Buying a new house is an exciting and significant milestone in anyone’s life. Whether you’re a first-time homebuyer or looking to upgrade to a larger space, the process of purchasing a property can sometimes feel overwhelming. But fear not! In this article, we will guide you through 10 simple steps to help you navigate the process of buying a new house in Malaysia. So, let’s dive in and make your dream of owning a home a reality!

1. Prepare your budget

The first step in buying a new house is to prepare your budget. Determine the amount you can afford and save up for the down-payment, which is usually around 10% of the total cost of the property. Don’t forget to consider additional costs like stamp duty, legal fees, agent fees, and mortgage insurance. Keep an eye out for financing opportunities from the government, especially if you’re a first-time homebuyer.

How much does a house cost in Malaysia?

In Malaysia, property prices exhibit significant variations based on factors such as property type and location.

The median property prices generally fall within the range of RM300,000 to RM500,000. Terrace homes typically span a price range of RM300,000 to RM800,000, whereas condominiums and apartments typically range from RM300,000 to RM600,000.

How much upfront costs to prepare?

When planning your budget, it’s important to consider that upfront costs encompass more than just the down payment.

Item	Rate
Down Payment	Around 10% of property purchase price
Stamp duty on Memorandum of Transfer (MOT)	1% – 4% of property purchase price
Stamp duty on Sale and Purchase Agreement (SPA)	RM10 per stamping
Stamp duty on loan agreement	0.5% of loan amount
Real estate agent fees	3% of property purchase price
Mortgage insurance (MRTA/MLTA)	Subject to your situation/needs

Miscellaneous fees and charges

In addition to the fees mentioned earlier, such as the earnest deposit, down payment, stamp duties, and agent fees, it is advisable to have a cash buffer available to cover other expenses that may arise during the property purchase process. Some of these additional fees may include:

>> Bank processing fees: Banks may charge various processing fees related to your home loan application, such as application fees, documentation fees, or loan agreement fees.

>> Legal fees for the Sales and Purchase Agreement (SPA) and loan agreement: Engaging a lawyer to handle the legal aspects of the SPA and loan agreement typically incurs fees. These fees cover the lawyer’s services, document preparation, and legal advice.

>> Property valuation fees: In some cases, you may need to obtain a professional property valuation to assess the market value of the property. This valuation fee is typically paid to a licensed valuer.

It’s essential to keep in mind that the specific fees and amounts may vary depending on factors such as the property value, loan amount, and chosen professionals or service providers. It’s recommended to consult with relevant experts and obtain accurate cost estimates for your particular property transaction.

2. Find the property

Location plays a vital role when searching for a property. Use trustworthy online marketplaces or enlist the help of a property agent who can guide you through the process. These experienced professionals have in-depth knowledge of the market, can assess the reputation of developers, and navigate the complexities of legal paperwork.

3. Compare the cost (market research)

Once you’ve found a property that catches your eye, take a step back and don’t rush into a decision. Compare the price with other similar units or properties in the area. Explore multiple marketplaces to get a general idea of the property’s market value. This research will help you determine whether it’s a good deal or not.

4. Secure financing (bank loans)

Check your CCRIS Report and CTOS score regularly to assess your eligibility for a loan. Consider applying for a loan from multiple banks to compare interest rates and terms offered. This will ensure that you secure the best financing option that suits your needs.

5. Employ a lawyer

Hiring a lawyer specializing in conveyancing is crucial to protect your interests throughout the buying process. Conduct thorough research, review their experience, and verify their registration with the Malaysian Bar. It’s also important to ensure that their rates align with your budget.

6. Letter Of Offer/Intent To Purchase

The Letter of Intent to Purchase is a document stating your intention to buy a specific property. It is typically combined with an earnest deposit, which constitutes 2% of the total cost of the property. This deposit also counts toward your 10% down-payment requirement.

7. Sign The SPA

Involve your lawyer in the process of signing the Sales and Purchase Agreement (SPA). Seek clarification from your lawyer regarding any doubts you may have. The SPA is a critical legal document that outlines the terms and conditions of your purchase. It’s essential to understand every aspect before signing off on each page.

8. Sign Loan Agreement And MOT

In this step, you’ll sign the Loan Agreement and Memorandum of Transfer. These legal documents facilitate the transfer of ownership for properties with either a Strata Title or an Individual Title. Your lawyer will guide you through the process and ensure everything is in order.

Types of Property Titles

Types	Description
Master Title	Title document held by the developer or landowner at the point of construction.
Individual Title	Individually located properties such as landed properties.
Strata Title	Condominium/apartment complexes where individual property units form part of a larger shared development.

Types of Property Documents

Types	Description
Letter of Offer	Document which sets out your initial desire to purchase, and a seller’s willingness to sell.
Sale And Purchase Agreement (SPA)	Comprehensive agreement setting out the terms and conditions of a purchase.
Loan Agreement	Legal document to officially confirm the home loan agreement that you have signed with your bank.
Memorandum Of Transfer (MOT)	Document which legally confirms the actual transfer of ownership.

9. Pay Fees And Costs

After signing the SPA, it’s time to pay the remaining portion of your 10% down-payment and ensure that your home loan payment is transferred accordingly. Stay organized and keep track of the necessary fees and costs associated with the purchase

10. Receive The Vacant Possession

The Notice of Vacant Possession must be completed within the stipulated time frame of 36 months of signing the SPA for strata-titled properties and 24 months for individually-titled properties. This is when you can finally receive the keys to your new home and embark on the exciting journey of homeownership.