Purchased in the open market, from the previous owner.
When purchasing, it is important to verify that the seller is the legal owner of the propertyYou can obtain all relevant information on the property by conducting a search on the property at the relevant land office and get confirmation of the registered owner and as to whether the said property has any encumbrances. By investing in a sub-sale property, investors know what they are actually getting for the money they paid.
Here are some pros and cons you need to look out for before you decide to buy a sub-sale property.
a. What you see is what you get
• Get a real feel of the property you’re purchasing. Every single detail is laid out for you to see; finishing, view, units, etc.
b. Financial Freedom
• Real figures like rental are readily available, and when you buy sub-sale, you can rent it out immediately. Furthermore, tenancy contracts are commonly for a year!
c. No risk of delays
• The property is already there for you to move-in once all legal paperwork is done. No delays on construction deadlines and no missing developers with abandoned projects.
a. Fewer Potential Properties
• There’s more work involved looking in this category, from viewing a range of individual units in various conditions, market valuations and rentals, negotiation.
b. Seller Hazards
• Within the period of time of discussion to settling the deal, the seller could change his/her mind on the price or even not sell at all!
c. Buyer Hazards
• Cheap really doesn’t mean good. If the seller is too keen to get rid of the property that he is willing to slash prices to get rid of it, then you should approach with caution.
3. Other Considerations
a. High cash outlay in the initial stage: If you purchase a sub-sale property, you will probably need to spend more cash upfront as you will have more things to cover at the initial stage:
• Loan application processing fee
• MRTA and fire insurance (if you take up a housing loan)
• Valuation fees and costs
• Stamp duties
• Legal fees and costs
• Utilities deposit (Electric & Water)
• 10% initial deposit