A guide to buying a second hand house
1. Contact the seller / agent and ask for the price
Find a house to buy. Get the lowest price possible before paying the house a visit. Check the "market value" of the house. Much better off to be able to buy the house from the owner himself.
More importantly, check the status of the house, whether the strata title has been transferred to the seller or not. If it is still in the name of the developer and the developer has experienced bankruptcy, difficulties will arise because it takes a long time to transfer the house.
2. View the house
Ask lots of questions, and check everything. Most importantly, see if there is a large problem that might require a major repair like roof leaks, piping problem, low water pressure, wiring in the walls, etc., especially for a house older than 10 years. Chat with neighbors and shopkeepers around the area. Ask for problems in the area such as floodings, power supply disruptions, thefts etc..
3. Ask for extra discounts
Point out all the defects/shortcomings of the house with the seller / agent (even as trivial as dull paint or an ugly sink). The idea here is to find reasons to ask for additional discounts. The seller is usually under pressure to sell, so do not hesitate to bargain.
4. Pay a deposit of 3%
Provide a deposit of 3% of the price of the house. Be careful because there are agents / sellers home that are scammers. If you have a lawyer, better pay through the lawyer. If you pay direct, use a check instead of cash, . If you do not have a checkbook, make a bank draft. Make sure you ask for a receipt as proof of payment.
5. Find a lawyer
Tell the lawyer you want to buy a house. Ask if he is handling a lot of cases at the moment, to make sure he is not was busy. Tell him that you need to complete the processes quickly. The lawyer will draft the S&P (sale & purchase agreement).
6. Apply for a loan
Apply loans from several banks. The reason being lending rates change from month to month. Maybe this month Bank A is cheap, but in the next month Bank B is cheap instead. Sometimes a branch of the same bank offer lower rate than other branches -this can happen if the branch has not reach its monthly quota. Sometimes you can also bargain for a better rate if you can show good CCRIS standing, if you are buying an expensive house, or you have lots of money in a fixed deposits etc. If rejected, try to apply loan from MBSB or insurance companies.
7. Sign the S&P
Once the loan is approved, the seller will sign the S&P (Sale and Purchase Agreement) prepared by the lawyer.
You can proceed to withdraw from your EPF’s Account 2 -the maximum of 20% is allowed for the first house. Both husband and wife can withdraw, so this can cover the 10% deposit for the house and the lawyer’s fees.
8. Pay the remaining 7%
Pay the remaining 7% of the price of the house, through the lawyer.
9. Let the lawyer do his job
This process is the longest. It may take up two months or a year. So make sure you follow up regularly. Call at least once a week for status check. Most lawyers only do things when pushed, if you sit back so does him. Only pay the lawyer when the job is completed. If you pay earlier, he will not have the initiative to complete the job quickly.
10. Get the house!
When all the lawyer’s matters got settled, your bank will release the loan to the seller. The seller will hand you the key to the house. Do not forget to transfer the water, electricity (TNB) and other utility accounts of your new home to your name.