I Don’t Like Retirement Homes!

I just got back from the three day property fair BPEX which was pretty rocking! Can you find me in this picture here? ;)

If there’s one thing that preoccupies Malaysians nowadays, it’s the idea of retirement homes. No less than 20 people came up to my agency’s booth and asked me about retirement properties.

Indeed… everyone seems to be into buying a Malaysian retirement home these days. Naturally, who would not want to live comfortably in your senior age, to enjoy what you should actually be enjoying after toiling at work for most of your life? Of course everyone wants to buy a retirement home!

But as with any real estate purchase, it cannot be something you do on a whim. We’re no Betty White’s and Jack Nicholson’s. We’re talking about Malaysian homes like Kiara Designer Suites that we would buy with our hard earned retirement money, where most of your pension funds and old age will be spent on. Indeed, some of our most popular property sites (reviewed here) have dedicated sections on retirement homes. Also, we were also previously featured in this article in the Edge which quoted me as being bullish on retirement homes. I have now changed my mind…

Why retirement homes are crap!

retirement home
Boring.

Only naturally, we want something that will be worth the hardest earned of our hard earned cash. Here are some tips on how to buy the right retirement home for you:

  • Should you rent or buy a retirement home? Or would you be better off in your old home? Weigh in on the odds – which would be convenient and cost efficient? Buying a home may be very convenient but could you really afford it? And what happens to the house should you need to be in hospice care? Would renting be better? Or would you be better off repairing your old house and investing your retirement money in something else instead? These are the real questions that you’d have to face, rather boldly, when the time comes.
  • Decide early on to get a Malaysian retirement home. The sooner the better is the name of the game when buying a retirement home. This is a big investment and you’d like to save for it as much as you can so you still can enjoy a big chunk of your retirement money and not just lose it all to the house. You’re unlikely to get a big, long mortgage loan anyway. And besides, in your old age, you wouldn’t likely to want to think about having to pay for something so big so at least strive towards making a full to almost full payment. So the sooner you decide to get one, at least about two years, the more savings you’ll have for your dream retirement home.
  • Find the right location. Find your happy place – but make sure it is easily accessible to important public facilities. You sure don’t want to drive far for your doctor’s visits anymore! You have to find a home that will keep you happy but will also keep you safe and within comfortable driving distance to the grocers, the hospital, the police station, etc. Also find a place with a lower cost of living and in a neighborhood that’s friendlier to seniors. Maybe somewhere like Segamat, Johor, or Kota Damansara. :)
  • Choose just the right size. When you’re older, you’d likely be alone at home with your partner on most days. You certainly don’t need something the size of a Civil War era mansion. Remember, bigger houses need more cleaning and maintenance – and that’s something you’d rather not want to deal with in your senior years. Get a Malaysian house that has enough space for yourselves and maybe a regular sized guest room to accommodate visiting children.

Mr. B

Ask Ben: Buyers Agent 101

Hello reader: Ben here again. This morning I received this email from our reader Gan Teik Pang (gante@gmail.com) from Segambut, Malaysia:

Buying a Malaysian house can be one overwhelming experience. You see, I’ve been trying to get a unit at the popular Meritz in KLCC, and things have not been going smoothly. Apart from having to deal with all the hassles, pressures, confusion, not to mention costs of house hunting, there’s always the mortgage and other technical stuff to deal with too.

Any advice for me, Ben?

Here’s my answer:-

Hiring a buyer’s agent is almost always necessary, especially if you’re a buying a house for the first time or buying it in a new city/town. They know where the houses are, they know how to talk to seller’s agents, and their services are free – or at least, you don’t carry the burden of paying them.

But before you jump into the first buyer’s agent you find, Mr Gan, there are some important things you need to know about them.

Buyers Agent 101

Here’s a simple but accurate walk through about everything you need to know about real estate buyer’s agents:

home buying 101

  • You don’t have to pay them. The burden of payment or the commission lies in the hands of the seller’s agent (or the seller if the house is sold on a For-Sale-By-Owner or FSBO basis).
  • They almost always make you sign a contract before they start working for you. Ideally, the contract is nothing more than a mutual and signed agreement that you would stick to them until you find a Malaysian house. It also states what happens and what your responsibilities are should you ‘break up’ with them mid-contract. This is their way of making sure that they aren’t spending time, money and effort on something futile. Like any contract, read this thoroughly before inking; consult a real estate lawyer if the need arises.
  • Yes, you can break up with an agent. But not without consequences. That is why it is important and essential for you to take the time to make a mutually agreeable contract on exclusivity, clauses on breaking up and guarantees. The contract should be ‘bilateral’ in that it takes to the welfare of both the buyer and the buyer’s agent should the ‘relationship’ fail to work.
  • And yes, your agent can initiate a break up too. So you had better get yourself protected too!
  • A non-exclusive contract allows you to look at and consider homes suggested by different agents.
  • They help you find the right home for you by going over the listings. They take you to the houses for actual ocular inspections – yes, driving you to the houses themselves – and can even advise you for or against certain properties.
  • They can also give you advice on how to better prepare for a home purchase, how to make an offer, as well as how to get a good Malaysian mortgage loan.
  • They can give you advice on which mortgage lender, inspector, real estate attorney, etc to go to. However, you don’t have to follow their advice on these things; you can always go to whom you are most comfortable with.
  • Take time to interview several agents before signing up with anyone. It is best to consider a ‘trial period’ with a potential agent to test the waters between the two of you.

Also see my previous article about Tips in Buying a Retirement Home. Alternatively, also check out my friend Gary DiMauro’s article on agents here – it’s a good read.

Hope that helps!

-Benjamin (the specialist Bonaire Island Malaysia property agent)

Your Offer For Kirana Residence Rejected? Here’s Why…

Hi readers! Ben here yet again.

Here’s a another update from me this week. First of all, I want to thank you for loving my last blog post. It inspire me to write again :)

If you think your house hunting or deal comes to an end as soon as you make that final offer, then you are wrong. Malaysian home owners, even when they have already agreed verbally about ‘getting the deal closed’ with you does not necessarily mean that they will have the deal closed for your benefit.

Recently I have been getting emails from our buyers who invested in Kirana Residence offer the other day (if you have missed the flyer, then send us an empty email at special_offers@bonaireislandrealestate.com and we will put you in our special list). It seems that the rejection rate is kinda high for that property…

You see, as long as that final offer for has yet been signed, they can always reject your offer. That is why it is extremely important for you to make certain that your offer is rejection-proof. For one, you have to make sure that everything that you’ve talked about in the preliminary talks would be incorporated in the written offer.

Also, you have to make sure that your offer contains everything that they need to know about your offer – how much you’re willing to pay for their house, when you intend to pay up for the house, what conditions you have for paying for the house as well as, and more importantly, how you intend to pay the house. And since you are likely to pay up the house via a mortgage loan, it would be best that your offer comes with the necessary documents about your mortgage loan (as an assurance of sorts of your capacity to pay).

Reasons Why Your Offer Would Be Rejected

Two, you have to make certain that your offer does not fall to any of these rejection situations:

  1. The Malaysian home seller ended up  changing his mind about the final price. You and the home seller may have agreed on a bargained final selling price of the house, but he somehow changed his mind overnight and forgot (intentionally and unintentionally both) to notify you or your agent about it. So when he gets your offer with the lower final price, he decides on it with a no. Make sure that you’ve convinced your seller that the price is not bad enough and convince him enough for him not to change his mind. (It would be best that you talk to both owners and not just the husband *Wink*)
  2. Someone else came up with a higher offer. This is a very common scenario in a hot house. You’ll have to compete with tons of other buyers and if one of them happens to be willing to go the distance on the final price, there is really nothing you can do about it. You can either give up and look for another Malaysian house, or compete with the bigger offer which isn’t always the wisest thing to do anyway.
  3. Your contingencies are not satisfactory for them. The contingencies are the conditions that need to happen/be fulfilled before the final sale of the house takes place. If you have listed contingencies that are too difficult for the owner to achieve, or at least too costly (i.e. roof repair), or your end of the conditions (i.e. present a complete set of papers for mortgage) do not meet their requirements, they may reject it until you give them something more satisfactory.
  4. Your offer lacks some very important requirements. You may have forgotten to indicate any of the essential details of the sale and thus it seemed unsatisfactory for the home seller. Until you fulfill that, they may have to say no to your offer.
  5. There is something that they don’t agree on. Maybe your down payment amount was too small for them, or your promised pay date is a little too late for their preference. It could be anything on your offer that they don’t agree on. In these cases, it is best to resume talks and renegotiate on the whole offer.

Keep those emails coming in! And if you are going to MAPEX, remember to come over to say hi! Details on that expo can be found here.

-Benjamin

Website Review – PropertyReviews.my

We have long been raving about the impact that the Internet has got on real estate – no matter if we are in Bonaire in Florida or Kuala Lumpur in Malaysia. We also follow closely Simon Baker’s PropertyPortalWatch website – being a seasoned property portal executive he knows a thing or two about this business!

We have recently stumbled upon this rather fabulous property reviews site which focuses on opinions of Malaysia property called PropertyReviews.my – the database is small, but the articles are rather fabulous… and truthful. Our agents go to the site as part of their research to collect information for their respective clients. It is now focused on Mont Kiara and Bangsar properties for some reason – we hope it will expand its coverage soon.

By the way, if you have not heard from us in awhile, well, we have been closing some rather big real estate deals in Malaysia recently – from Sentul to KLCC. Our article on foreclosure (see here) has attracted some controversy – we will write a follow up blog post soon.

BonaireIslandRealEstate is committed to your success in Malaysia property. For a free white paper on Malaysia Property Trends 2014, email whitepaper@bonaireislandrealestate.com or call 03-56899991 (ask for Sally Lee or Richard Craig).