It’s either your parents think it’s time you flee the nest, you’re getting married, a baby’s on the way or you’re ready to freefall into this thing called adulting. Whatever your motivation may be, buying your first home is a lifetime achievement, despite it being the biggest financial commitment you’ll ever make.
Everywhere you read online and everyone you speak to will most likely tell you to expect plenty of highs, lows, and sharp curves ahead — especially with our crazy housing market. But don’t let that scare you off. As with anything else, knowledge and preparation can go a long way in building confidence as a first homeowner. So, take a deep breath and get ready to make your big move with these first-home hunting tips.
So, first thing’s first.
Is it the Right Time to Buy a House?
If you are a Malaysian between the age of 25 to 35, you’re the key demographics of the property market and chances are you’re seriously considering to buy your first home- a smart thing to do especially right now during the pandemic because property prices have dipped (a delightful advantage for you).
But then again, many still adopt the wait and see approach before purchasing. Sean from iherng on Youtube explains in this video about how there’s never really a best time to buy, especially if you’re buying for your own stay. It’s as simple as this: whichever way, you need a roof over your head, so instead of paying rent, use the money for a mortgage and own a home instead. Makes sense right?
Where to Buy? Landed or High-rise?
It’s imperative to be super realistic when it comes to home purchasing, which is another way to say, manage your expectations. Yes, your parents bought their first landed home for RM250,000 in Damansara back in 2000 but today, with rising material costs, inflation, scarcer land, a growing population and a concoction of many other factors, a high-rise is your best bet for a home in a location you love.
If you’re a proud Cheras native, or simply want to live close to the city centre, M Vertica, Cheras might be your cup of tea. If you can’t imagine living away from all the superb lifestyle amenities Kepong has to offer, M Luna, Kepong is perfect for you.
Located next to the Kepong Metropolitan Park and scheduled to be completed by 2024, the two-to four-bedroom units at M Luna, Kepong will have built-ups of 700, 850 or 1,000 sq ft, fitted with air conditioners and water heaters. The selling price starts at RM385,000 per unit or RM550 per square foot (psf).
“But I Grew Up in a Landed Home, But I Also Don’t Want to Spend 3 Hours Commuting to Work Every Day.”
Many of us had that dilemma in the early stages of our first-home hunting days- to live in a landed home far away from work and spend more time and money travelling to work every day, or live in a high-rise residence that’s less than 30 minutes away. We realized that people were happier when they lived closer to work, because they didn’t need to have years shaven off their lives being stuck in daily rush-hour traffic jams.
How Much to Save for Down Payment?
When it comes to downpayments, new property ownership in Malaysia requires a 10% deposit. Don’t forget the other fees such as stamp duties which need to be paid upon purchasing. Which is why, unless you have a fair amount of cash lying around in your savings account, it is wise to buy a new property as a lot of these fees are absorbed by the developer.
New homes are more pocket-friendly (most of the time) than sub-sale homes, but if you do choose to buy from the sub-sale market, it pays to be prudent in setting aside more for the following major items:
|Downpayment||Approximately 10% of the property purchase price.|
|Stamp duty on Memorandum of Transfer (MOT)||1% for the first RM100,000; 2% for the next RM400,000, and 3% on the next RM500,000, and 4% on sums more than RM1million.|
|Legal Fees on Sales and Purchase Agreement (SPA)||1% for the first RM500,000, 0.8% for the next RM500,000 and 0.5% to 0.7% for the subsequent amount.|
|Legal Fees on loan agreement||1% for the first RM500,000, 0.8% for the next RM500,000 and 0.5% to 0.7% for the subsequent amount.|
|Stamp duty on loan agreement||0.5% of loan amount.|
|Mortgage insurance (MRTA/MLTA)||Subject to your situation/needs.|
Also This: The Post Purchase Expenditure
Have you been eyeing that island kitchen counter, imagining serving brunch to loves ones on it? Or an extensive renovation that includes delicate wainscotting to bring the space alive, coupled with fancy lighting fixtures and the latest in designer furnishing?
Although the need for interior design or renovation may not arise immediately, eventually you may consider them, thus it’s a good idea to set aside another fund to design and furnish your home just the way you desire. A change of mindset from spending to saving is vital.
But Don’t Just Look at Price, Consider Value As Well.
Before making an offer for a property, get as true a sense as you can of its value. Remember the asking price is not the same as the value – it’s the seller’s aspiration. Read up on similar homes in the area and find out how much they’ve sold for. Comparing properties of a similar size and location should give you a benchmark figure, which you can adjust by considering other factors such as which school catchment area the property is in, transport links and so on.
If the Property is Highly Rentable, It’s a Good Investment.
Another golden nugget of advice that Sean mentioned in the interview was to look to for rentability indications in surrounding property developments. High rentability is the proof of a good investment, and although you purchase a home for your own stay, should you decide to sell it in the future or pass it down to your children, there will most likely be profits to be reaped.
Choose Convenience over Design.
In fact, one of the most common factors which contribute to high rentability is the conveniences both in and around the development. Are there several small and big brand supermarkets, malls, hospitals, and schools less than 20 minutes away? For example, M Oscar, Kuchai Lama is only 9km away from Mid Valley City.
Is there an impressive list of lifestyle amenities or just the basics? Would you be content with just one swimming pool, a playground and a gym? Or would you and your family enjoy the 38 amenities M Vertica, Cheras has to offer?
Can you get to work by bus, MRT and LRT, or is driving your only option? Speaking of strategic location, the nature-inspired M Arisa, Sentul is merely 5km away from the KL city center and less than 4km away from several KTM and LRT stations with direct shuttle services provided, as well as more than 10 primary, secondary and tertiary learning institutes.
Check the Developer’s Track Record.
Judging the quality of unbuilt properties from the previous completed ones is the most sensible way to know if the developer will deliver on what he promised, on time or ahead of time. Look into the tiny details that only experienced developers will prioritise, like the automated waste collection system, QLASSIC assessment, parcel lockers and storage space for M Adora, Wangsa Melawati. Get in touch with their personnel, walk into sales galleries and view show units, participate in virtual walkthroughs and even speak to people you know who have invested properties by that particular developer.
Take Advantage of Government Incentives and Come Home 2 Mah Sing Campaign.
My First Home Scheme, BSN Youth Housing Scheme, PR1MA and the Home Ownership Campaign (HOC) initiatives by the government intend to assist first-home ownership among young Malaysians. The HOC translates to our Come Home 2 Mah Sing campaign where you can enjoy payment-free home ownership up to 4 years.
Buy the home you think you will need 3 to 5 years from now
As a single young adult, you’d want a nice one-bedroom studio; that’s great and enough space. However, chances are you might find someone, fall in love, even welcome a child; then you’ll need to go through the sale of the current home and find a bigger one. It is wise to consider with foresight and buy a home you’ll need soon to save you the extra hassle later.
Finally, Get Clarity and Ask Yourself Again: What Are You Looking for in Your First Home?
During the first home buying process, it’s natural to get excited. But it’s important to not get carried away by emotions and rush into purchasing. You can arrive at a rational decision by asking yourself a few questions:
- How long will you live in this house?
- Can you comfortably afford it?
- Is this where you would like to live?
- Does it offer room to grow?
- Is transit easily accessible?
- How long would your commute to work be?
- What are the surrounding amenities which will serve me in the future?
Buying a home can be both exciting and daunting, but the more you know, the better equipped you are to find a property that fits your needs. All the best in your first home hunting!