What to look for when buying a house in Taiwan?

[urodacus]

Real estate agents take a huge slug here for commission. Seller pays 4%, and buyer pays 1%. These are slightly negotiable, but not often. If you sign a contract, the real estate agent asks the seller to nominate an ideal price, that is published in the advert. Then you also nominate a price below which you refuse to sell. if the negotiations for a sale with the buyer do not reach the lower price you nominate, then the agent may agree to reduce the commission they demand so that an offer below your bottom threshold will still be acceptable. even allowing them sole agent status does not decrease the commission they demand.

Remember that the agent is not there to represent you: they do not act in best faith to represent the seller for the highest price. Nor do they represent the buyer to get the lowest price possible. their only imperative is selling as fast as possible to maximise their commission.

wankers. I think that that much commission for a week's work is ridiculous. I would change jobs if I had no heart, but I'm too nice to spend my days arse raping the general public.

[Rotalsnart]

Another angle, I wonder if one is buying land, or a house. I feel the safer investment is the land part.

You're buying both and get deeds for both. Your building sits on land and that land is parcelled out among the owners proportionately. I have no idea how they do this and I'm sure the mathematics is confusing and complicated, but you too can be the proud owner of your own 2.57 pings of land!

My understanding is that this is usually the case but not necessarily so. So the buyer needs to be very careful that both the building and land are being offered and sold to them, and exactly how many ping of each, before making their purchase. Some places in fact are sold without land.

One advantage of buying an older low-rise apartment is that you can get a higher proportion of the land it sits on. For example, I own 22.4 ping of floor space, but 8 ping of land, with my 37 year old apartment. (This is because the plot on which the building sits is 32 ping, divided by the four units in the four-story building.) This may prove beneficial if the building is ever torn down and converted into a high rise. (I.e. I would have a higher pro-rata claim on the floor space in the high rise, although I myself haven't exactly investigated the legal aspects of this -- whether it is worked out purely through negotiation with the builders and other tenants or what.)

[cranky laowai]

the buyer needs to be very careful that both the building and land are being offered and sold to them, and exactly how many ping of each, before making their purchase. Some places in fact are sold without land.

I know someone who thought he was buying a house -- a real stand-alone house -- with the land. But he wasn't careful enough and ended up signing papers on the house without the land. Not only is what he ended up with worth much less than he expected, he has to pay the landowner annual rent for the right to use the land for his house.

So, yes, be very careful about this.

[Mother Theresa]

Regarding loans. . .

We paid about 10% down and will make another payment shortly to bring that up to about 25%.

Of the remaining portion, we're borrowing for 20 years, as is customary in Taiwan (instead of the 30 year loans that are customary in the US). Also, as is customary here, we got more than one loan. About 3/4 of our loan is at 1.325% and the other 1/4 is at 1.85%. My wife negotiated those rates with the lenders.

We will pay interest only for the first 2 years (and after that have to start paying principal). Consequently, for the first two years our payments will be less than our current rent payments.

Additionally, while a certain level of rent payments are tax deductible in Taiwan (assuming your landlord is honest and will give you receipts), the threshhold is higher for mortgage payments, so that will also make it cheaper than renting.

[Rotalsnart]

I know someone who thought he was buying a house -- a real stand-alone house -- with the land. But he wasn't careful enough and ended up signing papers on the house without the land. Not only is what he ended up with worth much less than he expected, he has to pay the landowner annual rent for the right to use the land for his house.

Ouch. Did he try to take any legal action when he found out he didn't get what he had bargained for? It would be very hard not to suspect that the original owner knew he was pulling a fast one on the buyer in a case like this.

[cranky laowai]

Did he try to take any legal action when he found out he didn't get what he had bargained for? It would be very hard not to suspect that the original owner knew he was pulling a fast one on the buyer in a case like this.

No legal action. The original owner promptly hightailed it for another country.

This was all a long time ago.

[Toe Tag]

Is there any rough rule-of-thumb for, how much you can borrow? e.g. if you make 100K/mo, put 20% down, the biggest monthly payment they'd let you make is X, which at current interest rate of Y on a 20 year loan means the maximum price you can afford is Z.

I have some of our first web resources for this thread...

http://jaoffice.com.tw/accounting.htm gives loan estimates

http://www.yungching.com.tw somewhere in there are listings. But I am now told there is no centralized "MLS" database. I guess you just have to find several sites like http://www.yungching.com.tw and try your luck.

[Incubus]

This is what I've read. The house you can afford should be 5 times your annual income and savings combined, and the monthly mortgage should be no more than 1/3 of your monthly income. So let's say you've got a million NT salted away in savings, and your annual income is also a million (2 million x 5 = 10 million). The target you should set for yourself is a house under 10 million if you don't want to risk overextending the finances.

[Toe Tag]

I found this ballpark in another thread.

In Taipei City, mortgages seem to be broken down into 2.5 million chunks. So the first 2.5 million may be a priced at 2.3%, but for only 2 or 3 years. After then, it will rise to, say, 2.5% for the rest of the term.

For you ballpark calculators, this chuck would translate into approximately NT$ 14,000 per month thru the term of your mortgage. I'm being liberal with the figures here, but the important takeaway is that you should expect to shell out approximately 14 G's (NT$ 14,000) for every 2.5 million that you plan to borrow.

Following this rule of thumb, if you plan to finance 5 million bucks, then you should plan to lay out NT$ 28,000. Et cetera, etc.

[Mother Theresa]

I found this ballpark in another thread.

In Taipei City, mortgages seem to be broken down into 2.5 million chunks. So the first 2.5 million may be a priced at 2.3%, but for only 2 or 3 years. After then, it will rise to, say, 2.5% for the rest of the term.

For you ballpark calculators, this chuck would translate into approximately NT$ 14,000 per month thru the term of your mortgage. I'm being liberal with the figures here, but the important takeaway is that you should expect to shell out approximately 14 G's (NT$ 14,000) for every 2.5 million that you plan to borrow.

Following this rule of thumb, if you plan to finance 5 million bucks, then you should plan to lay out NT$ 28,000. Et cetera, etc.

That rule of thumb appears to be pretty outdated and useless. Either that or my wife's a far better negotiator than I realized. That's a ballpark estimate of monthly mortgage payments based on 2.3% or 2.5% interest rate. As I said, our loans are at 1.325% and 1.85%, so our payments will be substantially lower than that guy figures/d.

Moreover, I thought you wanted to know what percent of the purchase price banks will lend these days in TAiwan, a different question altogether.

As for MLS, I believe you're correct and for some reason Taiwan lacks that great resource that is available in the US.