Navigating the Home Buying Process: A Comprehensive Guide

Listen to the blog audio:

🟢 Phase 1: Preparing Before Buying a Property

1️⃣ Assess Financial Capability and Mortgage Budget

• Refer to the bank's mortgage repayment ratio (the maximum mortgage ratio has been adjusted to 70% since 2024)
• Review existing assets, such as down payment funds, investments, family support, etc.

2️⃣ Check Personal Credit Rating (TransUnion)

• Before applying for a mortgage, it is recommended to check your credit rating with TransUnion
• Credit rating affects the terms of mortgage approval by banks, such as interest rates, loan ratios, etc.

3️⃣ Calculate Total Property Purchase Costs and Additional Fees

• In addition to the property price and down payment, additional expenses must be calculated, such as:
• Stamp Duty (difference between first-time buyers and second property)
• Legal Fees (approximately $7,000 - $30,000)
• Mortgage Insurance Fee
• Brokerage Commission (generally 1% of the property price)
• Fire Insurance (required by mortgage banks, but may be exempt if the estate management fee already includes fire insurance)
• Renovation and Moving Costs

🔵 Phase 2: Finding and Selecting a Property

4️⃣ Property Search: Choosing Between New Developments or Secondary Market Properties

• New Developments: Purchase directly from the developer
• Secondary Market Properties: Purchase through real estate agents or private transactions
• Considerations: Location, age of the property, management fees, transportation facilities, school districts, investment potential, etc.

5️⃣ Conducting Property Valuation and Market Comparison

• Valuation can be done through banks or surveying firms to ensure the property price aligns with market value, facilitating mortgage approval
• Compare transaction prices in the same area to avoid overpaying

🟠 Stage 3: Signing the Sales and Purchase Agreement

6️⃣ Sign the "Provisional Agreement for Sale & Purchase"

• Pay a 3%-5% "initial deposit" before signing the contract. Breaching the contract at this stage may result in the loss of the deposit.
• Ensure that the contract terms are clear, such as the handover period, unit fittings, special clauses, etc.

7️⃣ Find a lawyer to handle the "Formal Sales and Purchase Agreement" and legal procedures

• Usually, the formal Sales and Purchase Agreement (Agreement for Sale & Purchase) is signed within 14 days of signing the provisional agreement.
• Pay the "major deposit" (10% of the property price minus the initial deposit). Breaching the contract at this stage may result in higher compensation.

🟡 Stage 4: Mortgage Application and Tax Payment

8️⃣ Mortgage Application and Bank Approval (Loan Application)

• You can apply for mortgages from multiple banks simultaneously to compare different interest rates, loan amounts, and terms
• Purchase mortgage insurance (Mortgage Insurance Programme, MIP) as needed
• Provide proof of income (pay slips, tax returns, MPF contribution records, etc.)

9️⃣ Payment of Stamp Duty

• Pay stamp duty at different rates based on the property price

🟣 Stage 5: Transaction Completion and Handover

🔟 Complete the transaction and make the final payment

• After the mortgage approval is completed, the lawyer will arrange to complete the transaction and pay the balance (usually through bank transfer)
• After the transaction is completed, the real estate agent will notify the handover date

1️⃣1️⃣ Inspection and Handover

• Inspect whether the unit complies with the contract terms, and report any issues immediately
• It is recommended to hire a building inspector to check for structural, electrical, water leakage, and other issues

1️⃣2️⃣ Transfer of Ownership and Management Fees

• Sign the Assignment deed to officially become the owner
• Register with water, electricity, gas, and management companies, and start paying related fees

🔴 Stage 6: Moving In and Follow-Up Arrangements

1️⃣3️⃣ Arrange Renovation and Interior Design

• If renovation is needed, hire a renovation company or designer for the transformation
• Ensure the construction complies with building regulations to avoid illegal renovations

1️⃣4️⃣ Arrange Moving and New Home Registration

• Contact a moving company to arrange the move
• Notify government departments (Inland Revenue Department, Transport Department) to update your address

Want to learn more about LetsGetHome propertybuying guide?

Free self-listing servicehttps://www.letsgethome.com/zh-HK/listings/new/self-listing