5 Home Buying Scenarios You Would Never Want to Be In and (How to Avoid Them)

Contributor: Cindy Chan, senior negotiator with Charlie Chan Realtors, Singapore. Contact Cindy at cindychan_agent@hotmail.com or call +6577338992

Buying a house.

Home Buying Scenarios

Buying a home soon? You sure must be excited. Oh how exciting are the prospects of looking at one house after another, and imagining building a life in them soon! But then again, just as much as you’re excited, this is also a very tense moment for you. We’re talking about a house that could eat up most of your monthly income on mortgage, on a house where you look to raise your children in – so the choice you make must be right! Oh the pressure – there’s hardly any room for mistakes!

5 home buying scenarios

But hey, with a little help and with a little preparation, things may not be so difficult at all. Here are some 5 home buying scenarios you should never be in and tips on how to avoid being in them:

Avoid the mistakes!

Avoid the mistakes!

Scenario No. 1: Paying for an Overpriced House
No one wants to lose money over something that is definitely not worth it; especially not if it has to eat a huge chunk off of the monthly budget.
How to avoid this scenario: Always make sure that you know everything the price of the house entails. Know everything from the actual price, the negotiating price, which type of monthly mortgage to sign up for (Adjustable rate or Fixed Rate), and how much the monthly rate would be. Get a separate and independent price assessment on the value of the house and make sure you do your own part as well: shop around for as many similar houses as you possibly can and weigh in on the odds. Additional Tip: use resources like PropertyReviews.my to check for pricing information.

Scenario No. 2: Signing up for a house with hidden damages.
This is worst than paying for an overpriced home. This is outright injustice, a scamming of sorts. The last thing you want is to pay for the down payment, pay for the monthly mortgage, and take in the burden of the repair costs!
How to avoid this scenario: Get a separate house inspection and make sure that your sale contract has a specified protection clause in case you find a hidden damage thereby charging the previous owners liable for the cost of the repairs.

Scenario No. 3: Buying in a Seller’s Market
As its name implies, the market is on the seller’s side, and therefore the prices would never be in your favor.
How to avoid this scenario: Postpone the purchase if you can and wait a bit until the market gets better for you. Otherwise, you’d have to rely on your haggling and bargaining skills on this one!

Scenario No. 4: Sealing your home purchase deal even before you could sell your old house.
Unless you own tons and tons of money, this is nothing but bad news. This will mean that you’d be losing money to the new home while still paying for the upkeep of your old one. Of course, you can’t just move and leave the other one behind in a bad state; you still have to maintain it to keep its market value.
How to avoid this scenario: You either pay a ‘reservation fee’ that makes you semi-own the house for a short period of time, thereby giving you enough time to dispose of your previous house, or not buy a house until your old one is sure to be sold and find a temporary shelter in between.

Scenario No. 5: Running short on budget for closing costs.
Sometimes, the closing costs can get so overwhelmingly high that they are off of most homebuyer’s budget.
How to avoid this scenario: go to your mortgage agent and ask for a Good Faith Estimate (use JPPH tools – click here). This is something that you can get even before you sign up to buy a house. You can choose to either pay it up front, or if it gets out of budget, you can always add it up to your monthly mortgage.

Editing by Jin Hsu

FSBO Tips: Quick Ways to Close a Deal on Your Home

Contributor: Aini Mat Pin, associate director at Valley Property Consultants, Ipoh, Malaysia. For enquiries, call +605-930029 or email ainimatpin@championland.net. Thank you!

Selling a Malaysian home without an agent, no matter how fun it may seem – what with all the excitement of staging and taking photos and making the listing – can be very stressful. This gets even more stressful when you try to close the deal.

So you already get an offer, or at least you got a serious offer on the home although without the formal written offer yet. This process can be quite straining since most of the technical stuff of selling a house in Kuala Lumpur is concentrated on this stage of the process.

Sidenote: much of the information here was derived from a property deal involving Binjai 8 condo at KLCC – email me if you want the insider story. :) – Aini MP

Quick Ways to Close a Deal

There are things that you can actually do to speed up the process and rid yourself of the unnecessary delays associated with closing the deal on your FSBO home sale. Here are some of them:

  • Get your papers ready. All the papers that your home buyer would need – from the land and home title, a declaration of the house’s history of repairs (legally binding by Malaysian law), the mortgage status of the house, etc – get them all ready, put them in a single envelope that’s ready to go should your buyer need them. A lot of home owners in Malaysia make the mistake of working too late or too slow on the papers that they themselves are the major cause of delay.
  • Comply with your end on the contingencies pronto. So your buyer wants you to submit an inspection report, or to shoulder the repair of a damage that she found on the second floor bedroom – whatever it is that you have agreed to get accomplished to make the sale done, do it pronto! Don’t waste a single minute of it; you may not have a hold on how soon the other party complies with their end of the conditions, but at least you’d have yours done and ready when they are.
  • Pay your real estate lawyer a visit the soonest. There are things and papers that you cannot do and complete yourself and you’ll need a legal expert’s signature on it to make it valid and legally binding. So get all those papers right and ready for your lawyer the soonest you’ve gathered all of them. Real estate lawyers are pretty busy too so you don’t want to be on the waiting list especially if you happen to be a client of a popular real estate lawyer. If you’re targeting properties in, say, KLCC (or somewhere which is as equally upmarket like Mont Kiara or Bangsar). Specifically watch out for areas like Tinjani, Binjai 8 and South Bay.
  • Go to your buyer’s mortgage lender as soon as you can. You don’t have a real estate agent to bridge the gap between you – the homeowner – and your buyer’s mortgage financier. So you have to work on whatever needs to be done between the lending institution and yourself; after all, that takes care of how you’re getting the money paid to you. So go on ahead and schedule your visit to them. We are especially partial to Maybank and CIMB because we bank with them! :)

Pro Tip: the best thing to do when accomplishing all these tasks, especially the paperwork, is to accomplish each of them as soon as the opportunity strikes. Don’t wait for them to pile up and hope to accomplish everything ‘within the day’. You’re only going to make the wait much longer for you and your buyer. Good luck!

Editing by Jin Hsu