How many buyers have felt remorse and have not been able to sleep peacefully
after making a purchase? Many first-time house buyers, partly due to
enthusiasm, partly due to ignorance, have made costly mistakes during the house
buying process. Take Mani for example, after signing his Sale & Purchase
Agreement, he has been having sleepless nights and every weekend he has been to
the site of his new purchase to see if there is any progress on the building.
However, sadly for him, the project is stalled and he is at a loss of what to
To help you keep your sanity and your cash, become an educated
consumer and avoid the mistakes that others have made before you. To not
yourself and learn from the mistakes of others only sets you up to be
at best disappointed and at worst finding yourself living in the wrong house.
We have listed some of the most prevalent mistakes made by first time house
Mistake #1 Not planning ahead
Once a decision has been made to purchase a home, often buyers start
rushing off looking for houses and strata units at exhibitions, surfing
the internet, calling on advertisements and visiting show houses before
doing some up-front preparation. We at HBA has been receiving many
emails from buyers wondering if they can get a refund on the initial
deposits for one reason or another but mainly because they have rushed
into paying a deposit before they are ready.
We have to state this loud and clear - once you paid a deposit
to purchase a house and "change your mind," the chances of getting a
refund are almost non-existent. More damage financially, if one has
signed the sale & purchase agreement. The penalty clause is 1% of
the purchase price if the buyer is unable to get a loan. If it takes 1%
of the purchase price to test whether one is eligible for loan, it
makes sense to do research before hand.
Also, think about how long you plan to own the house. Would it
be difficult to resell? List the negatives. Could you eliminate or
Mistake #2 Not understanding the different types of purchase
Very few house buyers do bother about the legal side of the housing
process and prefers to leave it to their lawyer or lawyers from their
Vendor's panel to assist them in the process. Many house buyers are
surprised to find out that their purchase is not protected under the
laws. House buyers should be reading up on the different types of
properties and whether or not these purchasers are covered under the
Housing Development (Control & Licensing) Act 1966 (revised 2002)
Mistake #3 Fail to understand the home buying process
First-time homebuyers need to ask questions. Lots of questions. So, who
do they go to, to ask these questions? So choose a real estate agent or
a lawyer who has experience working with the uninitiated and is willing
to explain the entire house buying process in detail, and explain it
again until you understand it.
Mistake #4 Finding out too late that you have no representation.
This can be a real nasty surprise when the buyer assumes that the
lawyer recommended by the vendor or a developer represents him when
they actually represent the vendor and owes complete allegiance to the
vendor. Until such time that the law makes it illegal for vendors to
advertise 'free legal fees', buyers learn the hard way that 'free'
means no representation. Some buyers argue that since such sale &
purchase agreements are standard documents, a couple of thousand
ringgits saved is worth it. Here, we would like to point out that
although the documents are standard, they are forms and every unit,
project & concept is different. For strata properties, there are
documents like 'Deed of Mutual Covenant' & purchase of car-park
bays, are not standardised.
Mistake #5 Not reading what they have signed
This is true of a majority of first-time buyers. Most do not read their
agreements and have no inkling of what they have signed. Many put their
complete trust in their lawyers and think that blindly that all the
lawyers will be looking out for their interest whether or not they are
Mistake #6 Not prepared in case of delays
Delays in handover of vacant possession are so common, that buyers are
wise to make provisions for them. If you are renting a house, make sure
your landlord is flexible with the extension otherwise moving to
another accommodation for an indefinite time will certainly cost you
Mistake #7 Buying into an unknown location.
Don't stop your inspection at the property line. Examine the
surrounding area. Is it safe, well maintained and moderately quiet? Is
it convenient to work, schools and shops? Ask about zoning and that
lovely forest of vacant land across the street. Could the highway
nearby be widened in a couple of years? Within ear shot? If you're not
familiar with the area, ask friends and colleagues about it.
Mistake #8 Buyers' Remorse
No one likes to admit
they bought the wrong house. But, it happens. Some have had their
deposits forfeited for last minute changes of mind. This is an
expensive way to learn what they needed in a home. To ensure that this
doesn't happen to you, do your homework well before you part with your
Learn from the mistakes of others. It's the best way to ensure a first-time homebuyer a good night's sleep.