Looking to buy your first home? The following steps will be a good guide on what you need to do:

Step 1: Determine Your Budget and Location

When deciding on the location, you may want to consider distance to work place or schools and other amenities in the area. Select a residential area that is ideal for your lifestyle and family needs.

Then, set your budget. For your first property, banks will usually provide up to 90% of property price as loan. Your monthly instalments should not be more than 1/3 of your income to allow for other living expenses. Your budget should also include payment for stamp duty or memorandum of transfer and other legal fees which could be as high as 5% of the property price.

Step 2: Research and Look for Your Property

It is easy to customise your property search on listing website.  You can find properties based on type, location, price range, number of bedrooms, floor size and tenure. There is also keyword search to refine your search results. Using this feature, you can get a sense of the property market price which is key to a successful negotiation.

If you are purchasing a new house, do your research on the property developer by going to the company website. Previous news articles found on the web would also be a good indication of the reliability and reputation of the property developer.

Step 3: View the Property

Select the property that interests you and call the agent to set up for a viewing. Ask the agent about property status (freehold/leasehold), age of the building, maintenance fees, facilities, land size or any other relevant information. Then, inspect the unit for any defects such as cracks or leakage which could cost you more money to repair.

If possible, revisit the property without the agent to speak to the neighbours. Get a feel of the neighbourhood in terms of security, upcoming developments and amenities. It is also advisable to visit many houses before settling for one.

Step 4: Get a Bank Loan and Make Your Offer

With a price in mind, check with a few banks on how much loan you can get – ideally up to 90% of the purchase price. Consider the interest rates offered by each bank, monthly instalments and other benefits which could be included in the loan package. Choose the best option for your needs.

The banks would usually arrange preliminary valuations for you. Based on this information, you can offer the seller a price and negotiate from there. An offer is not necessary for properties bought directly from the developer.

Step 5: The Legal Procedures

After agreeing on the sale price, you will need to sign the Letter of Offer and pay a 2% deposit. Then, get your lawyer to draft the sale and purchase agreement (SPA) and loan agreement as well as take care of all the related legal procedures. An 8% down payment is required upon signing of the agreements and other relevant legal documents.

At this point, you should also decide on the bank of your choice for the housing loan. The bank will arrange a physical valuation before giving you a loan offer letter to sign, detailing the terms and conditions of the loan.

Step 6: Payment of Balance of Purchase Price

All payments including balance of purchase price or any other relevant fees and charges can be paid by loan or cash and must be done either by the buyer or seller within the date stipulated in the SPA. This process is usually handled by the lawyers of both parties. Once the title has been put in your name, get a copy from your lawyer.

When all the above procedures have been completed, the house and keys will be handed over to you. And you will be the proud owner of your first home.

 The article was contributed by Agnes, freelance writer, PropertyGuru.