Buying a house involves several steps, and understanding the procedures can make the process smoother. Here’s a step-by-step guide to help you through the home buying journey in Malaysia.
Do Your Research
Before you start viewing houses, it’s essential to do your homework. First, understand the local property market and the area where you want to buy. Look into property prices, trends, and future developments. Additionally, know the specifics of the properties you’re interested in, such as their condition, age, and asking price. This research will help you make informed decisions.
Viewing the Property
Once you have shortlisted potential properties, arrange to view them. It is crucial to visit the property during the day to get a clear view of the surroundings. Additionally, consider visiting again during peak hours to gauge traffic conditions. While viewing, check for any damages, the condition of the building, and the neighborhood. Look for cracks, leaks, and other issues that could be costly to repair. Note down any furniture or fixtures included in the sale.
Signing the Booking Form
When you find a property you like and agree on the price, it’s time to sign the booking form. Pay the booking fee, which is usually 3.18% of the purchase price, to the real estate agency or lawyer acting as the trustee. Understand the terms of the booking form, such as the period for loan approval and the consequences if the sale does not proceed. Ensure there is a clause for the return of the booking fee if your loan application is rejected.
Applying for a Housing Loan
With the booking form signed, the next step is to apply for a housing loan. Submit your loan application to your chosen bank and provide all necessary documents, such as your identity card, salary slips, bank statements, and EPF statement. Engage a lawyer to draft the sale and purchase agreement and handle the legal aspects of the transaction.
Signing the Sale and Purchase Agreement
Once your loan is approved, it’s time to sign the sale and purchase agreement. Sign the agreement within the specified period, usually 14 to 21 working days from the booking form date. Pay the remaining deposit, which is 6.82%, along with the lawyer’s fees. The lawyer will explain the terms of the agreement and provide an estimated timeline for completing the purchase.
Transfer of Ownership
The lawyer will handle the transfer of ownership. For freehold properties, this process typically takes up to 90 working days. Leasehold or master title properties may take longer due to the need for state authority consent or developer confirmation. If the purchase cannot be completed within the stipulated time, the seller may grant an additional month with a penalty fee, usually 8% per annum, calculated daily.
Final Steps
Towards the end of the process, your bank will disburse the loan in two stages. The first payment involves the bank settling the seller’s outstanding loan balance. The second payment involves the bank paying the seller the remaining amount. Your monthly mortgage payments start after the first disbursement, but you only get possession of the property after the second payment. Finally, transfer the utilities, maintenance fees, and assessment to your name after receiving the keys.
By following these steps, you can navigate the home buying process with confidence and ensure a smooth transaction. Happy house hunting!
