Evaluating Sub-Sale & Under-Construction Properties - Ini Adalah Bellarina Natasya | Bella Jamal Evaluating Sub-Sale & Under-Construction Properties


Evaluating Sub-Sale & Under-Construction Properties

It can be a terrifying and daunting experience when it comes to buying a house in Malaysia, especially for first time buyers. Whether you are buying a property for investment purpose or for own stay, buying a property requires a lot of research and preparation. One of the most frequent questions that property buyers ask is whether to buy a property that is still under construction or to buy a sub sale property. This article will help you to evaluate whether you should buy a sub sale property or a property that is still under construction.

Here are some considerations that you should consider when it comes to deciding which property to buy:

Property that is still under construction
The sell and build concept where developer sells the property before the starting of construction work has been quite popular in the property market in Malaysia. Property buyers will hope they get the best, if not perfect unit when they buy a unit from the developer. As for property investor, they will hope for the best in order to achieve an appreciation in terms of value for the property once it is completed. Properties that are still under construction or has yet to start the construction are popular among those home buyers as they get to bring home some freebies and discounts offered by the property developers.

1.Value appreciation
As you will be buying the property first hand, that also means you will be buying it at a cheaper price. Once the property is done, the value will naturally appreciate.
2. Easy access to information
As it is still under construction, you can easily get the information of the property from the developer. Just go to their showroom or office and you can obtain as much information as you like.
3. Blank canvas
You will be the first owner for the unit after the property is done. That being said, you get to enjoy everything from the fittings to the kitchen stoves at their best conditions.
4. Discount
Properties that are still under construction usually come with a discount such as early bird discount, national day discount, valentine’s day discount or VVIP discount. This is because the developer would like to sell out the units as soon as they can.
5. Able to choose
You get to choose a unit that you like as long as you start your planning early. 
6. Warranty
Properties that are still under construction usually come with a warranty, with a standard period of 18 months defect liability. This warranty allows the developer to repair any defects such as crasks or bathroom leakage.

1.More risk
With cheaper price it will also come with a higher risk. That being said, the quality of the property is not guaranteed. Therefore, it is important to choose a reputable developers when it comes to buying a property
2.Financially restricted until completed
Buying a property that is still under construction will also mean you are getting your money locked as you will still need to wait for another 3 to 4 years until the property is completed. During the 3 to 4 years period, your money with your bank is locked therefore, buying another property will be challenging.
3. Final product uncertainties
As the property is still under construction, you will not know how the property will turn out in the end.
4. Patience
In a case where there is any defects in the unit, the developer might take some time to repair on the defects. And there is nothing you can do but to be patient about it. 

Other than the listed pros and cons, there are some things that you should take into consideration as well. First of all, you need to bear in mind that you might not be getting what you have seen initially. Ask the sales agents on what you would be getting upon buying the property, whether the unit comes fully furnished with air conditioners, lightings and furniture, or unfurnished.

You would also need to make a calculation of the costs that you will need to spend when you decide to buy a property, such as:
  • Initial deposit of 10% the property price 
  • Processing fee for loan application 
  • Insurance (Mortgage Reducing Term Assurance (MRTA) & fire insurance) 
  • Stamp duties 
  • Legal fees 
  • Utilities deposit

Sub sale properties
Sub-sale properties are properties that can be bought in the open market from the previous house owner. There are some important things to take note of when it comes to buying sub-sale property. First of all, you should ensure the owner of the property is a legal owner of that property that you are interested in. You can verify this information by searching the property at the land office and you get the confirmation of the owner. You should also check with the owner on whether the property has any impediment. Since it is a sub sale property, you should know what you are getting for the money that you have paid.

Below are the list down of the pros and cons of getting a sub sale property.

1.You get what you see
Since the property is already completed, you will be getting what you see, ranging from the condition of the house, the view from your house, the facilities or even your neighbour.
2.Instant cash flow
You will be able to get instant cash flow if you buy a sub sale property as you ca n rent the property out as soon as possible and collect rental from it. You night even get an existing tenant from previous owner if you are lucky.
3.No construction delays
Since the property is no longer under construction, you will not have to deal with possible delay, developers missing or project abandonment. 
4. Move in fast
It will take approximately 2 months to get the legal paperwork done once you have locked down a property. After that, you can move in anytime you like.

1. Difficulties looking for the right properties
The process of finding the right property can be tedios. You will need to spend a lot of your time arranging for unit viewing to check for the condition of the place and also negotiation with the owner.
2. Seller harzard
Some sellers may change their minds or increase the price of the property at the very last minute. You will then have to pay the extra with your own money.
3.Buyer hazards
Be cautious when the seller is selling the property at a cheap price or being overly keen on getting rid of the property. You will definitely not want to deal with cases of crime such as murder cases in the past.

Other than the above, there are other things that you should take into consideration before deciding. Bear in mind that you will need to spend more on upfront payment as there are many things that you need to spend on in the initial stage, such as:

  • Processing fee for loan application 
  • Insurance (MRTA & fire insurance) 
  • Valuation costs and fees 
  • Stamp duties 
  • Legal fees 
  • Utilities deposits 
  • Initial deposit of 10% 
  • Renovation and repairing costs 

In conclusion, regardless of which property you choose in the end, it is essential for you to do your research and plan your budget. You could also follow this simple guide and it will save you from many unnecessary hassles. After all, this is a huge commitment that involves a big sum of money.

*Credited to Aman Ismail for other pictures
*Picture without watermark are from google

Bella Jamal

Hi! Bella Jamal is a part-time blog writer of Ini Adalah Bellarina Natasya. A long time ago graduated from the National University of Malaysia with a degree in Bachelor of Chemistry, now working as a Social Media Professional for Telco company. For any opportunities, can contact me at jbella8868@gmail.com

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