Cost Savings Tips When Buying Your First Home

 

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Today I would like to share my personal experience on how to save money when it comes to dealing with banker/lawyer/broker/seller. Apparently some fees can be negotiated. So when to use your negotiation skills?

 

1.  When obtaining loan from bank

Try to get the best deals in town. You should obtain loan offers from a few banks for comparison purposes. All banks offer different rates and packages. Additionally you can actually negotiate for a lower interest rate from the bank’s loan representative. All loan representatives have quotas to meet every month. Perhaps he/she can offer you a better deal if he/she wants to close target or achieve higher quota that month. Negotiate for a win-win with them. That’s how I got my interest rate lower than usual as I have a friend from HSBC.

 

2.  When paying your lawyer fees

My cousin who is a lawyer advised me to negotiate lawyer fees with my lawyer which some purchasers are not aware of. Usually lawyer’s office will present you an itemized bill. The discount was on non-standard items like admin, photocopying, documentation or transportation charges. I was able to save almost a thousand ringgit from this. However after year 2006, there is a new ruling ie. Solicitors Remuneration Order 2006. Apparently no discount is allowed after this under the act. Anyway you can always check out with your lawyer to see if you still can get some savings.

 

3.  When dealing with broker fees (if you are the seller)

If your house is sold below your desired agreed selling price, you can negotiate with your broker for a lower broker fees. Most brokers can accept this as it is also part of their fault for not being able to sell at good price for you. But you need to highlight this matter with your broker beforehand.

 

4.  When getting compensation from developer for late delivery

Let’s say you purchased your house directly from developer and the developer has delayed handing over the house to you on time, you will be compensated with liquidated and ascertained damages (LAD).

“ If the developer fails to deliver vacant possession on the completion date as stipulated in SPA, purchasers shall receive compensations at 10% per annum of purchase price from the completion date to the date of notice from the developer requesting the purchasers to take possessions. “

Most developers will not compensate a full amount of LAD to purchasers, but instead a discounted amount. It is up to the purchasers to accept or negotiate for more.

In my case, my house was delayed for about 6 months in 2006. The developer offered me a discounted amount of compensation, not the full amount as should be based on 10% p.a. calculation. The reason being was the developer was unable to compensate in full for all few hundred purchasers in the township.

Lucky enough, I walk around the neighborhood and got to know that one of my neighbor got a much higher compensation. It seems like not everyone was offered the same amount! I quickly called up the person in charge and insist on the reasonable amount I wanted. My 2nd offer letter arrived few days later with extra two thousand ringgit. Voila.

Alternatively, you can always team up with your community. A bigger crowd has bigger demand power.

 

How about the rest of our readers here? Do you encounter any stories which you want to tell? Let’s share and get smarter together.

 

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5 Responses to Cost Savings Tips When Buying Your First Home

  1. I have booked a unit of Plaza Melati Condo. But after more than one year, the SPA has still not been signed. Do you have any news of the project?

    • Hi Tony, I have not heard of Plaza Melati Condo after some time. Well if SPA is not signed after a year, that’s pretty long. Perhaps you can check directly with developer / appointed marketing agent. Thanks!

  2. Thank you.

  3. Thanks for your insightful sharing on how to save money on buying 1st home. I would like to share my experience too. You can get Bank A (better rate) offer letter to negotiate with another Bank B(your favourable bank). This will provide higher change to ask Bank B to match with Bank A. Alternatively, you can ask Loan agent(bank will pay them) to help you to search for the best rate.

    Lawyer still give about 30% discount but it will not shown in your bill which is illegal.

  4. Hi all,
    just to share,
    As far as I am concern, most of the project sales meaning by the developer, the respective banks tie up with the developer with all the same rates, it just differ in the packages in term of MRTA and etc.

    and as for Subsales, meaning the secondary market, yes you can apply for few banks and compare the offer but again it depends on the property value and the client’s profile as in the year of 2015 bank negara Malaysia had imposed a very strict guideline in approving the mortgage loan.

    Cheers!

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