As I’m truly grateful for being in a position to receive lots of emails every week, it breaks my heart when I got to know some of the mistakes done by first timers that could totally be avoided with knowledge. To prevent these mistakes from happening again, I thought it would be helpful to list them here:
Buying sick projects that goes bankrupt halfway through construction
We actually forgot how dangerous it could be to buy new projects (aka off plan projects) after our government implemented Housing Development Act which protects first time home buyers. However, there are still buyers who continue to serve loan although their ‘house’ only consist of columns and beams without anything else. Therefore before deciding to buy, these are steps to go through:
a) Check the black listed developer list online, as well for ‘project sakit’ which means the developer’s construction progress is late in comparison to the schedule.
b) Check SSM for non public listed development companies
c) Ask for past projects or developments
d) When the deal is too good to be true, most probably it is…
Signing the SPA before securing a bank loan
I get sick when I hear stories about salesperson tricking young buyers into signing the Sales and Purchase agreement before securing a bank loan. Their usual explanation is ‘this is the market norm in Malaysia’.
I understand that in this tough market, sales targets are difficult to meet and don’t get me wrong. I’m cool with the extra 1% discount if you sign within 30 days of booking where it’s the decision of the buyers to take it or not. But misleading buyers to believe that the Sales & Purchase agreement can be cancelled if the buyers fail to get loan is totally unethical.
In my 4 steps guide to property ownership, step 2 is to often check your credibility score. Which also means how much loan you’re eligible to get? This information can strongly guide your property hunting process and decision making skills when you come across irresistible deals.
Buy property with your girlfriend or boyfriend
When you’re deeply in love, people tend to do some pretty crazy things which including getting a property together. The problem only occurs when the relationship didn’t work out and what’s going to happen to the investment?
Imagine this, you paid majority share of the downpayment, gotten a shared loan but you pay the installment every month so far, and you cannot sell as the property is still under construction… Now your ex refuses to share or pay the amount he/she committed initially because you’re no longer THE ONE. It’s impossible to even have a normal conversation as everything you say is now irrelevant.
There’s no law to guide ‘feelings’ or ’emotions’ towards crafting the best solution for these scenarios. If you’re really deeply in love and you think that both of you are ready, please consider a pet instead.
Buying property that you cannot afford
“Buy first lah, your salary will increase when it’s completed and you will get promoted wan mah!!’ ” Why settle for one when you can get 3 properties?” “Buy property no need money wan, get money back lagi!!”
As common as it sound, there are just creative deals around the market where an average joe can afford several properties and have a few hundred thousand in their bank account… CASH!!
In my opinion, there’s nothing wrong with the strategy of leveraging on the current financial blindside but the player is just not experienced or disciplined enough to manage the cash-backs. With such a huge amount of cash in a sudden, many will splurge on dumb shit such as holidays, cars, watches, and etc.
In a glance, the cash that was supposed to be used for chipping in the difference between your rental and installment is no longer available and your nightmare starts then. How can you possibly serve installments for 3 properties worth RM 1mil each with your RM 5000 monthly salary?
In conclusion, we only end up in deep trouble when we are trying to cut corners. As lame as it sounds, the only solution to these mistakes is to have knowledge and patience. There’s no need to rush into getting a property just to impress your parents or friends. Instead, rush in getting information and the relevant knowledge.
Hope this article came helpful=)
realestateguy 