For many first-time home buyers, choosing to purchase a property is undoubtedly one of the biggest decisions they will ever make. It’s important to know the ins and outs of the process, the expenses and charges involved, and what methods would simplify their buying process.
It is important to have a budget in mind before searching for properties in Malta or Gozo. Many first-time home buyers—and home buyers in general—borrow funds to finance their purchase. In that case, the bank can give you an indication of your borrowing limit based on your salary, factoring in other expenses you’re already committed to. Remember that this is only an indication, so be sure to search for properties priced below this figure.
You should also ask your specialist agent to show you properties below and above that budget with room for negotiation according to your threshold. It’s a good idea to deduct costs of items such as furnishings and notary fees so that you’ll have a more accurate overall figure. It’s recommended that you visit your local bank to confirm the amount you can borrow; if you’re buying a property with your partner, you’ll be able to use your joint income.
Once you have a budget in mind, you can start hunting for a property. To simplify things, we suggest making a list of needs as well as a wish list; follow that up by going online and searching for your minimum requirements, gradually narrowing this down to properties you’d really like to view.
The next, and perhaps most exciting, step would be to contact one of our expert agents at Damcar Properties and schedule viewings! First-time home buyers usually decide to work with a real estate agent for the simple reason that they take care of details like scheduling, saving you a lot of time and hassle in the process.
A good real estate agent will also accompany you on any property visits, and will have the market knowledge you need when it’s time to negotiate.
Take note of the properties you like, and cross out the ones that don’t meet your expectations. Thoroughly inspect the property, and record any defects or lack of maintenance that could allow you to negotiate the price. Along the way, you'll start to understand what type of property suits your needs and preferences.
Once you’ve tracked down the perfect property for you, it’s time to make an offer. Check the selling price of similar properties in the area before proposing a price; if the vendor agrees, remember that the agreement is still only verbal, and despite being given in good-faith, it’s non-committal.
Once you’ve agreed on a price, a date is set for signing of the Promise of Sale (“Konvenju”). Drafted up by a notary, this is a contract between the buyer and seller laying out terms and conditions in writing. The contract may be subject to a number of conditions. For example, the seller may need to finalise specific details or jobs in relation to the property; as the purchaser, you may wish to have the property evaluated by an architect for any structural defects, and decide to only buy the property should it be of sound structure. Other conditions could be related to the permit of the property, or that you successfully secure financing for the property. In some cases may a promise of sale be extended, provided that everyone agrees to it.
The contract would also include a date for the signing of the Final Deed, which would serve as a deadline for both parties. For the purpose of the Promise of Sale, the notary represents the government and is impartial. Once the Promise of Sale has been signed, you’ll be asked to pay a deposit—usually 10%—to the seller, and a further 1% provisional stamp duty to the notary. Both you and the seller will get a copy of the contract.
The notary would then need a further six weeks to carry out research on the property. This includes verifying the legal title, ensuring there are no loans taken against said property, and that the vendor is free to sell the property.
If all the conditions outlined in the Promise of Sale be satisfied, the parties then meet to sign the Final Deed. This would be read out by the notary and signed again by both parties. At this stage, you’ll need to pay all pending balances, including the remaining balance on the property, stamp duty, and Notary Public fees. The contract is then registered at the Public Registry, and the keys to the property are handed over to you—a proud homeowner.
The property-hunting journey may take anything from one week to months—or even a year—depending on your wish list and urgency to find a property. Whether you’re in a hurry or planning ahead of time, it’s important to bear in mind that property searches and signing of contracts take an average of three to six months.
Once you've purchased your first home, and it’s going to be used as your ordinary residence, a stamp duty of 5% will be charged on the remaining balance above €175,000. That means saving a cool €6,500!