look for maximum possible information on the property.
18. Find Out All the Property Information
Don’t ever settle for vague details. Before you finalize a property, ask for all sorts of information like whether it is a freehold or a leasehold, the potential completion date, the exit clauses, the downpayment terms and the like. This will help you get a better grip on the details and aid the selection process.
Find out this article on 26 information you should know before buying a house.
19. Is There Any Toll You Need to Pay?
Getting a grip of the incremental cost is crucial. Do you have to pay any road toll for traveling to and from your new house? If so, calculate how many tolls you have to pay on any given day. Check the amount and calculate the net payment outflow for you.
Let’s say, both you and your spouse have to pay this toll, and it is about RM2/toll. So, on a monthly basis, it will be RM180 for two people. Calculate the annual outgo and check if you are up for it.
20. How Convenient Is the Place?
Whether you are buying a house for investment or staying, convenience is a crucial element. It is always vital to ascertain the proximity of markets, malls, hospitals and the like.
This will ensure that your stay will be comfortable and also you will get a good price appreciation if you plan to sell it.
More importantly, it is also a necessary pre-condition when you plan to rent out the property.
21. Study the Appreciation Potential of the House
When you are looking for a house, do not just be happy with the way, it addresses your current needs. Think about how it can materially address your future requirements.
More important that will also determine the extent of price appreciation potential the house promises.
This is why you must consider this factor not just in terms of the money you spend but also narrowing down the location and size of the property and future township planning.
22. Is There Any Public Transportation Available in that Area?
Often this is one of the most common misses when you set out for looking for a house.
You check for facilities within the house like how many parking do you have, how far is it from the KL city and the other features.
But what one often misses is checking the availability of public transport. Well, you may think you have a car and why should you bother.
Well for starters, it determines the accessibility of your property, and most importantly, it will also impact the extent of price appreciation in the future.
23. Find out the Exact Site Location
It is never sufficient to just go by the developer’s word.
If you are planning to invest in an under construction property, then you must look for the exact site too.
For example, the developer wrote that the shopping mall is only 20 minutes from the house. Well, that is true when there is practically no traffic, but in peak traffic hours, it can take as long as 45 minutes.
Only when we reached the exact site location, we understood the exact dynamics of the situation and took a call accordingly.
24. Know Your Rights
It will not be wrong to say that buying a house often involves a certain property knowledge.
This is why it is very important to do some study and also know your rights. For example, do you know you are entitled to withdraw EPF money for house purchase, do you know how much can you withdraw and how can you withdraw it?
Do you know if the developer delays the project completion, under HDA act, the developer will need to pay you 10% annual interest calculated base on daily basis?
Do you know that under HDA act, you are entitled of 24 months defect liability period, developer will need to fix all the defects within this period.
A reasonable and fairly deep insight of knowledge is crucial to protect your own interest.
25. Consult an Experienced Realtor
Last but not the least; speak to professional realtor in the sector.
A professional real estate agent can guide you on choosing the best interest loan and showing you the best property that suit your purpose.
Often it might help throw perspectives that you may not have considered. Most importantly, this will help you take a realistic third perspective on the deal.
Buying a house has never been a simple task. You have to consider multiple factors in one go.
Most importantly is to clarify your purpose and then proceed towards to take action.
In case you are wondering what those are, simply follow this easy guide of the 25 things to do before buying a house and finalize your dream house.