Property purchase

The weeks and days before the handover of keys to a new home are exhilarating and exhausting. It’s like nearing the end of a marathon. You can see the finish line and want to keep the momentum going, but you keep getting distracted by people on the sidelines cheering or booing. Closing a property is when you finally have to fork over the main sum to make the place your own, but it is also when you have to orchestrate a number of things to unfold at around the same time. That is why it’s prudent to draw up a schedule of what to do and when, to make life easier for yourself.

I must confess: while I tried diligently to purchase a property in Hong Kong, for one reason or another, all of them have fallen through. I was much more successful with a flat in downtown Toronto, and remain very happy with my property as an investment rather than a home. To get the inside scoop on the local scene, I had a long chat with Amanda, a friend who has been buying secondhand homes for herself (and then her family) for almost two decades. Amanda is also an interior designer, which made her life easier since she knew what hazards to look out for.

No Money, No Honey

First, there is the money part to get out of the way. According to Amanda, a handover date is usually set up about two or three working days after the final payment goes to your lawyer’s company account. That sum will include the remaining balance owing on the property — which your bank should have approved by this point as a mortgage loan plus whatever difference you may need to make up — plus the stamp duty owed on the flat. You then give your lawyer a separate cheque for their services.

As for your agent’s payment, that depends on what was previously negotiated. Think of it this way: your real estate agent is the final card you have left to play to get the flat that you were promised. As a commission is no paltry sum, you can withhold a certain percentage according to prior agreements depending on how bad the flat’s conditions are. This can be at your discretion, such as 50 percent upon handover and site inspection, and the balance upon after the previous owner completes repairs, which your agent presses for on your behalf. However, unless there is a major issue, most people will accept the premises as-is. After all, you are paying for it already, and you’ll probably want to renovate anyway. It is always more economical to get an entire flat done at the same time rather than repair it in bits and pieces. The previous owner can drag out repairs over a long time, leaving you in the lurch.

What’s in a Name

In the few weeks before handover, remember that utilities and telecommunication accounts have to be switched over to your name and your new home. It is similar to some landlords who insist that gas, water and electrical bills have to be in the name of the tenant. Set up appointments for phone, cable, Now TV, Internet and any other necessary installations within the premises after the handover date, and keep in mind that a deposit may be required. HKT usually requires two weeks’ notice for installation, so book early. If there is parking available and you own a vehicle, you need to apply for a parking permit through your building management, as well as a resident’s card, if applicable.

Prior to the key handover, any new owner can enter the premises legally twice. Even if there is a tenant living there, some owners would be willing to let buyers arrange viewings. You should use the visits to document its existing status and check for damage. Flick on the air-conditioner, take a look at the electrical and gas meters, test the light switches and doorbell, open all the windows and check the levers. Take a good look around the flat, as well as the common areas. Note where the garbage and recycle bins are situated on your floor, and where trucks and other vehicles can park near your building for your upcoming move.

Get the Goss

Most importantly, talk to the security guard. Mr. Lee or Mrs. Chan may eventually become your lifesaver, and it’s always good to get off on the right foot. Give them a heads up that you’ll be moving in soon, and that they should be prepared for renovation work and its accompanying noise pollution. Find out about the owners’ incorporation and what common area items are outstanding. Mingle with them, as they may be an invaluable source of information about a building you are just beginning to invest in.

Try to arrange the handover for late morning, as that gives you the ideal amount of daylight to see everything at its best (or worst). Walk though the entire apartment and check everything once again to ensure that it is in good working order — unless you are planning to gut the place. Even then, some things may be salvageable.

If you lack confidence that you know what to look for, enlist the help of a contractor or interior designer to conduct the final inspection with you. Most likely, you will have at least some minor renovations that will require the services of a professional; it’s best to get this person to walk through the space with you to point out things that may cost you down the road. Failing that, you can hire an independent building inspector to walk through the space with you. Although mostly retained for new properties, inspectors may assist secondhand property owners in helping determine what is defective. They typically charge a fee based on square footage. Keep in mind, though, that if you have already seen the premises and have accepted its defects as part of the purchase price negotiation, it will be too late to change your mind at the handover.

Congratulations! You’re finally home. Warts and all, it is your little corner of the world — and now is when you can truly craft it to become your castle.