Purchasing from Developers [Part 2]

Luxury home in MalaysiaPicking up from where part 1 left off at, here are more trade secrets you should know:

6. Ingenious Marketing Schemes
Some of the more commonly used methods by developers to attract buyers are:

a) 100% Financing - Upon making arrangements with a bank, buyers are given a 90% loan based on the SPA price and their financial standing. Once the loan is approved, the developer gives a rebate of 10% off the sales price. The only thing a buyer has to do is to put up a small initial deposit which is later refunded once the loan is approved.

b) Free Legal Fees - All legal fees are absorbed by the developer and the bank.

c) Free Stamp Duty & Disbursement Fees.

d) Service and Maintenance Charges - The first few years of these charges are absorbed by the developer.

e) Rental Guarantee - The developer provides this for the first few years at the discounted SPA price if buyers opt for the developer's leasing package.

f) Freebies - Some developers may give away freebies such as free air-conditioners, built-in wardrobes, kitchen cabinets, renovated toilets, etc.

7. Minimal Initial Deposit
You would only need to pay a total of 10% on signing of the SPA. If you have taken a 90% loan, the bank will release progressive payments to the developer as the construction progresses. During the period of construction, you only need to service the interest payments on the portion of loan that has been released. Depending on the type of loan, you can also opt to service the principal amount as well. Once the full loan sum is released by the bank, you are then required to start paying both the interest and principal.

If you are presently cash tight and expect your income to increase in the future, this may be an ideal financing arrangement for you.

8. Recently Engaged? Perfect!
Imagine being able to time your marriage date to coincide with the completion date of your dream home. If you are counting on property prices to rise within the next few years, buying from developers allows you to 'lock in' on current prices. Compare this with waiting a few years to buy an old house from the resale market at higher prices.

All you can do after signing the SPA is to hope and pray for the best however, if you are purchasing in the resale market, you will need to allocate at least a few months to hunt for good unit, negotiate earnestly with the seller, pay the high deposits, choose your solicitors to manage the transaction and banks to finance your purchase. On the other hand, buying a property off the leasing package offered by a developer is easy, hassle-free and relatively straight forward.

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