Over the years in the real estate industry, I've noticed one phenomenon, i.e. many people tend to seek service from a registered estate agent (REA) without knowing exactly what they want! Here's a simple guide or questions rather, that can help you to determine what you want before looking for a REA, hence making things easier for a REA to work on your instruction more precisely.
Qualifying process:
(1) What is the purpose of this instruction?
- Investment
Then you are looking at tenanted properties, giving you consistent rental income with possible growth in capital value.
- Owner-occupier
Then you are looking for properties that can deliver vacant possession, i.e. that even if it's tenanted at the time of buying, but the tenancy can be terminated, giving back to you the right to use the property at a timely manner.
(2) Budget
What's the initial outlay and installment that you can afford? For a residential property, you should be prepare minimum 15% for the house price as initial outlay, i.e. 10% for the downpayment, balance 5% for the incidental costs such as legal fees and stamping. The monthly installment figure should not be more than 30% of your monthly net disposable income. Net disposable income is the balance sum of your monthly gross income less monthly commitment with financial institution, such as car loan or other mortgages.
For example,
Gross Monthly salary = RM5000
Car Installment = RM1000
First house Installment = RM1000
Then your net disposable income is equals to :
RM5000 - (RM1000 + RM1000) = RM3000
Monthly installment that you can afford now = 30% @ RM3000 = RM1000
Based on the above calculation, your loan approval should be hassle free, provided you are not blacklisted under CTOS or CCRIS. This is how the banks look at your financial standing as to how much you can afford to pay monthly.
(3) Buying a house for owner-occupier purpose
After decided your budget, few things you need to determine here:
- Location
- Landed or highrise
- Number of rooms
- Prefer house with renovation or without
- Value added features such as gated and guarded
- Orientation , if that's of importance to you
By now, you should be able to know clearly what sort of house that you are looking for. The REA can now work effectively as per your instruction.
Over 30 years of experience in Iskandar Malaysia's property market, Johor Bahru -based registered estate agency, Tiram Realty, offers FREE tips and info on the selling, buying, renting and auction of properties in Iskandar Malaysia through the blog.
3 comments:
This post will help homebuyers that are planning to hire or consult real estate agent. Thanks for sharing this.
Pia | Philippine real estate
One thing i like about hiring a real estate agent for home buying deal is that good an real estate agent can make your home buying process easy and smooth process.
Newbuy
Hi,The pressure comes from a variety of areas, not the least of which is the fact that a lot of do-it-yourself tools with Registered Agents in Qatar are now available which lead business owners and managers to believe that they know what’s going on in the business. Thanks....
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