Buying a house can be an intimidating experience, especially if this is your first time. That is why getting yourself prepared for all the steps involved in the lengthy process will help to ease your worries and ensure a smooth-sailing experience. Follow our Homeowner’s Guide to purchasing the right property and equip yourself with the right information, documents and tools before making the Big decision.
A HOMEOWNER’S GUIDE TO PURCHASING A PROPERTY
CHOOSING THE RIGHT PROPERTY
- Purchase a property that is within your budget.
- Stop by the actual location of the property to access the surrounding environment.
- Visit the Show Unit, if available, to get a realistic perspective of its floor layout, specifications, quality of workmanship as well as some tips on renovating your home.
IT’S ALL ABOUT LOCATION
- Decide where you want to live. Ask yourself these questions:
- Is the property located in a safe neighbourhood?
- Are there private access roads leading to the property?
- Is the property gated and guarded?
- Is the location easily accessible from everywhere else?
- Find out if the neighbourhood is supported by public amenities and other infrastructure such as schools, commercial centres, transportation system, etc.
PLANNING YOUR FINANCES
- Make sure that the purchase price is affordable to your budget.
- Decide on your source of funding:
- Will you be obtaining a home loan from a financial institution?
- Will you be withdrawing your savings from your Employees’ Provident Fund (EPF)?
- Is the property gated and guarded?
- Is the location easily accessible from everywhere else?
- If you decide to apply for a home loan, find out whether a Fixed rate home loan or a Flexi home loan would be more suitable for you. Pay a visit to several banks for a comparison. Consider the interest rates and term loan.
- Prepare the following documents for your banker to submit your loan application:
- Original copy of the S&P Agreement.
- Photocopy of the document of title (can be obtained from the S&P lawyer or housing developer).
- Photocopy of your I/C.
- Photocopy of your last 3 months’ salary slip or 6 months’ bank statement (for self-employed applicants).
- A letter from your Employer confirming your years of service and income.
- Avoid any Late Interest Charges incurred as a result of late release of the loan by:
- Applying for your loan immediately (ask your banker for a checklist of documents required for submission)
- Monitoring the process closely (follow up with your banker).
- Upon loan approval, settle the difference between the Purchase Price and the Loan Amount immediately.
- Promptly pay up all legal feels and charges incurred by the lawyer.
- Prepare the following documents for your banker to submit your loan application:
- If you decide to withdraw your savings from your EPF, here is a brief guideline on the EPF Withdrawal Procedures:
- Requirement: You must be an EPF member.
- Entitlement: You may withdraw everything from your Account 2, or the difference between the Purchase Price and Loan Amount, with an additional 10% for down payment of your property (whichever is lower).
- Procedure:
- Get an EPF Withdrawal Application form from the KWSP office.
- Submit the completed form together with a photocopy of your I/C, S&P Agreement and Letter of Offer from your end-financier.
- Produce all original documents of your I/C, S&P Agreement and Letter of Offer to the EPF personnel for verification before submitting the form for processing.
- Release of Funds: Payment will be made to your account within a period of 3 to 4 weeks from the date of submission. For subsequent applications made for EPF withdrawals, following release of funds will be made directly to your end-financier.
To confirm your eligibility to withdraw your savings from EPF to purchase a property, we recommend that you log on to www.kwsp.gov.my.
SALE & PURCHASE AGREEMENT (SPA)
All Developers are required to use the Statutory Sale & Purchase Agreements for the sale of their properties as follows:
- Schedule G – For purchase of landed properties – individual titles (terrace houses, semi-detached, bungalows, etc.)
- Schedule H – For purchase of high-rise and subdivided properties strata titles (flats, apartments, condominiums, townhouses, etc.)
LEGAL FEES & STAMP DUTY
- The legal fees payable to your Solicitor is governed by the Solicitors’ Remuneration Order 1991 which provides the Standard Scale in determining your Solicitor’s fees.
- Legal fees for SPA, Transfer & Loan Documentation are charged separately.
- Legal fees are borne by the buyer, except for cases whereby developers and financial institutions offer to bear the legal fees on the legal documentation as part of their marketing promotions.
- The Stamp Duty on Transfer must be settled within 30 days from the date of notice of assessment, failing which a penalty shall be imposed.
