Tips towards owning your dream homeVictor Lim (Principal, iProp Realty Sdn Bhd)
June 12, 2007
June 12, 2007
Whether your dream home is yet to be constructed or already standing, research is a key element you shouldn't miss out on.
Here are some tips that might help you in the quest of an ideal place to call your own:
Tip #1: Determine your wants and needs
Before you breakout in a cold sweat after being thrown in the vast market filled with a myriad of choices, sit down and put your thinking cap on. Determine the type of home, location, size and price.
Ask yourself questions: What type of home am I looking for? How many rooms do I need? Which location will best suit my purpose? You should also identify the additional features you would enjoy in a home. What are your expectations about the property and how long you plan to live in?
Location plays a very important role in the price of a home as well as the re-sale value. Make the list of possible locations you would like to buy a home. After looking at the houses in all the locations of your choice, you will have a better understanding of the price range, type of property available, school, public transport system, offices, shopping complexes and other factors that are important to you. The bottom line is that you should be clear about the location in which you want to buy a home.
Secondly, no matter what people say, size does matter! If you have a big family, you need a home with a bigger built-up area and one with more rooms. Or if you're a car enthusiast and are lucky enough to own a few, you might want to find a home with a generous car porch. Take into consideration your lifestyle and make a decision that will fit you perfectly.
Lastly, you should find a home that fits your budget. But if you can't seem to manage numbers, find the expertise of a real estate agent of a loan broker and from the personal and income information you have provided, they are able to calculate your affordable price range and monthly installment.
Tip #2: Get pre-approved for a home loan Once you have determined your budget, you might want to obtain a pre-approved home loan, even before you even go out to hunt for your dream home. Simply because you would not want to get caught committing to buy a home at a certain price but later down the road discover that you have problems obtaining a loan, especially if you have paid an earnest deposit. You might face the risk of your earnest deposit being forfeited by the seller.
Tip #3: Ways to find your dream home
There are many ways and channels for you to find your dream home. However, it isn't as easy as it looks as a first-time homebuyer. Due to a lack o experience in property transactions, you might find it difficult even at the starting stage.
But if you are still adamant to go it on your own, try driving around neighbourhoods you're interested in and search for "For Sale" signs. Or if you can't seem to find the time, you might want to peruse the local newspaper or go online to get to know properties that will suite you.
Or you can chose to call on the expertise of a real estate agent. Based on the criteria you provide to them, agents are able to find sellers that meet your criteria.
Tip #4: Search the Home for Buying
After selecting several properties of your interest and meeting with a bank officer, the real fun begins - its time to see your potential home. Not just one, make sure to visit a variety of homes that fit your criteria and budget so you can compare what' on the market. You should analyze the homes you have visited and rank them according to your need. Decide which will serve your purpose and which will be more than your expectations.
Check out the neighborhoods, schools, crime rate, traffic, zoning, and work commutes. Visit properties you are seriously interested in at various times of the day to check traffic and congestion, parking availability, noise levels and general activities.
What may seem like a peaceful neighborhood at lunch can become a loud shortcut during rush hour, and you would never know it if you drove by only once.
Shop aggressively. Unless you are under the gun time-wise, look at as many homes as possible to get a sense of what's available. Don't rush into buying if you don't have to, some expert's say you need to look at 100 homes before you can decide on one.
Tip #5: Negotiation process
Once you have found a home that meets your needs and standards, it's time to make an offer. You will already know the most you can spend from the pre-approval process, and since you have seen so many properties, you probably will have your own ideas on what the property is actually worth.
If the seller accepts your first offer, congratulations! However if the seller rejects your offer, come back with a counter-offer. This negotiation process can go on for a short or long period of time, depending on factors such as the motivation of the seller, the local real estate market, and a host of other factors.
Tip #6: Get a good lawyer
Once your offer is accepted by the seller, you need to find a good lawyer to prepare the Sale and Purchase Agreement (SPA). Normally, you need to sign the SPA within a stipulated time (i.e. 14 days).
In the event of unforeseen circumstances and the 14 day period is not sufficient, ask your lawyer to write to the seller's lawyer to request for an extension. If you keep quiet, the seller might exercise his or her right to forfeit your deposit money.
Prior to the signing of SPA, make sure to have a thorough home inspection performed by a qualified and certified home inspector. A home inspection will protect you from flaws in the construction and condition of the home that are not obvious to the naked eye.
Home inspections can uncover things like foundation cracks, termite infestation and other home quality issues, this will eliminate any surprises after you move into your new home and if the above problems were discovered prior to the signing of the SPA, you may want to re-negotiate or withdraw from deal and demand a refund for all the money you had paid (depending on terms agreed).
If the home is furnished, ask the seller to give you an inventory list and attach it to the SPA. This list is useful during the handling over stage. It serves as a checklist for the stuffs that the seller has promised to give you.
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Tip #7: Loan closing
Once the SPA is signed, the next thing to do is to present your SPA and other documents to the bank to secure your loan, your lawyer should be able to assist you on this. And normally, you will be given three to four months to settle the balance sum. Make sure you check all the terms and conditions in the loan agreement carefully before you sign. This is to ensure that you are getting the kind of loan package you intended to get in the first place.
Tip #8: Handling over
Once your bank has released the balance sum to the seller, its time for you to collect the keys and move in. However, you might want to perform a joint inspection with the seller or the seller's agent to ensure the home is what you expected and paid for. Use the inventory list to check the items in the home, if there are any discrepancies found, you may ask the seller to rectify the problems or compensate you. Although the process may seem intimidating at first - take a deep breath and jump in, not blindly but take the plunge prepared! In the end all the homework you did will pay off as you enjoy the atmosphere and lifestyle you have chosen - a reward well deserved! And you'll find yourself knowing a bit more about property in the process.
