SELLING / BUYING GUIDE
SELLING YOUR HOMES ? - PLEASE CONTACT US WITH FULL DETAILS
Our clients are local / many expatriates & foreigners who are working or retiring in Malaysia
Sell Now or Later?
Ideally you want to sell high and buy low, but unless you are an investor, this is not always practical. However it does help to be aware of the economy because changes within local and national markets can affect property prices and the cost of living in general. For example, when the economy is doing well and interest rates are low, demand for property is generally high and this in turn pushes prices up. By the same token, when inflation is low, investors may be more attracted to the stock market that could also lower the demand in the property market. Industry successes and failures can also have a knock-on effect - the closure of a factory could mean the loss of jobs and hence a dive in house prices in a particular region.
Traditionally, beginning of the year is supposed to be the best time to sell and end year is generally ok, but many other factors come into it. For example if you live in an area which attracts potential investors, the best time of year to put your house on the market may not be a concern anymore. Conversely, if in winter fewer houses are on the market in a location that is in demand, the prices may be higher than in another season when a larger number of houses are up for sale. This is where a good real estate agent who is familiar with your locality can be invaluable.
As the sale of your property is likely to be the biggest transaction you may ever make, don't sell in haste! If you feel under pressure to make a sale on your property, it is far more likely you will accept a price lower than the true value of your home. Do your homework and find out what similar houses in your area have sold for in recent months (this information is now easily obtainable through Propertyguide's sale history feature). Look at the economy to see whether the market is slowing down or speeding up. It can be tempting to rush the sale of your property because you have found the house of your dreams, but selling on a whim or without knowing what's involved could lose you thousands in your asking price or even give you headaches with your newly purchased property if you have not taken the time to check everything out.
Buying versus Renting?
What are the advantages of buying versus renting? Consider the pros and cons of each and whether your motivation to buy matches the lifestyle you have or want to have.
There seems to be an inherent desire in most of us to eventually 'nest' and make our home somewhere. This usually means that buying a home is more desirable than renting and brings a sense of satisfaction and security that cannot be matched. Unfortunately, the rapid increase of values in the property market in recent years has pushed home ownership out of reach for some would-be first time buyers. However affordability does not necessarily equate with having a high income. Home ownership is a long-term goal, and requires planning, tight budgeting and saving strategies. Not everyone is willing to make the types of sacrifices this can sometimes require so it helps to consider some of the pros and cons of buying in order to examine your own priorities.
Security: Owning your own home brings a sense of satisfaction, security and stability. There are no lease conditions to worry about and you are no longer subject to the whims of a landlord who has control over the length of your tenancy and the cost of rent.
Investment: As long as your home is appreciating or maintaining value, you are growing equity (ownership) in your home. This equity can be later used to secure further loans and will also provide security in retirement.
Savings strategy: In a sense, making repayments is like a type of forced savings strategy. The more you pay off, the more of your home you will own. Furthermore, once you have paid off your mortgage, you will free up a large portion of your income which will lighten your financial responsibilities.
Lifestyle: Choosing the style and type of home for your lifestyle (or changing it to fit) is a huge incentive for many people to become home owners. In rented premises, time, money and effort spent on decoration and gardening will not return to you beyond the length of your lease and in most cases, the landlord will be very particular about any modifications you make in the first place. Owning your own home not only provides the freedom to change and improve your house as you like, but the process can become a productive hobby which may increase the value of your property at the same time.
Tax incentives: If you purchase a property for investment purposes, the interest on your mortgage payments is tax deductible. Likewise, an investor who lets their property to tenants can take advantage of the tax benefits of negative gearing.
Status: The status of being a home owner is not only satisfying inwardly, but it provides other benefits from a financial viewpoint. As you make regular mortgage payments, you will establish a favourable credit rating with financial institutions which may be useful for future borrowing.
Struggle to save deposit: Depending on the market you are hoping to buy in, getting a deposit together can take several years of saving every spare cent of your income and changing your view of 'essential' spending quite severely. It can mean a lot more than taking cheap holidays, cutting out take-aways or limiting going to the restaurant. Buying in bulk, taking lunch to work, getting rid of credit cards and forgoing expensive outings might be just the beginning, not to mention switching to public transport if you have a second car or giving up expensive habits.
High Costs: Home-ownership can be more expensive than renting because you are responsible for the maintenance and repairs of the property, insurance, paying council rates, plus any improvements you want to make. If you have a large mortgage you may find more than half of your income going into repayments - a huge financial commitment.
Price Depreciation: There is a risk in any investment that its value will depreciate. If this happens to your property you stand to make a loss in the event you decide to sell.
Interest rates: If your mortgage is subject to a rise in interest rates, you may struggle to continue making your repayments if interest rates increase. While renters can also face rent increases, it is possible to negotiate this with your landlord - or otherwise move.
Location bound: Some people are not settlers. They like to move around regularly. Whether it be for career or lifestyle reasons, the thought of being bound to one place seems boring or threatening to their sense of freedom. Moving regularly is expensive in itself, but the transaction costs buying and selling every few years is likely to cancel out any appreciation of the property.