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> Paying cash for an undercon property, What should the buyer do?

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TSnookie188
post Mar 26 2016, 10:24 AM, updated 4y ago

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If a buyer decides to pay cash for an undercon property what should the buyer do
to ensure that the property will not face disclosure in the event the developer did not service
their bridging loan eventually?


wchinwai
post Mar 26 2016, 10:39 AM

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If dont want any risk, then better buy completed ones.
There is no guarantee if developer can finish the project.
lifebalance
post Mar 26 2016, 02:18 PM

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QUOTE(nookie188 @ Mar 26 2016, 10:24 AM)
If a buyer decides to pay cash for an undercon property what should the buyer do
to ensure that the property will not face disclosure in the event the developer did not service
their bridging loan eventually?
*
There is no guarantee a developer will fulfill their promise to complete the project, thus a undercon project is always a risk where the developer can bankrupt or close down.

If want no risk = buy a completed one
TSnookie188
post Mar 26 2016, 03:04 PM

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QUOTE(lifebalance @ Mar 26 2016, 02:18 PM)
There is no guarantee a developer will fulfill their promise to complete the project, thus a undercon project is always a risk where the developer can bankrupt or close down.

If want no risk = buy a completed one
*
I wanted a discussion on the issue I raised actually - not whether to buy a property undercon or completed - that is not the point
actually.
lifebalance
post Mar 26 2016, 03:08 PM

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QUOTE(nookie188 @ Mar 26 2016, 03:04 PM)
I wanted a discussion on the issue I raised actually - not whether to buy a property undercon or completed - that is not the point
actually.
*
You can arrange with the lawyer that you're paying the whole loan as cash, when the lawyer receive the instruction that the developer has completed a certain %, they will ask you to pay up the amount, any late payment of the demanded balance, the purchaser will be penalised based on certain %

This post has been edited by lifebalance: Mar 26 2016, 03:09 PM
cfa28
post Apr 4 2016, 05:18 PM

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TS, understand what you're trying to do. Buy property from Developer using CASH

FYI, if you do this, for sure, IRB will be paying you a visit very soon, cos the urban legend is that Developers must report CASH purchasers like you to the IRB.

But if you insist, like what life balance said, get a good Lawyer (it can be your SPA Lawyer) and tell the Lawyer to check all the documents for you before advisng you to pay. Tell the Lawyer, do the work as if the property is under financing, in this case, you're the Financier

You'll have to pay some fees for this.

Still, I advise you against this. Better to take an Overdraft Loan for this, some Banks do provide but at a higher interesr rate.

The field visit form IRB is no joke, as you know Gamen is in need of money due to low oil prices. Doctors at major private hospitals have been hit by field audits.

Can u explain where u got the case to buy the property.
cherroy
post Apr 5 2016, 08:08 AM

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Sorry to say, the existing law is not protective enough to property buyer, be it loan or cash buyer.

Just last week there is an article on thestar, which may serve a good read.
http://www.thestar.com.my/business/busines...se-buyers-trap/

So reputation of developer is one of most important factor to consider when purchasing a property.

Having said that, the recent amendment of needed strata title ready when deliver to buyer is a good start to close this loop hole.

This post has been edited by cherroy: Apr 5 2016, 08:10 AM
TSnookie188
post Apr 5 2016, 09:58 AM

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QUOTE(cherroy @ Apr 5 2016, 08:08 AM)
Sorry to say, the existing law is not protective enough to property buyer, be it loan or cash buyer.

Just last week there is an article on thestar, which may serve a good read.
http://www.thestar.com.my/business/busines...se-buyers-trap/

So reputation of developer is one of most important factor to consider when purchasing a property.

Having said that, the recent amendment of needed strata title ready when deliver to buyer is a good start to close this loop hole.
*
yes it was this article that prompt me to open up this discussion though somehow many assumptions were made in the meantime about the cons of buying cash..as we know there are buyers in the market that do pay cash for their
purchases so what can they do to protect themselves - that was my general question actually..

agree buying a reputable developer is important not only when you are paying it outright but for other good reasons as well..

would a good developer provide a letter to the cash paying buyer that the property will be delivered with no lien?
or is this already covered under the spa?


cherroy
post Apr 5 2016, 10:53 AM

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QUOTE(nookie188 @ Apr 5 2016, 09:58 AM)
yes it was this article that prompt me to open up this discussion though somehow many assumptions were made in the meantime about the cons of buying cash..as we know there are buyers in the market that do pay cash for their
purchases so what can they do to protect themselves - that was my general question actually..

agree buying a reputable developer is important not only when you are paying it outright but for other good reasons as well..

would a good developer provide a letter to the cash paying buyer that the property will be delivered with no lien?
or is this already covered under the spa?
*
The fear is always the company bankrupt or liquidated, by then whatever letter/agreement signed also no use already.

Reputable developer want to sell its next phase of property, they don't want something hanky panky in between that could jeopardise their reputation and future property sale and potential premium buyer willing to pay.

Newer SPA should cover this area already as there is new law stated that strata title must be delivered when VP time.

TSnookie188
post Apr 5 2016, 12:51 PM

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QUOTE(cherroy @ Apr 5 2016, 10:53 AM)
The fear is always the company bankrupt or liquidated, by then whatever letter/agreement signed also no use already.

Reputable developer want to sell its next phase of property, they don't want something hanky panky in between that could jeopardise their reputation and future property sale and potential premium buyer willing to pay.

Newer SPA should cover this area already as there is new law stated that strata title must be delivered when VP time.
*
do you know when did this ruling that strata title to be delivered upon VP came into effect?
cherroy
post Apr 5 2016, 01:56 PM

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QUOTE(nookie188 @ Apr 5 2016, 12:51 PM)
do you know when did this ruling that strata title to be delivered upon VP came into effect?
*
Should be this year.

TSnookie188
post Apr 5 2016, 02:05 PM

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QUOTE(cherroy @ Apr 5 2016, 01:56 PM)
Should be this year.
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thanks ...personally I feel that the enforcement of regulations is rather lax in this country so
not sure really how this will pan out in the end
hhho
post Apr 5 2016, 03:49 PM

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QUOTE(nookie188 @ Apr 5 2016, 02:05 PM)
thanks ...personally I feel that the enforcement of regulations is rather lax in this country so
not sure really how this will pan out in the end
*
It stated in my s&p agreement signed with developer in Feb 2014 see attached file


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