“Being in the pool of first time buyers is one of life’s experiences which you’re unlikely to forget quickly. It’s an important and long-term decision that will affect your future. Whatever the reason for purchase, you should be aware of what is in store for you before making any commitment.” – Steven Borg, Head of Sales
In a nutshell:
- Commitment needed.
- Find the best bank for the best home loan to your budget.
- Find the right agent, find the right property.
- Find the right Notary to seal the deal.
- 5% Stamp Duty.
- Move into your new home.
As first time buyers, in many cases, you’ll be entering into a long financial commitment which may affect your future lifestyle choices, together with any long term career plans, so it’s imperative that you first understand this and are prepared for what lies ahead. Ensuring your mid to long term career, allows you to make this important decision with more confidence. If you’re partnering up to purchase a property, it’s also important to ensure that both of you are on the same commitment page and that any worst case scenarios are discussed in the case of default or life changing events.
WHAT CAN YOU AFFORD
Mortgages are a common facility that most first time buyers need. There are a few leading banks who offer varying interest rates and fees. Enquiring with a few leading banks to see which offers the best deal should be one of your first steps. As you would with any major purchase, it’s imperative that you determine what your realistic budget is before you begin looking for your property. It would be disheartening to fall in love with a property only to find out down the road , that it is way outside your achievable budget. It will become a disappointing search and possibly set an imaginary standard that will potentially derail your expectations and ultimately make your search an unpleasant and frustrating one .
Searching for the Ideal Property does not have to be a stressful or tedious venture and professional assistance from a trusted estate agent will be key. It’s important to utilise the services of an agent you feel comfortable with and trust. There are many properties available , and your agent should explain the differences between what’s on the market. Location, apartment versus house, it’s size, current condition and ‘added value’ are essential components to be discussed and evaluated. Once properly informed, deciding on your ideal property should come naturally.
‘Hard sell’ sales techniques should be avoided at all costs, as this may lead you down a slippery slope of decision making which could be regrettable and not easily reversible without loss of investment. Developing a trusting relationship with your agent is in your best interests, as this will be more financially beneficial and give you peace of mind that your agent is not working solely for their own short-term financial gain.
Establishing and shortlisting property preferences is a task that is best tackled with an organisation that will allow you (and your partner) to discuss and assess each potential choice, ultimately helping you make informed decisions and comparisons that could also serve for future negotiation when the time comes to conclude.
Your estate agent (intermediary) is the ideal person to place an offer. Usually the agent will have the knowledge of what an owner will or will not accept, and if negotiation is impossible, your agent will be trained to obtain such information that will guide you to the best possible terms. Owner/sellers generally vary in the way they like to be approached. Some prefer face to face interaction with the purchaser, whilst others prefer discussions to be conducted through the agent. This is the most crucial part of securing the best possible deal. Reputable agencies have trained agents who are always backed by management with years of experience in the field, thus will be instrumental in finding a ‘win win’ outcome for both parties.
SECURING THE DEAL
Once you have decided and agreed on the price and terms and conditions, the services of a Notary Public is called upon to draw up a promise of sale agreement (POSA). The Notary is entrusted with ordering and vetting searches to ensure that you are obtaining the property with a clean title and free of any debt and encumbrances. The notary is often appointed by and paid for by the purchaser. Fees in relation to these services can be determined prior to the drawing up of the POSA. (Link to: Notary Bill Calculator).
The Notary will also assume the task of liaising with banks and providing the relative legal safeguards for the involved parties, whether there are any current loans on the property being purchased, as well as any bank loan required to purchase the property. It’s important that all parties are clear on the terms and conditions set out in the POSA, as this is legally binding on both parties. It is also imperative to raise any points that you may not be sure of with your agent and/or notary wherever necessary. Currently, the Government of Malta has extended the law which covers first time buyers NOT to pay any Stamp Duty on the first €175,000. If the property costs more than €175,000, then 5% on the balance would be payable as stamp duty on contract.
Architects should be appointed by the purchaser to confirm that the property has been constructed in line with building regulations and Planning Authority permits have been approved. Architects are also required to fill in Land Registry Site Plans (where applicable) and complete the necessary ‘Schedule 8’ form. It’s important to note that notaries will not be held responsible for any building irregularities and you should ensure that all is in order prior to signing the final contract.
Fun Fact: 100% of first time buyers have a median age of 32 when it comes to purchasing a Home.
Should you require more information on any of the above, Belair Property agents are available to provide professional advice.