Once you have decided on the type of house you want, there is always the question of whether it is better to buy a house under construction or one that has been completed or occupied. The following are a few basic factors to help you decide:
Pricing
It is not surprising to find that some new housing projects are priced higher than existing residential properties in the area. Developers could attribute the high price to inflation, rise in material costs, increased land cost and other factors.
To get the best deal, compare the prices for various residential properties available in the same area. You might want to take into account the size of each unit to get the best value for each ringgit you pay.
Financing
As part of the package, developers of new housing projects usually appoint panel banks to secure financing for their buyers. However, if you are purchasing an existing house, you would need to source for bank loan on your own. This process is time consuming and can be frustrating at times.
In addition, the valuation process is usually not required for new properties as the banks have accepted the valuation based on the developer’s pricing. This means that there is no need to enter into negotiations for the price of the property which could save you more time and effort.
Waiting Period
In Malaysia, it takes at least 24 months to complete a new housing project. During this waiting period, you will have to make progress payments for the project. If you do not already own a house, you would need to rent a place to stay while your new house is being completed. At the end of the day, these payments to hold down the property could amount to quite a large sum.
If you opt to buy an existing house, you can cut your waiting period down considerably. After settling the legal procedures, you might want to spend a little time to renovate the house. Otherwise, you can pretty much move in the day the key is handed over to you.
Risk of Abandoned Projects or Delays
With new housing developments, the risk of the projects being abandoned or delayed is always present. When a project is delayed, your money is still locked in but you can’t move into your new home as you have planned. This is a stressful situation.
A developer abandoning a housing project is the worst nightmare for a house buyer. Your dreams of owning a house is dashed. Hence, some people would rather choose to buy an existing property to save themselves from potential headache and heartache.
Renovation or Repairs
Many people like buying a new house because they know everything in the unit is brand new. This gives buyers total peace of mind. With new houses, you can also select the design you like and most likely do not need to spend much on renovation.
With an existing house which is at least a few years old, you never quite know what you are getting. There might be damages that the naked eye cannot see such as pipe leakages or wiring problems which need to be fixed. You might also want to change the design of the house which could incur a large sum for renovation. All these would amount to the additional cost of buying the house.
Pick the Best Option
Whether you opt for a new house or an existing one, it should fulfill your needs and situation. If you need to move in as soon as possible, then finding an existing house would make more sense. For those who can wait, they can scout around for the best deals from newly launched housing projects in the area of their choice.
The article was contributed by Agnes, freelance writer, PropertyGuru.