5 Reasons To Buy And Not To Buy A Subsale House
Owning a house has always been a dream to most of us and often regarded as an achievement in life let alone if it was done in our 20-s, we will always be applauded and congratulated upon.
Many would think it is nearly impossible to own a house in young age as the housing prices for new developments in this country are beyond what most of us earned every month.
Then, here comes the bigger picture. Who said owning a house can only be done with newly launched projects? People tend to overlook on subsale house or secondary market whereas this market provides aplenty of houses to be chosen from.
There are pros and cons in subsale house, and it depends on the potential buyer whether they can cope for what’s needed in the whole process or not. In this article, Property Insight reached out to Lim Boon Ping, the President of Malaysian Institute of Estate Agents (MIEA) to get his opinion on the pros of a subsale house and Dato KK Chua, a seasoned property investor to share his insights on the cons of a subsale house.
1 Lower price
Somehow, this point is subjective depending on the location, built-up area and the size of the house. But on the average, subsale house is usually sold at lower prices than new houses because the current condition of the house may contain few defects that require rectification works to be done. One of the perks of purchasing subsale house is the potential buyer has a privilege to negotiate prices with the present owner. Lim said, usually subsale house is 20 per cent to 30 per cent lower than new launches in the same locality
2 Lesser uncertainties
As the projects are completed, buyers get to know what kind of community living there, the condition of the management of the buildings, blocked or unblocked views from the completed units and so on. We should never compromise on security aspects, hence when buying subsale house, the potential bltlyers has the advantage to wander around and explore the location themselves before deciding to purchase the house or not This helps a lot in making wise decision as we can get first-hand experience on security aspect in the area.
3 Existing renovation
For a house buyer who want to skip the tedious process of handling renovation works, they can be thankful for the subsale market.
4 Matured neighbourhood
This is a huge advantage to any buyers who are too busy to explore a new township or areas on their own. Obviously, a renowned location like Taman Connaught in Cheras need no explanation as compared to Alam Perdana in Puncak Alam. People can simply relate the first as more vibrant and busy location with all amenities and facilities within dose vicinity while little is known about the latter because the location is still undergoing major developments. House buyers will still be able to own a home in matured neighbourhood with an affordable price.
5 Shorter waiting period
Three year, a lot can happen during stipulated time and not many are willing to wait that long before they can finally move into their dream house. As a solution, potential buyers would opt for subsale house as the waiting period is shorter than the project under construction. This is quite understandable given that buyers dorit want to burden themselves by paying double commitments namely rental and progressive payment, hence subsale house is the way to go!
As mentioned earlier, all the glitters are not gold, and that includes subsale house as well. Subsale house also has its own disadvantages and that is factual, you have to accept it whether you like or not.
1 Not a brand-new unit
Buyers have their own preferences and the trend among younger generations these days, they prefer to buy brand-new unit, probably because of modem design and better facilities that is equipped together with the house. Subsale house usually comes with an old-school façade but this is up to the buyer’s preference. The final say is always on the buyer’s side, so think and decide wisely.
2 More initial down-payments are needed
If you want to own a house, you must be prepared for the all the costs that bundled up together with it. Suffice to say, you must have money. For a house under construction, usually the developer involved is generous enough to provide the buyers with lots of incentives and rebates so that the process of owning a house is not too burdensome. But the scenario might be different when you choose to buy a subsale house. This segment requires the buyer to pay 10 per cent of down payment (and sometimes up to 30 per cent depending on their loan eligibility) followed by legal fees, agent fees (if they are using agent’s service), Sales and Purchase Agreement, stamp duty, just to name a few.
3 Refurbishment cost
Lim said, buyer may need to set aside extra money to repair the house if the building is very old or dilapidated. Here is the tricky part. If you are lucky, you can get a subsale house with a very good price, affordable and sometimes below market value but usually, the condition of the house needs major refurbishment which means, another round of splurging your hard-eamed money to make sure the house is comfortable enough for you to live in.
4 No warranty
Unlike new house, subsale house has no warranty. Meaning that, all defects found within the house need or must be bome by the buyer whenever the handover process is complete. However, buyers can still negotiate with former owner if they can get the rectification works done first before they let go of the house, just out of courtesy because it is always better to handover the house in good shape.
5 Stringent loan approval
Applying for housing loan can be quite challenging as most of the banks require detailed documentation on your affordability of paying back. For subsale house, the challenge goes doubled because the banks will be very selective on approving the loans and various aspects are being taken into consideration including the status of the house, specifically individual strata title or master title. If the house is still under master title, buyers won’t have many options because only selected banks are willing to entertain this process. And for houses under RM100,000, good luck in getting the loans!
If you have any suggestions on this article, please send to firstname.lastname@example.org.