Buying a new home is one of life’s milestones, so it should be an exciting time that goes to plan. But it can also be stressful and expensive. So how can you ensure you avoid the latter and effortlessly find yourself in the house of your dreams?
Follow our step-by-step guide to find out.
Set a Budget
It’s easy to get carried away with the idea of buying a house, but it’s vital to live within your means, especially when you remember how many other costs will have to come out of your income, including utility bills and food.
A visit to you bank will help you to understand the property price that you can afford. It is likely that your home loan will cover around 90% of the purchase price and completion costs of your home, and be worked out on monthly repayments. You will also need to take out life insurance to cover the full value of the property, as well as buildings cover too.
Bear in mind that some property purchasing fees, such as notary and permits costs, may also need to be covered by your loan in order for you to be able to afford them. It is important to always ask about all the costs you will be charged prior to committing yourself to something (Example of some costs you will incur; bank charges, stamp duty, notary charges and architect charges).
Local banks have loan calculators that will help you to work out monthly repayments that you can afford. It is a good idea to shop around for the best loan rates and conditions by visiting different banks in Malta. This could make a real difference to the amount you pay.
Find a Property in Malta
Once you know the parameters of your budget, you can start looking for a property within it.
You can begin by narrowing down the areas that you would consider living in, as well as the type of home you would like to buy. There are various options on how to search for a property, either through the use of online and print media, or through a sensar or through a real estate agent. A good estate agent will be able to advise you on what you can expect to buy within your budget, as well as give you an idea of the many properties that are available on the market. Plus, with their industry knowledge, estate agents may also be able to offer information about the best properties, as and when they become available.
Meanwhile, based on your income and some other contributing factors, you may be entitled to Government housing. For detailed information on this, and to learn more about whether you qualify, click here.
Buying Your Property in Malta
Once you have found your ideal property, you are well on your way to owning your dream home.
Depending on whether or not you are buying the property through an estate agent, you may wish to negotiate the price. A real estate agent will help to do this for you; otherwise you will have to negotiate with the seller directly.
Once you have agreed on a price and this has been accepted by the seller, you will go on to sign a Preliminary Agreement, known locally as a Konvenju. This agreement binds both you (as the purchaser) and the seller to the transaction, and specifies a date by which everything must be completed. At this point you will be required to pay 1% provisional stamp duty as part payment of the full 5% (the balance of which is due on signing of the final deed), and an agreed deposit, usually 10% of the agreed price for the property.
In the weeks that follow, your notary will carry out necessary research on the property to verify legal title and ensure that there are no outstanding debts, hypothecs or liens on the property. Meanwhile, you will need to complete your side of the bargain, by ensuring your bank loan is in hand, as well as any required permits and forms stipulated by the Konvenju, while the vendor will complete all the aspects of his/her side of the deal.
Once all this has been completed, a date will be set to sign the Final Deed. This will usually be done at your bank’s legal offices, or at the offices of your notary. At this point the balance of the selling price is given to the vendor, as well as the balance due to the Commissioner of Inland Revenue for stamp duty and the notary fees to the Notary Public.
You will now take ownership of your property. The keys will be handed over and you are ready to move into your new home!
Within 15 days (as specified by legislation) from the date of the deed of transfer of property, and where the property is in a registration area, your notary must apply for the registration of the property at the Land Registry. This is applicable to both first-time registration and subsequent registration where the property has been previously registered. Your Notary will be expected to provide the Land Registry with proof of ownership, at least prima facie evidence. This includes the legal document on which your claim is based, such as a deed, the original registration plan and a detailed plan.
While it isn’t the norm, some buyers may face problems during the purchasing of their property or afterwards. You may discover that your chosen property has structural difficulties or planning irregularities, a defect in its title or that it might be subject to a servitude. If this is the case, you will need to contact your notary for advice. You will then be guided on which elements must be resolved by the seller before the deal is legally completed.