Homebuyers dreams of buying a home. For most of us, it is the penultimate goal in adulthood, sitting closely behind kickstarting your own family. That said, buying a home is never a straightforward process, as there are a lot of hurdles that one must overcome before doing so.
Unfortunately, before we can get there, we are stopped dead in our tracks. One of the two biggest obstacles that stand between us and homebuying is financial (il)literacy. In fact,70% of Malaysians were found to be financially illiterate, which means it’ll be a long way to go before any of homebuyers will get there. Financially literacy, loosely defined as the ability to manage one’s money, is important because it is quintessentially the gateway to affording a home in life, among many other luxuries.
The late singer Prince once said this, “Money can’t buy you happiness, but it’ll pay for the search.” A sentiment many adults can relate to, we’re sure. It doesn’t help that we are living in a world that preaches “inner contentment” over materialistic possession & societal approval either. No, we’re not saying that you should work yourself senseless to afford a home, but it would be foolish to deny the pivotal role that financial literacy and money play in our lives.
The other major obstacle that stands in our way is the lack of homebuying basics. Yes, property literacy amongst Malaysians is surprisingly low and sad. Property literacy and financial literacy often go hand in hand too, so it’s safe to say that there are a large number of Malaysians out there who might be less informed when it comes to homebuyers. However, the demand for housing on residential property are still present.
Even without any statistics or numbers to add to the topic, the number of homebuying guides targeted at potential homebuyers on the internet should speak for itself. Ministry of Housing and Local Government, housing developer, Estate Agents and Property Managers, housing counselor are some of the involved parties that could be part of the entire process. To put it simply, many of us can’t manage our finances well, neither can we achieve our homebuying dreams with ease.
We’re sure you’ve read your fair share of homebuyers guides already. So instead of boring you with things you already know, we thought we would focus on the lesser-known things, like the psychology of buying! Let’s get to it.
Tip 1: Do your due diligence
You might be thinking… Duh! But let’s see you’re on the same page with us. When talking about buying a home(s), our mind tends to wander off to the big picture – Money and Mortgages. True, these two play a determining factor in how, what, and where your new home will end up looking. But we’re talking about getting to know the area surrounding your home, the people, the roads to name a few.
For starters as a homebuyers, spend time visiting the place that your future home is located. Observe the traffic, make multiple rounds and note the difference between morning, afternoon and night. Is the area massively congested in the morning? How does it compare to some of the densely populated areas in Klang Valley? How long would it take for you to get to work with the state of traffic you’re in? What about nighttime, is it dead quiet at night? Is it considered a safe area?
If the place is a rather serene neighborhood with some lush green trees, make time to run through the neighborhood. Breath in the air, hark at the community. Some may prefer a more expatriate-friendly community, others find themselves at home with a suburbia-like setting.
Next, check out the entertainment hubs within the vicinity. How close is the nearest mall to your home? Do you have access to a wet market to procure your fresh groceries? Or will it be store-bought groceries every weekend? Does the place boast a great selection of eatery? Or will the lack thereof be fine with you. Think from homebuyers perspective.
Oftentimes, we harp on the price tag and the years it’ll take for us to pay off the mortgage that we forget about the rest. By the time you have already made the down payment and committed yourself to a lifelong tenure, you may be having second thoughts about the purchase. You don’t want that. Our advice, put aside the price tag for a bit and be one with the place.
Think about it… Would you rather live in a moderate-cost home with a serene neighborhood, or a bourgeois one but with a less-than-ideal environment? Some may prefer the former, others the latter. But if you can’t imagine yourself living happily in either one, then it might be time to look elsewhere. Knowing your environment, both in and outside of your home is important, period.
Tip 2: Recognize your motive for getting a home
Everyone wants to buy a home, but the bigger question is – Why do you want to buy a home? People buy homes for a myriad of reasons, and there is no right and wrong answer to the question. However, purchasing a home for the wrong reasons with the wrong expectations never bodes well for anyone.
Are you purchasing a home because that notion has been drilled into you from young? Are you peer pressured into buying one because everyone else seems to be doing it, yet you aren’t? Or are you doing it because you genuinely want to own a home and desire a private space for yourself? Maybe you would like to turn your home into anAirBnB and capitalize on the tourism industry, have a side income? Some people buy a home because they wish to buildequity instead, which is a long-term investment and a sound enough reason on its own.
Say you’re looking to profit off your purchased property, either by turning it into an AirBnB or simply building equity. That opens up a different list of responsibilities that you need to take note of. For instance, turning your unit into an AirBnb would involve doing a deep dive into Malaysia’s property law. This questions of law is tricky.
Did you know that AirBnB is consideredillegal if certain conditions aren’t fulfilled?
How can you achieve that objective whilst adhering to the law?
How can you successfully register your place on the site and grasp the T&Cs that come along with commercializing your place?
What happens if your AirBnB gets thrashed by a group of unruly staycationers, andthey’ve stolen some valuable possessions like a PS4?
Are you ready to face the possibility that you can never recoup some of your losses?
These are all fundamentals that require looking into before you set out to turn your place into a mini-suite.
Likewise, the same could be said forbuilding equity, which involves maintaining your home value and ensuring it stays stable for many years to come. Building equity itself yields its unique set of concerns.
Where should you buy a property in Klang Valley?
Your home equity could potentially rise or dip depending on its location several years later based on the property market’s assessment of it.
Then there are also indirect factors that play a key in keeping the equity afloat, such as upkeeping, maintenance work. Having to fork out money every half-yearly to keep your place up and running smoothly is a chore on its own, and demands a good chunk of your salary. If you have about 2-4 unit property with monthly payments to get access to mortgage loan financing, this is even complicated. Are you prepared to put up with that dread?
Sensibility is a must when purchasing a home, as is tampering your expectations. The sooner you can properly identify your reason(s) for getting one, the quicker you can mentally prepare yourself for the future challenges that may present itself.
Tip 3: Adopt a practical mindset
Emotions are a huge part of consumer psychology. We’re sure you’ve been to a property showroom before. It’s always lovely to look at them and fantasize about your future living space. But it is also worthwhile noting that many people tend to fall prey to the ideals of homebuying and lose themselves in the moment, including ourselves. The property market is highly competitive, and developers employ a repertoire of marketing tactics to capture buyers’ attention.
Some would even offer exceptional customer service. These days, most property agents are willing to go the extra mile to make you feel at ease and comfortable in a showroom. That being said, some people still place great importance on customer service, and sometimes, it may be the deciding factor in whether one chooses to purchase a property.
There’s not a lot to add to this. Going the extra mile for your customers will likely yield some form of rewards, and property buying is a form of salesmanship. If the service is exceptional, people are more than happy to patronize and seal the deal.
Remember though, you shouldn’t buy a property just because the property agent was exceptionally cordial to you, or that they went the extra mile. At the end of the day, your personal preference as homebuyers and owner needs to have a say too.
Tip 4: Spend within your budget
Let’s say your parents do not have the financial power to support you, which means you’ll now have to fork out every single penny from your pocket if you want your own place. You want to get housing accommodation with common facilities but does your homebuyer fund enough?
As a homebuyers or first-time homeowners, budgeting is important. By spending within your budget, we don’t mean going for a house that costs RM1,000,000 when your paycheck only amounts to RM3,000 a month. We’re talking about actually keeping strictly to your allocated budget and spending on what you came for. Say your dream house fetches a price of RM350,000 at 750 sqft now, but the property agent recommends going for a larger unit that is priced at RM400,000 with a 950 sqft unit. In their words, an additional RM50,000 goes a long way.
On paper, it might sound like a catch to spend extra. For an additional RM50,000, you get a place that is 200 sqft wider. But take a second and think if it is necessary to spend that amount at all. Do you have what it takes to tank the additional cost? The additional cost may set your tenure by an additional 5 to 10 years. Would you want that?
If you have the financial power to do so, spending extra is totally fine. But if you’re not at a financially sufficient spot to tank the additional cost, or “upgrade” to a better unit, perhaps it would be better to work out your spending power before you make that leap of faith. Try attending afinancial literacy class and determine if you can afford all that.
Instead of spending an additional amount hastily, perhaps it would be more helpful to maintain discipline and keep to your budget.
Tip 5: Take your time
Buying a home should not be a race but society makes it sound like one. Many of us set a timeline for ourselves and frantically scramble to buy one in fear that we can never pay off our mortgages if we are past that timeline.
Some people even think about themselves where they put themselves as loan applicants that build decent development record that can help with their success of getting their loan approved since they started working. However, most times, this leads to long years of regret and a point of no return.
If you’re at an age where everyone around you seems to be buying a home yet you aren’t, there’s no need to feel discouraged. Everyone reaches their goal in their own time and that’s okay. Sure, most mortgages might reject you if you exceed the maximum age by the time you’re nearing the end of your mortgage, but there are numerous options out there that allow you to extend or pay your mortgages flexibly i.e.: joint loans, and a second-generation loan. Some schemes out there even offer a10% discount and stamp duty waiver if you catch them at the right period.
It’s perfectly fine to never buy a home and resort to lifelong rentals if you’re not ready to afford a home, though lifelong rentals will pose its own set of problems. And, if you have the privilege of having parents who are supportive and non-toxic, perhaps it might not be such a bad idea to reconsider your plans of moving out.
After all, buying a home is a huge thing.
Tip 6: Learn to embrace the learning process
Hooray! You’ve finally purchased your home. In spite of all the hardships and long fought battles to afford one, you’ve made it to the finishing line. Now, a new challenge awaits you – Seeing through your mortgages and building the home of your dreams.
People are oddly negative about buying homes because they fixate on the costs incurred and how much they frequently set you back by X amount. We’re here to advocate against that. If you have made the big decision to purchase your home, learn to enjoy the process instead.
The money has been spent anyway, and the construction is underway. Regret is pointless as homebuyers. Instead of beating yourself up over your “poorly made” decisions, find joy in watching things come to life. Sometimes, you may even find yourself learning a thing or two about being homebuyers in the process.
Watching an empty space grow into a place that you can finally call home can be therapeutic and exciting. It’s a bit like raising a child. At times, it’ll be demanding and stressful. Some days, you may question your decision. But there will also be days where you will marvel at your place and realize it has budded into an everlasting home. If you can hang tight, the experience as homebuyers will always be rewarding.
There is certainly no need for you to impose a timeline on yourself when it comes to buying a home. Making such a big decision often requires careful consideration and deliberation. When you are ready to purchase a home, the journey of watching your home come together will be a rewarding as homebuyers. Buying a home is more than just money and a mortgage. Mental preparedness as a homebuyers plays a role in the matter. Instead of rushing the process and potentially subjecting oneself to long years of regret, one should reflect on their choices and determine if one is psychologically ready to afford one. Pre-purchase homebuyer education is also important to prepare for your future financial planning.
The information on this website is subject to change at any time without prior notice from Properly. Quantitative metrics are taken and used based on recency at the time of writing. While the Properly team takes information accuracy seriously, we are not liable for any losses due to incorrect information. The information provided is solely to inform users and is not in any way a form of offer or contract unless stated otherwise.