Things To Do When You Buy a House in Bali

things to do when you buy a house in bali
Image by Martin Fuhrmann on Pixabay

Buying a home is one of life’s most important decisions. It’s also a major stress point, right up there with divorce and a new job!

Where you buy doesn’t really matter either. It could be in your home country or overseas. The home buying process has all the potential to push all the wrong buttons and turn everything ugly.

Buying a home in Bali is no different. Some might say it’s more difficult than other places, but it doesn’t have to be.

Most of the horror stories occur because rules aren’t followed, corners were cut and laws and regulations misunderstood.

I hope the following tips will help you understand the process of buying a home in Bali better … and make the experience more memorable and maybe even enjoyable!

Have a plan and do your research

We’re very keen on talking to our clients about Investment Road Maps. You can read more about those here …

It’s important you’re clear about what you want to do because that will change how you can do it. Sounds simple, but you’d be surprised at how many people I deal with who don’t really know what they want.

Do you plan to retire? Want to start a business? Fancy a holiday-rental home or a place to escape on your own holiday? Maybe it’s all of those things!

The point is, if you have a plan you’re more likely to be able to deal with hiccups and things like taxes, permits, zoning and so on.

Research is important here, because you really do need to find information that’s going to help you get what you want and we encourage you to find out as much as you can.

When it comes to researching for property in Bali, there are several ways to do this:

  1. local and expatriate newspapers have adverts and classifieds

  2. Google has thousands of websites! Just type in property for sale in Canggu and you’ll see what I mean!

  3. social media, especially Facebook, has hundreds of groups and real estate agents have dozens of listings.

It’s important to note that many of the agencies and agents and groups are marketing the same listings. I touch on that later, and that’s why it’s important you get on with your agent!

Take notes!

Sounds easy but how many of you just dive into Google and don’t write things down?

Be honest now!

So, get into the habit of taking notes. Write things down. Make lists. It will make things clearer in the long run. Compare areas and prices, and if you’re using agencies, compare service. You can even compare their social media posts to get a feeling about what’s important to them. Is it pictures of food and parties and good times … or posts that help people learn? Maybe it’s a mix of both.

This will give you a better feel for what, and importantly, who you’re dealing with.

Here’s a useful link to learn more about what the rules about owning property in Indonesia are all about.

Find an agent you can trust

If you decide to buy property through an agent, it really helps to choose one that’s not only professional in the way they do business, but is also one you like, or at least you feel you can trust.

That’s not such an easy thing to do really. I mean, how do you feel you can trust someone you’ve found online and probably never met? Or someone you’ve met just once?

I think the best way you can get to know the quality of an agent is to meet them directly and ask them questions.

Don’t be shy!

It’s your money on the line and you have every right to ask as many questions as you want.

Here are 7 questions you should have at the top of your list.

You should also take the time to ‘research’ them (the agent and agency) on social media.

  • What sort of things are they posting?

  • Do they share your interests?

  • Could you imagine meeting them and getting along?

The most important thing is to feel you have a connection. Trust your feelings from the first time you meet. It’s also a good idea to ask around through your networks and connections for recommendations and experiences anyone has had.

buying a house in bali find the right agent
Image by ZJWZPRZ on Pixabay

It’s worth noting that most vendors in Bali are not exclusively working with one agent or agency. If you see something you like it’s worth asking the agent you want to work with if they can help put the deal together for you. Even if they don’t have that particular villa listed.

The best agents will be more than happy to work together with other agents or agencies to ensure your home buying journey is easier and you get what you want.

Unfortunately, the worst are the ones that don’t have your interest in mind at all.  They’re only after their commission!

Plan site inspections

When you’ve found a few options you like, and touched bases with an agent you feel comfortable with, it’s time to go inspect.

This is where using an agent is useful because they’ll have direct contact with vendors and can save you the hassle of trying to do this yourself. Some people do try though and for some it works. For most it’s a pain.

It’s worth planning these inspections in advance. You don’t want to leave inspections to the last minute just in case the villa you want to see is occupied or under renovations or unavailable for whatever reason.

If you can, plan a couple of days ahead of time.

Negotiate and make a formal letter of offer

Don’t feel pressurized to make a rushed decision.

Remember, it’s your money!

When you find a property that ticks most (maybe all) of your boxes it’s time to negotiate. Again, working with an agent makes this part of the process easier and takes away unnecessary stress.

Any offer you make should be based on a sound understanding of the property’s market value.

Your agent should be able to provide you with the prices of comparable properties in the same area as well as recent transactions. This is key to being able to negotiate properly.

Good negotiations make the buyer feel they’ve got a good deal and make the vendor feel they’ve got a good price. Good negotiations are usually win-win scenarios!

One of the best ways to negotiate effectively is to work with your agent and submit a formal written offer. It shows you’re serious and that gives you an advantage in any negotiation.

Bear in mind there are taxes to pay!

Freehold properties are subject to 5% purchase tax while the vendor’s income tax is 2.5% on the value determined by the government.

Leasehold properties are subject to 10% income tax for the vendor.

Down payments and deposits

In Bali, it’s normal to release 10% of the purchase price as a deposit for a property.

It’s also normal for this to be held in escrow by the notary of your choice.

It is definitely NOT normal for your agent or agency to hold onto your money in Bali!

The notary will also then carry out Due Diligence to make sure all of the documents and taxes are in order. If Due Diligence uncovers something seriously wrong that can’t be fixed you can get your deposit back. But, if you should choose to pull out of the deal at this stage because you’ve had a change of heart, your deposit is not normally refunded.

Due Diligence by notary PPAT

Due Diligence can take between 1-week and 1-month to complete, depending on the property/land.

It’s a very necessary part of the legal process undertaken by a notary or a lawyer to ensure the vendor has the right to sell, all paperwork is in order and there are no disputes on the property/land.

It’s worth having a look at theses 3 insights every buyer should know.

Image by Naviti on Pixabay

Deed of Sale and Purchase

After Due Diligence has been done and everything has been declared ‘clean’ it’s time to sign the Deed of Sale and Purchase (in Indonesian it’s called Akta Jual Beli – AJB).

It’s at this point in the process that full payments have to be made to the notary.

The Deed of Sale and Purchase is the transfer of legal rights of the property/land in the sense that the vendor formally signs everything over to you, the buyer, for a price you have both agreed upon.

Once this is done, you can open the champagne and celebrate owning your new home in Bali!

And you’ve managed to do that with minimal hassles!

I hope this helps and if you want to discuss anything I’ve outlined here, please feel free to get in touch!

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Andrzej Barski

Director of Seven Stones Indonesia

Andrzej is Co-owner/ Founder and Director of Seven Stones Indonesia. He was born in the UK to Polish parents and has been living in Indonesia for more than 33-years. He is a skilled writer, trainer and marketer with a deep understanding of Indonesia and its many cultures after spending many years travelling across the archipelago from North Sumatra to Irian Jaya.

His experience covers Marketing, Branding, Advertising, Publishing, Real Estate and Training for 5-Star Hotels and Resorts in Bali and Jakarta, which has given him a passion for the customer experience. He’s a published author and a regular contributor to local and regional publications. His interests include conservation, eco-conscious initiatives, spirituality and motorcycles. Andrzej speaks English and Indonesian.

Terje H. Nilsen

Director of Seven Stones Indonesia

Terje is from Norway and has been living in Indonesia for over 20-years. He first came to Indonesia as a child and after earning his degree in Business Administration from the University of Agder in Norway, he moved to Indonesia in 1993, where he has worked in leading positions in education and the fitness/ wellness industries all over Indonesia including Jakarta, Banjarmasin, Medan and Bali.

He was Co-owner and CEO of the Paradise Property Group for 10-years and led the company to great success. He is now Co-owner/ Founder and Director of Seven Stones Indonesia offering market entry services for foreign investors, legal advice, sourcing of investments and in particular real estate investments. He has a soft spot for eco-friendly and socially sustainable projects and investments, while his personal business strengths are in property law, tourism trends, macroeconomics, Indonesian government and regulations. His personal interests are in sport, adventure, history and spiritual experiences.

Terje’s leadership, drive and knowledge are recognised across many industries and his unrivalled network of high level contacts in government and business spans the globe. He believes you do good and do well but always in that order. Terje speaks English, Indonesian and Norwegian.

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Ridwan Jasin Zachrie

CFO of Seven Stones Indonesia, Jakarta

Ridwan is one of Indonesia’s top executives with a long and illustrious career in the financial world. He holds several professional certifications including being a Certified Business Valuer (CBV) issued by the Australian Academy of Finance and Management; Broker-Dealer Representative (WPPE); and The Directorship Certification for Directors and Commissioners, issued by the Indonesian Institute of Commissioners and Directors.

His experience includes being the Managing Director at one of the top investment banking groups in the region, the Recapital Group, the CFO at State-owned enterprises in fishery industry and the CEO at Tanri Abeng & Son Holding. He’s also been an Independent Commissioner in several Financial Service companies and on the Audit and Risk Committee at Bank BTPN Tbk, Berau Coal Energy Tbk, Aetra Air Jakarta as well as working for Citibank, Bank Mandiri and HSBC. His last position was as CFO at PT Citra Putra Mandiri – OSO Group.

Ridwan has won a number of prestigious awards including the Best CFO Awards 2019 (Institute of Certified Management Accountant Australia-Indonesia); Asia Pacific Young Business Leader awarded by Asia 21 Network New York USA (Tokyo 2008); UK Alumni Business Awards 2008 awarded by the British Council; and The Most Inspiring Human Resources Practitioners’ version of Human Capital Magazine 2010.

He’s a member of the Board of Trustees of the Alumni Association of the Faculty of Law, Trisakti University, Co-Founder of the Paramadina Public Policy Institute and actively writes books, publications and articles in the mass media. He co-authored “Korupsi Mengorupsi Indonesia” in 2009, which helps those with an interest in understanding governance in Indonesia and the critical issue of corruption. Ridwan speaks Indonesian and English.

Per Fredrik Ecker

Managing Director of Seven Stones Indonesia, Jakarta

Per is the Managing Director of the Seven Stones Indonesia (SSI) Jakarta office and has more than 25-years’ experience in Indonesia, China, and Western Europe. He previously worked in senior management positions with Q-Free ASA, Siemens AG, and other companies in the telecom sector. Over the last six years, he has been the Chairman of the Indonesia-Norway Business Council (INBC) and recently become elected to be on the board of EuroCham Indonesia.

His most recent experience is within Intelligent Transport Solutions (ITS), Telecom, and other sectors within the Indonesian market. He is today through his position in SSI and by representing Norway Connect, promoting Nordic and European companies that would like to explore business opportunities in the Indonesian market. He’s also playing an active role to help create the Nordic House concept in Jakarta that will provide an excellent platform for Nordic companies entering Indonesia, where they’ll find a community that can offer support with trusted information and affordable services to enter this market.