Property ownership is subjective as it’s truly to each person’s own, and how they decide to make the best out of what they have. Therefore, you have to understand the Pros & Cons about purchase a sub-sales property or brand new property.

Pros & Cons – Subsale Property



Advantanges

  • Location & environment
    Able to see and get a feel of what the property and what its neighbourhood is like, as you can physically visit the place and observe the environment.

  • Usually subsales property situated in a matured and centralised location

  • Mature community
    The neighbourhood is well-established and you can do thorough checks on the amenities or facilities nearby

  • Physically view the unit. View the property as it is and buy it as it is.  Get one that has it or renovate it!

  • Get the to know the actual unit and no hidden “T&C” with inspect immediately for any wear and tear on the house, especially if it’s been around for years.

  • Know your neighbours who stay left and right, front and back,  before you make a decision to purchase the unit

  • If the location is already very matured and has no more room for new developments, you can rest assured that there won’t be any new properties springing up that’ll affect your way of living.
  • You can get the ownership of the property earlier compare the new property. For normal transaction without consent, usually take about 90 days after sign and stamped SPA, you can obtain the ownership.

Disadvantages

  • Information about the property may be hard to obtain if the property is quite old. Hence, you’ll need to enlist a really good agent to help you research and/or dig.

  • Only particular units or locations are available

  • If the property a bit run-down and you require put on additional cost for the renovation, etc.

  • If you move in and after a few months you find something faulty, you cannot charge the previous owners for repairs.

Pros & Cons – New Project From Developer

Advantanges

  • You can easily to get the information and specification about the project and show unit is available for viewing.

  • May have an attractive package for the purchase, eg special rebates or discounts/offers to encourage home buyers to place deposit. For example legal fees borne by developer, stamp duty exemption, minimal downpayment, etc.  You can refer more for Home Ownership Campaign 2020 (HOC) projects.

  • You can get an attractive prices with low down payment compared to current market prices.

  • Brand new unit and never-used-before facilities that are in good condition.

  • Flexibility for your choice a unit which can match your preference in the unit type, facing which direction, which floor plan, etc.

  • Modern and unique design that can’t be replicated.

  • 18 months defect liability period where the developer must fix any issues related to the home’s built.

Disadvantages

  • Long waiting time until the home is completed.
    For high rise property (under schedule H) usually take at least 36 months to complete, whereas for landed property (under schedule G) take about 24 months.

  • May run the risk of the construction of the building delayed due to external/internal issues or worse, the project being abandoned!

  • It’s totally new community and you will not know who is your neighbours until you move in.

  • New or different projects may be built in the vicinity that are not in the township’s planning.

  • For flipping purposes you might facing difficulty to resell the property if the property is still under construction and you may also experience negative cash flow.

Upfront Cost Involved

Subsales Property

  • Downpayment of 10%
  • SPA & Loan agreements for legal fees
  • SPA & Loan agreements for Memorandum of Transfer MOT (Exemption for 1st time buyer for property price below RM500K)
  • Property agent’s fee
  • Bank valuation fees
  • Miscellaneous cost – MLTA/ MRTA, fire insurance, etc
  • Repair / renovation cost

New Project

  • Downpayment of 10% or lesser – in certain projects, the developer will have a special rebate that requires less than the 10%
  • SPA & Loan agreement for legal fees
  • SPA & Loan agreement for Memorandum of Transfer MOT
  • Miscellaneous charges – MLTA/ MRTA , fire insurance

Due to the COVID-19 pandemic and the subsequent Movement Control Order (MCO),, the Prime Minister introduced the Short-Term Economic Recovery Plan (PENJANA) during his speech on 5th June 2020, reintroduce HOC 2020 scheme meant to advantage home buyers everywhere.

The HOC 2020 this time around carries the same set of benefits as previously, notably:

  1. Stamp duty exemption on the instruments of transfer and loan agreement for the purchase of residential homes priced between RM300,000 to RM2.5 million (subject to at least 10% discount provided by the developer).
  2. The exemption on the instrument of transfer is limited to the first RM1 million of the property price, while full stamp duty exemption is given on loan agreement effective for Sales and Purchase Agreements (SPA) signed between 1st June 2020 to 31st May 2021.
  3.  10%  house discount

Before that, you must your budget and requirements.

If you’re looking for property for your own stay and use, a brand new property is good for peace of mind (in the first few years, anyway) and there are great rebates to encourage home ownership. Furthermore, with the Home Ownership Campaign 2020 (HOC), 10% rebate and exemption on MOT will help you to save cost and reduce your upfront cost burden.

Nevertheless, if the new home you’re looking for is situated out of the way, a subsale property is a better choice as it’s located in a strategic and mature location.

As for investment purposes, new properties are appealing for their modern aesthetics, although there’s the risk of the project being abandoned or not completed on time.

Whereas subsale properties  you can immediately rent out once the ownership is transferred.

Now that you have a rough understanding of what you’re getting into when you purchase a subsale or brand new home, you can now start planning your budget accordingly.

Anyhow,  your credit score is essential as it will determine whether you can successfully to own a house or not. Plan now and get your credit score as healthy as can be, so your home loan application has a higher chance of approval!