Issue # 3
30
PROPERTY360DIGEST
PROPERTY360DIGEST
Issue # 3
31
TALKING POINTS
Things
Nobody
Tell You
About When
Buying a
Home
Your enjoyment could quickly turn to frustration if you make the wrong decisions.
buy it. After all, the bank says that your
mortgage will only be RM1200 per month,
so you can pull that off, right? WAIT A
MINUTE!
Here are some additional expenses that
come with buying a home: water, electricity,
property taxes, home owners insurance,
gardening, maintenance or security fees,
home maintenance costs for when things
break (and they will), furniture to fill the
home, a washer and dryer (now that you
don’t have those nice laundry facilities)
and all the kitchen appliances that were
provided in your rental home.
These expenses fluctuate on a monthly
basis, so you must set aside a little nest
egg: —Does buying still seem enticing?
With Gunaprasath Bupalan
Since the start of the year, I’ve been advising
folks over the radio during my Property On
Traxx show to invest in buying a home (if you
haven’t already). I’ve also mentioned that a
home purchase must be a smart one and not an
emotional one.
2. Hire a Buyers Agent
As exciting as owning your first home, moving up
the housing ladder, or investing in property may
be, there are a few things you need to be aware
of.
In this issue of Talking Points, I’m KEEPING IT REAL. I’m going
to share with you, things no one actually tells you when buying a
property.
Home ownership is an exciting
experience and one that should
be enjoyed, but the excitement
can quickly turn to frustration if
we don’t know all the ins and outs
of purchasing a home. Don’t learn
the hard way — do your research!
Remember, sellers often make
mistakes too!
You need to be able to discover
these mistakes from a buyer’s
perspective. This could help you in
negotiating and give you an advantage
when talking with the sellers.
Here are some things you may
want to consider:
1. Should You Really Give Up a Great Rental to Buy?
How many times have we been told that home ownership is
a smart investment and we should stop
throwing away money on rent?
Let’s take a step back and think about
this scenario. Let’s play devil’s advocate.
Let’s assume that you are currently renting
a nice little apartment for RM1000 per
month. Air-conditioning, electricity and
other utilities are included, there is a nice
fridge, oven, dishwasher and microwave
provided, and there are great laundry
facilities available. In this situation, you
know that your monthly costs are exactly
RM1000 per month.
Now, let’s pretend you forgo this lifestyle
because you dream of owning your own
home. After house hunting, you find your
decisions, decision…and more decisions.
dream home, so of course you excitedly
If the list of expenses I
mentioned earlier doesn’t scare
you, and you still feel ready to
buy, then hire a very reputable
buyer’s agent.
These are real estate agents
that are meant to solely represent
you and help you negotiate the
best possible price. These agents
are supposed to be professionals
and highly skilled at negotiating.
There is only one cautionary
tale when it comes to buyer
agents — they are only human
so, of course, their own financial
gains are also being taken into
consideration. This means that
the more you pay for the home,
the more the agent makes in
commission.
You need a buyer’s agent to
help you negotiate, but their sole
goal may not be to get you the
lowest possible price. It is best to
politely, yet firmly, push for the
price you want and then have the
buyer’s agent negotiate for this price.
In other words, don’t go into this blindly
and assume the agent will do all the work
for you. You need to be your own proactive
advocate when it comes to the negotiation
process.
I would suggest looking at agents from
reputed firms such as Knight Frank, Zerin
Properties and REMAX Malaysia. I know
some big shots from these firms and they
are very genuine agents.
3. Buy a Home That You Can Really
Afford
There is nothing worse than living in a
glorious home that is devoid of furnishings
because you are too broke to buy a couch.
Getting a great mortgage rate can make
monthly payments a little less harsh (and
hopefully allow you to have some money
left over for furniture).
In order to get a great mortgage rate, it
is best to get your credit score as high as
possible before pre-approval. Some people
swear off credit applications a year before
buying a home to increase their score. Of
course, it also helps if you pay all your bills
on time.
There are numerous online calculators,
such as the one we have on our website
www.property360digest.com, that helps
you calculate just how much you can really
afford. Many websites also suggest that
you “try before you buy”.
Here’s a tip I normally give during my
talks to first-time-homebuyers - before
buying, try setting aside the monthly
expenses for the home you
plan to buy (minus what you are
paying now in rent/mortgage).
If you can pull this off for a few
months, then you’ll have a little
nest egg, and you’ll know that
you can probably afford the
monthly payments that come
with the new home you want.
4. Buy in areas that are close to
schools, even if You Don’t Have
Kids
Bring in the agent if you want it done proper.
This is one idea that you have
probably heard before, but it
bears repeating. Buying in a well-
known, high-rated school district
is like investing in a sunscreen
business in the tropics — it’s a
winning scenario.
Maybe you don’t have children
and never plan to, but when it’s
time to sell your home, the new
buyers are likely to be looking for
a great school close to home for
their kids.