Among all the purchases you will make in your life, buying your first home may be the most daunting. A first time home buyer in Malaysia could be overwhelmed by the amount of considerations that need to be taken before signing on the dotted line, or, in this case, several dotted lines (think booking form, Sales and Purchase agreement, loan agreement etc.)

Fret not. Help is here to get you started.

Tip 1: Knowing the purpose and suitability of your first home purchase. 

Very often, there is a mismatch between a dream home and a suitable home, especially for a first-time home buyer in Malaysia. This is because you may not be clear about your intention for buying a home. Is the property for your own stay? Or is it an investment property to rent out?

If it is for your own stay, do you prefer landed property or a high-rise unit? How many people will be staying in it? How far will you need to travel for your daily commute? What sort of surroundings/amenities do you prefer – a place that is laid back and ‘away from it all’ or one that is more vibrant with an urban beat and bustling vibe?

Mah Sing home buyer

Photo by chuttersnap

If it is for investment, what sort of tenant profile are you looking for? Families? Single working adults? Expatriates? These and other factors will determine the location and size of the property you intend to buy.

Once you have determined what sort of home suits your purpose, you will be more focused on where to look and more importantly, what to avoid.

Tip 2: Do you prefer a clean slate or a place with bells and whistles?

 

With the purpose in mind, do you want a property that is empty so you have full control over its furnishings and fittings? Or do you prefer a fully–furnished one to save you the hassle of turning a bare unit into one you can live in? Many developers are offering value-added packages for interior decorating for those who appreciate moving into a unit that is kitted-out to varying degrees. These packages can be a better bargain than engaging external interior design services separately.

  

Tip 3: How will you finance your home purchase?

In Malaysia, home buyers typically have to fork out a minimum of 10% down payment for properties which will be financed. A first-time home buyer can benefit from programs available to facilitate home-ownership. The My First Home Scheme (Skim Rumah Pertamaku) allows first-time home buyers, aged 35 and below, to obtain 100% loan from financial institutions on properties valued between RM100,0000 and RM400,000. A pre-requisite is a monthly income not more than RM5,000. Do explore other schemes such as the BSN My Home (Housing Scheme for Youths) where stamp duty on the transfer of ownership and facility documents are exempted and initial assistance with monthly instalments is also provided, as well as programs like Perumahan Rakyat 1 Malaysia (PR1MA), Rumah Selangorku and Residensi Wilayah which aims to provide affordable housing to certain income-segments of the population.

It is also important to determine what sort of home loan/financing will suit your appetite/ repayment capability which will require a basic understanding of loan offerings in Malaysia.

House Purchase

Photo by Kelly Sikkema

Tip 4: Additional costs in purchasing a home for first-time home buyer in Malaysia 

If you are buying a home for the first time, you may not be aware of the miscellaneous costs that come with home-ownership. There is the stamp duty for transferring ownership title – also known as the memorandum of transfer (MOT) – that is calculated as 1% for the first RM100,000; 2% on the next RM400,000; and 3% on the remaining amount. There is also the Sales & Purchase Agreement (SPA) legal fees, which is 1% for the first RM500,000; 0.8% on the next RM500,000, and between 0.5% – 0.7% for the subsequent amount. SPA stamping fees may cost about RM100. There is also the SPA legal disbursement fee, loan agreement legal fees, stamp duty for loan agreement, loan facility agreement legal disbursement fee, and not to mention, government tax on legal agreements. Some developers offer attractive subsidies or exemptions for the above fees.

For high rise condominiums and gated/guarded communities, there is also the service charge or maintenance fee and sinking fund that owners need to pay. New property launches may throw in free maintenance for a certain number of months so you may also garner significant savings.

With the above tips in mind, you are now better informed to embark on your first home-buying experience, god-speed!

MAH SING’S PROJECTS