Buying a House FAQs - Old Houses Malta

Buying a House FAQs

By Old Houses Malta | The Deal

Especially if you’re a first time buying a house might seem like an over complicated process, and you’re probably right. There is a lot of legal stuff you will need to get sorted. The below questions help you ease some of that pain by making sure you’re aware of the facts.

After the promise of sale can I get the key?

Well, you can. But strictly speaking, No!! Not even if its offered to you should resist the temptation. Instead I would take a lot of photos before you commit. Also try to speak to the owner to see if it would be fine with them if you visit the house till the contract is signed. You need to build a good relationship with the previous owner since you might need him again in the future, so use this time to your advantage.

Can I store my belongings on the house after promise of sale?

No!! You didn’t buy the house yet. If your things get damaged this would create an embarrassing situation with the previous owner.

Should I start any refurbishment work after the promise of sale?

Hell no!! The house isn’t yours yet. Get over it and move on. You payed the largest amount of money in your life but you don’t own the house just yet.

Who can I trust?

No one. The notary isn’t legally responsible for anything he does. That is if the notary made a mistake and missed the fact that the house doesn’t in fact belong to the seller your contract might be null. The bank and seller both need your money. To be safe I would always take a bank loan. The main reason for this is that the all parties involved start checking each other and avoid any careless mistakes. Its true that this will make your life slightly more complex however this will ensure that the process was done the right way.

Is the answer to all these questions “No”?


How much time from the promise of sale to the contract date?

This is negotiable between the buyer and seller. At the very least, in case you don’t have a bank loan and you have an efficient notary expect 1 month. If you are taking a bank loan always allow at least 3 months.

How much money do I need?

During the promise of sale you usually need 10% of the full amount. Furthermore you will need to pay tax on the house which is 5%. You then need to pay the notary and an architect to view the house and make sure that everything is safe. Notary prices vary expect anywhere between 4000 – 6000. First time buyers can take advantage of tax benefit schemes. In the case you are taking a bank loan the bank will ask that you invest at least 10%. The bank sometimes charge extra fees for research. You will also need to pay the architect for a house inspection and to fill in the bank documents. You will also need to pay for life and home insurance. Always calculate you need between 17% – 20% of the total amount saved up.

What is a sanction letter?

This is only issued in case you are taking a bank loan. When the bank issues a sanction letter it means that you can assume that the loan will be issued. The sanction letter basically contains all the terms and conditions for the bank loan. See this like a guarantee from the bank that the notary can proceed with his research and your loan will very likely be issued. If you followed our process and consulted with the bank before buying the loan you already have a better chance that your loan will be issued.

What do I need to apply for a bank loan?

Usually you need I.D. Cards or passports. Records of any investments, life assurance policies or other valuable assets. You will also need an architect property report and valuation together with estimates of any work that needs to be carried out. You will also need building and site plans, and ground rent receipts should the house not be free hold.

What is a hypothec?

This means that even though the property is yours, the bank (or who ever has the hypothec) has the right to get paid first.

What is “free hold”?

No.. just kidding. When a house is not free hold it means it has ground rent. This means that even though the building belongs to the seller the land it’s built doesn’t. This would usually belong to the church or government. In such cases the owner has to pay ground rent (usually paid yearly). There is also perpetual ground rent which means that after paying the ground rent for a number of years the land will eventually be yours. If the house is not free hold make sure you ask for the ground rent fees and terms.

The seller doesn’t have a site plan. What should I do?

You will need to contact a drafts man to do this for you. Expect the plan to cost you around 600 euros, depending on the size of the house. You will need the plan to apply for the bank loan and for any quotations you might need, for example kitchen and bathroom.

How much does home insurance cost?

As a general rule, you can get how much your house costs and dividing the number by 1000. That is the amount you will be paying yearly. So if your house costs 200,000 expect to pay around 200 euros a year.

What papers should I keep?

Anything you sign make sure you have a copy of. Even if the notary doesn’t give you a copy just ask for one. Remember that he is not legally responsible, you are.

How to transfer the electric meter?

There might be some exceptions here. But usually the process is quite simple. You will need the last paid bill, a transfer sheet filled signed by the previous owner, photocopy of your and the previous’ owner ID card. Go to one of the Arms outlets, wait in the queue, pay any pending bills and the meter is transferred. While you are there make sure you tell arms that your new house is your new location. This will get you government subsidies on any electrical billing.

Is the house mine after the contract date?

Legally yes. You are free to do whatever you want. HOWEVER, the house is now under your responsibility. If you mess it up you have lost all the value that people who came before you have been working with. It is your responsibility so make sure you deal with the house carefully until it’s time to pass it to the next owner.

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