If you are planning to buy a property, there are a number of things you need to know before you begin the process. What type of property should you go for? Should you sell your home before buying a new one? Are you even eligible to buy a new home? Buying a property is no small matter, so you should ask yourself these questions and more before you buy or sell one.
1. Am I Eligible To Buy?
First of all, you need to find out if you are eligible to purchase your first or subsequent properties. For example, if you live in a HDB flat or an executive condominium (EC), you are not permitted to purchase another property until you have fulfilled the 5-year Minimum Occupancy Period (MOP). This means that you have to stay in your current home for 5 years before you can buy your next property.
2. What Type of Property Should I Buy?
Ask yourself if you would like to have an affordable roof over your head. If that’s your priority, HDB flats may be your answer. For some others, they may want to capitalize on their property to make some profit gains or, to have facilities in the development for them to enjoy, if that’s the case then a private residential property is more suitable for you.
3. What Factors Should I Look Out For?
A property’s location and surroundings are no doubt important considerations. Find out what the neighbourhood is like, if there is convenient access to public transportation, how the traffic is during rush hour, and if there are malls and other amenities nearby. It goes without saying that the property’s overall condition is the most crucial factor. You would not want to live in a rundown home even if the location is perfect for you.
4. Should I Sell My Home First Before Buying A New One?
Long story short, it takes time to find an ideal home and you would not want to be caught with no place to stay in while you look for a new home. Do make sure that you have an alternative place to stay if you do decide to sell first. Some couples we know may also decide to buy first because they have the extra funds to pay for the extra additional buyer stamp duty (ABSD). Do note that these extra taxes can be refunded if the first property is sold within 6 months from buying the second one, but it only applies for matrimonial homes.
5. What Happens If There Is A Delay to A Property Under Development?
Buying a property that is under development may net you a discounted price, but due to its uncertain nature, there is the risk of it getting delayed for various reasons. Having to wait months or even a year could feel like a long wait, especially if you are renting while waiting as this would mean you would be losing money. Therefore, you should do your research and find out who the developer is and their performance rating. In some cases though, developers may offer freebies (such as furnishings vouchers) if they are not able to meet the expected deadline.
6. What Is the Property’s Current Market Position?
Diving into the more uncommon questions, this is one you should learn more about. You can figure out the property’s market history by asking questions such as how long the property has been on the market, when the property was last listed, the reason the seller is letting the property go, and if there had been any previous offers for it. It is highly likely for properties that have not received any offers to have serious issues.
7. What Were the Prices of the Properties in the Area Over the Last Few Years?
This is a question that homebuyers (especially first timers) tend to overlook due to lack of research. Don’t just look up the lowest price on a comparison website, but take a look at the historical transactions for surrounding properties over the last few years. You will want to see if values are rising or falling across the neighbourhood. A currently well-priced property might not appreciate as well as the other alternatives on your list in the long run, so it is not enough to just see that the property’s price range is “about right” by comparison.
8. Are There Any Developmental Plans for the Area?
It would be wise to find out if there are any plans for future development in the vicinity of the property. A new shopping mall or a new train line would positively affect property prices in the area, but at the same time, the noise and inconvenience that comes with the construction could be a turn off.
Purchasing a property is not to be taken lightly. Keep these questions in mind when you are looking to buy one in the future. Don’t hesitate to contact us should you have any further questions! We would be happy to assist you in any way we can.