Navigating the Home Buying Process: A Comprehensive Guide

In recent years, the property market has been unpredictable, and many people have taken the opportunity to enter the market, hoping to fulfill their dream of becoming homeowners. However, buying a property is far more than just a transaction; it involves complicated procedures, legal terms, and financial planning. A slight oversight could potentially affect your home-buying plan. So, how should you proceed from viewing properties to closing the deal? This article will comprehensively break down the home-buying process, preparing you before you get on board!

🟢 Phase 1: Preparing Before Buying a Property

1️⃣ Assess Financial Capability and Mortgage Budget

• Refer to the bank's mortgage repayment ratio (the maximum mortgage ratio has been adjusted to 70% since 2024)
• Review existing assets, such as down payment funds, investments, family support, etc.

2️⃣ Check Personal Credit Rating (TransUnion)

• Before applying for a mortgage, it is recommended to check your credit rating with TransUnion
• Credit rating affects the terms of mortgage approval by banks, such as interest rates, loan ratios, etc.

3️⃣ Calculate Total Property Purchase Costs and Additional Fees

• In addition to the property price and down payment, additional expenses must be calculated, such as:
• Stamp Duty (difference between first-time buyers and second property)
• Legal Fees (approximately $7,000 - $30,000)
• Mortgage Insurance Fee
• Brokerage Commission (generally 1% of the property price)
• Fire Insurance (required by mortgage banks, but may be exempt if the estate management fee already includes fire insurance)
• Renovation and Moving Costs

🔵 Phase 2: Finding and Selecting a Property

4️⃣ Property Search: Choosing Between New Developments or Secondary Market Properties

• New Developments: Purchase directly from the developer
• Secondary Market Properties: Purchase through real estate agents or private transactions
• Considerations: Location, age of the property, management fees, transportation facilities, school districts, investment potential, etc.

5️⃣ Conducting Property Valuation and Market Comparison

• Valuation can be done through banks or surveying firms to ensure the property price aligns with market value, facilitating mortgage approval
• Compare transaction prices in the same area to avoid overpaying

🟠 Stage 3: Signing the Sales and Purchase Agreement

6️⃣ Sign the "Provisional Agreement for Sale & Purchase"

• Pay a 3%-5% "initial deposit" before signing the contract. Breaching the contract at this stage may result in the loss of the deposit.
• Ensure that the contract terms are clear, such as the handover period, unit fittings, special clauses, etc.

7️⃣ Find a lawyer to handle the "Formal Sales and Purchase Agreement" and legal procedures

• Usually, the formal Sales and Purchase Agreement (Agreement for Sale & Purchase) is signed within 14 days of signing the provisional agreement.
• Pay the "major deposit" (10% of the property price minus the initial deposit). Breaching the contract at this stage may result in higher compensation.

🟡 Stage 4: Mortgage Application and Tax Payment

8️⃣ Mortgage Application and Bank Approval (Loan Application)

• You can apply for mortgages from multiple banks simultaneously to compare different interest rates, loan amounts, and terms
• Purchase mortgage insurance (Mortgage Insurance Programme, MIP) as needed
• Provide proof of income (pay slips, tax returns, MPF contribution records, etc.)

9️⃣ Payment of Stamp Duty

• Pay stamp duty at different rates based on the property price

🟣 Stage 5: Transaction Completion and Handover

🔟 Complete the transaction and make the final payment

• After the mortgage approval is completed, the lawyer will arrange to complete the transaction and pay the balance (usually through bank transfer)
• After the transaction is completed, the real estate agent will notify the handover date

1️⃣1️⃣ Inspection and Handover

• Inspect whether the unit complies with the contract terms, and report any issues immediately
• It is recommended to hire a building inspector to check for structural, electrical, water leakage, and other issues

1️⃣2️⃣ Transfer of Ownership and Management Fees

• Sign the Assignment deed to officially become the owner
• Register with water, electricity, gas, and management companies, and start paying related fees

🔴 Stage 6: Moving In and Follow-Up Arrangements

1️⃣3️⃣ Arrange Renovation and Interior Design

• If renovation is needed, hire a renovation company or designer for the transformation
• Ensure the construction complies with building regulations to avoid illegal renovations

1️⃣4️⃣ Arrange Moving and New Home Registration

• Contact a moving company to arrange the move
• Notify government departments (Inland Revenue Department, Transport Department) to update your address

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