Purchasing a home is widely regarded as a major accomplishment, but is it as straightforward as buying a cup of coffee at a café? Acquiring a property is one of, if not the most significant financial commitment you’ll ever make. The dwelling you select will serve as your sanctuary, a place of safety, and comfort. It’s where you’ll raise your children and share your life with your significant other.

Why did You Buy it? What Are You Buying? Determine Your Budget Who Are You Buying From? Location Financing The Purchase Of Your Desired Property Securing Property Property Sale Completion Find A Good Real Estate Agent Inspect Properties And Negotiate Prices Moving Into The House in Malaysia

Acquiring a house involves numerous factors to consider. From the property’s location to financial planning, it can be quite daunting. However, purchasing a home is one of the most fulfilling experiences in life, particularly if you’re prepared to establish roots with your family or searching to buy property for an investment opportunity.

Wondering how to go about purchasing a house? This is a systematic guide on how to acquire property in Malaysia.

 

Knowing Why You Buy?

Understanding the motive behind purchasing a property is crucial before embarking on a dream house–hunting mission. Ask yourself this question: Why do you want to buy a house, and what is the purpose?

There are, generally speaking, two main reasons for buying a house or property: for personal occupancy or investment purposes. It’s crucial to know the reason since it determines the kind of property you should acquire. Unfortunately, many individuals make the mistake of purchasing a property for the wrong reason, leading to a hasty sale and losses incurred after factoring in transaction costs such as legal and agency fees. Besides, with the current market saturation, selling a house is challenging, and it may take time to find a buyer.

1. If you buy for own-stay

If you’re buying a house for personal occupancy, it’s essential that the property meets the needs of you and your family. This should be the top priority, more important than the potential appreciation of the property. While it’s always a bonus to own a house with good investment potential, your primary focus should be on ensuring that the property satisfies your family’s requirements.

2. If you buy for investment purposes

When buying a property for investment purposes, the primary concern is the potential return on investment. Here are some key factors to research before making a purchase:

• Location:

  Consider the property’s location carefully, as this will influence its rental yield and potential for appreciation.

• Rental yield:

  Research the rental yield for properties in the area to determine how much income the property can generate.

• Future potential:

  Look into the area’s development plans to gauge whether there is potential for future rental and price appreciation.

• Cash back period:

  Determine how long it will take to recoup the initial investment and consider whether this is a suitable timeline for your financial goals.

• Expected annual return on investment:

  Crunch the numbers to estimate the annual return on investment, factoring in potential expenses such as mortgage payments, maintenance costs, and property management fees.

By carefully analyzing these factors, you can make an informed decision to buy the property and determine whether a particular property is a wise investment opportunity.

 

What are you buying?

To choose the perfect property for sale in Malaysia, it’s important to have a clear understanding of your preferences. Begin by identifying the ideal size, type, location, and price range to narrow down your options. By following these steps, the process of selecting your dream property becomes simpler.

It’s also essential to consider the facilities and amenities provided, particularly if you’re considering a high-rise unit. Check the condition of the building’s facilities, such as the swimming pool, gym, and recreational areas, to ensure they meet your requirements. Additionally, examine the amenities provided, such as security features, parking spaces, and nearby shops or restaurants, to determine whether they align with your lifestyle.

 

Determine Your Budget

Before beginning your property search, it is crucial to determine your budget. Most financial experts will advise that the minimum value of your monthly installments should not exceed one-third of the minimum value of your household income. Hence, say you have a total combined income (if you have a rental income and a spouse) of RM9,000; the minimum threshold for the monthly installment of your first home must not be more than RM3,000.

You will also want to get your finances in order. Ensure that you are up-to-date on your credit card repayments and your other loan repayments such as housing loans such as car loans and study loans (PTPTN) if you have them. You will also need a minimum of 3 months’ salary slip if you are on fixed pay, and a minimum of 6 months’ salary slip if you are on fixed plus commission pay.

 

Who are you buying from?

Knowing who you are buying from is an important aspect of buying a house, as it can impact the entire buying process. You may be buying a new house from a:

1. Developer: If you are buying a new construction, you will be dealing with a developer. It is essential to research the developer’s reputation, track record, and financial stability to ensure that they deliver the property as promised.
2. Individual seller: If you are buying a resale property, you will be dealing with an individual seller. You may want to conduct due diligence on the seller to ensure that the property has a clean title and that there are no encumbrances or legal issues.
3. Real estate agent: In some cases, you may be buying a property through a real estate agent. It is essential to research the agent’s credentials and track record to ensure that they are reputable and trustworthy.

Regardless of who you are buying property from, it is crucial to take the necessary steps to protect yourself and your investment. This includes conducting due diligence on the property, ensuring that all legal requirements are met, and seeking professional advice where necessary.

 

Location:

Location is undoubtedly one of the most critical factors to consider when buying a home. The location of your property can affect various aspects of your life, such as the amount of money you spend on your mortgage and the time you spend commuting. Additionally, the area surrounding your home can significantly influence your lifestyle.

If you prefer a peaceful and tranquil environment, a rural area may be an ideal location for you. However, if you enjoy being close to shopping centers, entertainment venues, and a vibrant community, you may be better suited to an urban neighborhood. Ultimately, it’s essential to assess your priorities and determine what kind of location will best suit your needs and preferences. When choosing a location, you should consider factors such as:

• Proximity to your workplace, schools, and other essential amenities
• The neighborhood’s safety and security
• Access to public transportation and major roads
• Availability of shopping, entertainment, and recreational facilities
• The local community’s culture and demographics

 

Financing the purchase of your desired property

Cash Buyer: If you are a cash buyer, you need to ensure that the funds are available and ready when the payment is required. This means that you should have the full purchase price of the property in your bank account or ready to be transferred when the time comes. It’s also important to note that there are additional costs involved in buying a property, such as legal fees, stamp duties and duties, and insurance, which you need to factor in when calculating the total cost of the sale and purchase agreement. Having a clear understanding of the costs and ensuring that the funds are available can help make the process of buying a property smoother and stress-free.

Non-Cash Buyer: If you’re not a cash buyer, there are various financing options available to help you to balance the purchase price of your desired property in Malaysia. Here are some common financing options:

1. Home Loan: This is the most common financing option for property purchases in Malaysia. You can obtain a home loan from banks or other financial institutions. Home loans typically require a down payment, which is usually a percentage of the property’s value, and the loan amount covers the remaining balance. Home loans usually have a fixed or variable interest rate and a repayment period of up to 35 years.
2. EPF Withdrawal: If you have an Employee Provident Fund (EPF) account, you can withdraw a portion of your savings to finance the purchase of your property. The amount you can withdraw depends on your savings and the property’s value.
3. Personal Loan: You can also apply for a personal loan from a bank or other financial institution to finance your property purchase. However, personal loans usually have higher interest rates than home loans, and the repayment period is shorter.
4. Developer Financing: Some developers offer financing options for their properties, such as a deferred payment scheme or a rent-to-own scheme. These schemes allow you to pay for the property over an extended period, making it more affordable.

It’s important to note that each financing option has its own terms and conditions, and you should carefully consider your financial situation before selecting a financing option. You should also shop around and compare the interest rates and fees offered by different lenders to get the best deal.

 

Securing Property:

It is important to note that securing a property in Malaysia involves several legal and financial procedures. Here are some steps that you can take to ensure a smooth and secure property purchase:

1. Hire a reputable lawyer:

   Engage a lawyer who is well-versed in Malaysian property laws to guide you through the entire process. The lawyer will ensure that all the legal documentation and procedures are in order and will protect your interests throughout the transaction.

2. Conduct due diligence:

   Before committing to the purchase, conduct a thorough investigation of the property to ensure that there are no legal or financial issues. This includes checking the land title, outstanding debts, and any encumbrances on the property.

3. Sign the sales and purchase agreement:

   Once you are satisfied with the property, sign the sales and purchase agreement (SPA) within 14 days of the sales form or offer to purchase. This agreement should outline the terms and conditions of the sale, including the purchase price, payment terms, and any other relevant details.

4. Pay the deposit:

   Pay the 10% deposit to the seller or developer, as stipulated in the SPA. This deposit will secure the property and show your commitment to the purchase.

5. Obtain state authority consent:

   Your lawyer will need to obtain state authority consent to transfer the property to you as a foreign buyer. This involves submitting relevant documents such as the SPA, your passport, and other transactional documents.

6. Stamp duty and other payments:

   As the buyer, you will be responsible for paying stamp duty, which can be up to 3%-4% of the purchase price. You will also need to make other necessary payments, such as taxes and legal fees.

By following these steps and working with a trusted real estate lawyer here, you can ensure a secure and hassle-free property purchase in Malaysia.

 

Property Sale Completion:

It is important to note that the completion of the property sale in Malaysia may involve additional steps and considerations depending on the specific circumstances of the transaction. For some property prices for example, if the property is being purchased through a trust or company structure, there may be additional legal and tax considerations that need to be addressed.

Furthermore, foreign buyers should also be aware of the ongoing maintenance and management fees associated with owning a property in Malaysia, which can vary depending on the type of foreign ownership and location of the property. It is important to budget for these ongoing maintenance fees and expenses to avoid any financial surprises after the completion of the sale of the landed property.

Overall, with careful research, negotiation, and guidance from trusted professionals, buying a property in Malaysia as a foreigner can be a rewarding and profitable investment opportunity.

 

Find a Good Real Estate Agent:

A good real estate agent can help you navigate the complicated process of buying a property in Malaysia. Look for agents who have experience in your desired location and property type. A good agent will be able to provide you with insights into the local property market, help you find properties that meet your needs and budget, and negotiate on your behalf.

 

Inspect Properties and Negotiate Prices:

Once you have identified a few properties that meet your needs minimum requirements and budget, it is time to inspect them. Arrange for viewing with your real estate agent and pay close attention to the property’s condition, location, and amenities. If you are considering a high-rise unit, do not forget to check the conditions of the facilities and the amenities provided.

If you are interested in a property, it is time to negotiate the price. Make an offer or lower price that is reasonable based on the property’s condition, location, and market value. Your real estate agent can help you with the negotiation process and advise you on the best approach for landed property.

 

Moving Into The House in Malaysia:

Congratulations, you’ve made it! After all the hard work, it’s finally time to move into your new home.

Once you receive Vacant Possession (VP), which should be within 36 months for a strata property and 24 months for an individual property, you can start the process of moving in. If you do spot any cracks or defects, don’t worry as the defect liability period is in effect, and the builder is required to fix any faulty workmanship. Additionally, make sure to obtain a Certificate of Completion and Compliance (CCC) from the local authority, which confirms that your new property now meets all legal standards and is safe for you to live in.

IQI Global and Your Dream House:

IQI Global is a global real estate agency and is a great platform for finding the best property in Malaysia at your desired cost. IQI is a one-stop solution for all your real estate problems. 

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So do not waste time and get to know more about real estate at IQI Global and buy the house of your dream!

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