Beware of Hidden Costs!

So you think buying a house is no big deal?

When you have agreed to buy a house from a seller, there are hidden costs to consider.

Ask any lawyer and he will tell you that apart from the house price, there is the transfer fee that has to be paid to the government. If the house is below RM500,000, then the government takes 1% of the house value. If it is above RM500,000, you will be slapped with a 2% rate. This easily translate to about RM10,000 for a RM500,000 house.

What about the lawyer's fees?

If the house is RM150,000 and below, you need to pay the lawyer 1% and if it is more than that, you will have to fork out 0.75% of the house value. Get ready to spend about RM4,000 on lawyer fees for a half million ringgit house.

Taking a loan from a bank will add more to your hidden costs. These include:

Processing fee of RM200 or so.

Valuation fee of up to 2 % if your house is RM500,000 and beyond.

The lawyers fee for the loan will be subsidised by the bank up to 75%. You foot the balance.

Remember you also need to buy MRTA insurance to ensure when you are dead and gone, the loan gets paid via insurance.

Lastly, you may want to do up the house-renovation is certainly a big deal as well.

You must ensure the electricity and piping is in ship-shape. Then you may have to repaint the house, polish the terrazo and marble floorings, re-sand the parquet or replaced it with wood flooring and maybe put in fans and airconds.

Then you may want to invest in building up the party walls between your neighbours as well as put up a electronic gate.

So, its spending galore, my friend when you want to buy a house.

Think twice my friend when buying a house.

It is a big deal!