Purchasing from Developers [Part 1]
Whenever you may think you know enough to purchase a property, do give some allowance to a margin of error and/or oversights. There are always seemingly little things that may be overlooked that have a significant impact when purchasing a property.
There are three standard ways to buy a property, namely by resale through agents, direct resale by owners or direct sale by developer.
Here's why you should directly from developers:
1. It is your one-time chance to buy at the minimum price
The developer's price is usually the benchmark; property prices seldom ever go lower than this. Hence in most instances, you are buying at the minimum rate, provided of course that the units were priced sensibly and the location is ideal. It's important to do your homework to compare sales prices of properties put up by other developers in the same vicinity. It is recommended that you compare prices between projects of similar quality by using the price on a per square foot basis.
Putting things into perspective, consider what would happen once a property is completed 2 to 3 years down the line, prices usually appreciate by 10% to 20% once the interest and holding costs for the purchasers are factored in.
2. Limited Discounts
Usually developers give discounts of 5% to 10% to civil servants, Bumiputras, their company staff, business associates, etc. If you are in luck, to qualify any discount, you should definitely consider taking full advantage of it. Also consider instead teaming up with your friends, relatives or co-workers who are also interested and negotiate for a bulk-buying discount from the developer.
3. Take Your Pick
The early bird catches the worm scenario comes to mind. Queue early and you will get the privilege to choose the unit of your liking, be it facing a park, the morning sun, a corner unit, high floors, etc.
4. Mint Condition Units
Given the choice between owning a brand new property with the latest modern designs, attractive layouts as opposed to buying a 20 year old unit which needs major repairs from time to time or a fresh coat of paint, it really is a no-brainer. If you are purchasing for personal use, staying in a brand new unit can cause a major "lifestyle" change for you.
5. 1 & ½ Years 'Warrantee'
Residential property developers are obliged to guarantee owners under the Housing Development Act (HDA) against any defects for at least 18 months from the hand over date. This entitles the new owners to get the developer to rectify any defects such as bathroom leakages, cracks in the ceiling, loose tiles, etc. The developer's solicitors are required by law to retain back 5% of the purchase price for this purpose. Beware though- developers of commercial properties, service apartments and shop apartments are not subjected to any similar government regulations or are bound by any HDA rules. They need not provide a similar guarantee against defects or they can alter the terms in any guarantee provided to their liking.
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