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Hong Kong - Buying Property
Newspapers and Magazines
South China Morning Post - Newspaper with property for purchase section- and online version
World Property Journal - Print and online newspaper about the property market in Hong Kong
Print and online magazine listing Hong Kong property opportunities
News and advice websites
It is standard practice for a property agent to be assigned to you to when you buy an apartment. They oversee the prices, offer advice, help with paperwork and put in offers. You must sign an estate agency agreement with them to officially set their commission and put in writing other legal expectations on their part. A license is required when it comes to property agents and you can search the name of the property agent or license number yourself by looking on the EAA website.
Due to the transient nature of Hong Kong, expats almost never buy. Expats often have two year contracts but they need to have lived in Hong Kong for at least 7 years and be a Permanent Resident to begin the process. So, while it is still possible to buy in Hong Kong as an expat, it is rare for them to buy and consequently, though there are organisations for Mainland Chinese property buyers, such organisations do not really exist for expats. It is better to look up properties from the websites mentioned earlier in the guide and through that, find property agencies. Go in person to meet prospective agents too.
The procedure for buying a house is as follows.
1.Contact your current bank or mortgage company and make them aware of your desire for a mortgage and loan. They will assign a consultant to you to talk you through options. Have a mortgage in principle or indication of how much you can borrow ready.
2.Once you have secured a property agent who is going to oversee the house buying process and they have found a house for you, you will arrange to view the property with the agent and they will arrange it through the seller.
3.You inspect the property and see if there is room for negotiation on the price with the seller or agent.
4.Ask the agent and seller about the permitted use of the property and confirm via the Deed of Mutual Covenant and the Occupation Permit. Additionally confirmation from the Government Lease in terms of restrictions for the land.
5.Inspect the property thoroughly and decide if you wish to have a maintenance official check the property, or ask the seller if any maintenance or repairs need to be done. Ask for costs and negotiate who will be responsible for these changes before and after the property is sold.
6.Ask a solicitor about the terms for renewing the Government Lease.
7.The property agent makes an offer.
8.Hire a mortgage surveyor to assess the value of the property, usually through the mortgage company. You may need to pay for this, or the mortgage company might. This is different to a surveyor. If you wish, this is the time to book a qualified independent surveyor to thoroughly examine the property for your own review.
9.The offer is accepted. You continue the mortgage in its final stages and you may pay a deposit to the estate agents to show you are committed.
10.The seller and buyer sign a preliminary agreement provided by the agent which states the agreement to sell and buy the property - signed by both parties.
11.Yourself and the solicitor are satisfied about the surveyor's findings, the mortgage offer has been received, deposit arrangements are complete and the date of completion is known - when the keys are handed over.
12.Buyer and seller have their individual solicitors to represent them and to negotiate on your and their behalf. Both parties sign a formal agreement for purchase and sale. The lawyer of the seller provides the paperwork and the lawyer of the buyer checks it. The buyer transfers over the full deposit. Insurance is arranged on this date too. The seller arranges for final meter readings and you may now set up new utility accounts for the property.
13.Completion of sale - the mortgage lender has released the money, your solicitor has received the deeds to the land and you have been handed the keys by the seller and they have vacated.
It is definitely worth asking through word of mouth about reputable lawyers. If you get their name, look for reviews and ratings. Your best bet is through personal recommendations. If it is a Chinese colleague/friend who recommends someone to you, make sure that you will be able to communicate effectively in English. Lawyers in Hong Kong must be certified by the Law Society of Hong Kong. A very reliable way to get a lawyer other than word of mouth is to go on the LAHK website. It lists Solicitors’ Firms, lawyers’ names and contact details.
Buyers are also entitled to a free 45-minute legal consultation with firms who have volunteered the service on the site, here.
The fees for a lawyer would be 0.075%-0.125% of the property value. Independent surveyors are rarely used by expats as apartments bought by those that can afford it are generally of a high standard. Surveyors can be pricey and it is worth checking recommendations from locals/colleagues.
The system goes as follows: the solicitor who is working with you on the buyer's side provides the necessary documentation and arranges it for registration. With each document is a memorial form. Memorial forms are verified by your solicitor. The documents should have a lodgement. Once compiled all of these documents plus the registration fee are presented to the Land Registry and are then entered into the Integrated Registration Information System. You will be issued then with a receipt and you will pay the fee.
You need a reliable estate/property agent and lawyer to aid in understanding and avoiding problems in the house buying process. Make sure both speak English to a level you can communicate effectively in, and make sure that they have spoken to the seller and he is not looking for a local buyer. A problem you may encounter is that banks do not like to lend to buyers interested in older properties, and also there may be restrictions on this loan, usually of 15 years. There is also a loan-to-value mortgage system wherein if buyers are purchasing an apartment under $7,000,000HKD they must put down 60% of the property price to secure it. Combined with high house prices, an unstable property market and paying Stamp Duty - which is an extra 15% of the market value of the property on top of the buying price - buying a property in Hong Kong as an expat is very volatile and extremely expensive, even before taking into consideration mistakes and litigation problems. See this site for more details.