8 Consideration when deciding on New Home vs Sub Sale
The first consideration when purchasing a house is whether to attain a new or sub sale property. What are the differences you might wonder.
A new home is where you are the first legal owner of the said property, while a sub- sale home is a property that is owned in the past.
Image : Majalah Labur
A new home is typically purchased directly from a property developer or it’s agent while sub-sale homes are purchased from the existing property owner, be it an individual or a company.
Both options have their respective pro’s and con’s so we’ve decided to share the following considerations for you to decide on one of the biggest purchases of your lifetime.
Considerations for New Homes & Sub Sale Property
1. Developer Track Record & Background
Image : Majalah Labur
Home buyers should personally research and look into the track records of the developers. A reputable developer will have a flawless track record all year.
They will work hard to maintain this reputation and consistently produce quality housing within their stipulated deadlines.
2. Location, Neighbourhood & Upcoming Developments
Image : KLIA2
When buying a new home, buyers are usually left without the knowledge of upcoming developments that may pop up around the area they are interested in.
You will notice that vacant properties rarely have tell tales on the future developments in store for them. This is seldom the case with sub sale property as these homes usually come with an existing neighbourhood with matured developments.
3. Potential for Capital & Value Increase
Image : Propertyguru
Generally, home properties experience a spike in value during its construction. Reason for this is that many investors procure these properties with the intention of selling them in the market later with a profitable price tag.
This results in the inflated prices from the initial market price. The profit margins for these can range anywhere between 20% to 30% from the time of finished production to passing of the house keys to the buyer.
However, investors should also take heed of certain market changes such as a drop in property value. On the other hand, sub sale properties usually experience a slower and more progressive growth.
After the typical fluctuation in price after the initial completion, the remainder of growth for property value happens over a slower pace.
Hence, it is critical that investors take note of these factors before making such investments.
4. (Personally) Assess the Value of the property
New homes are usually coupled with plenty of add-ons from the developers to attract new buyers.
They are wise to cater to the surrounding needs and wants of the buyers by providing multi faceted amenities, conveniences with sleek customized interior designs align with the latest trends.
All of these items contribute to the value (and increase in price tag!) of the said homes.
Sub sale properties don’t always receive the same amount of focus as they usually possess more matured conveniences and amenities. Hence, not as many add ons are offered to the buyers in this sector.
Older homes tend to have less facilities within the common area or the residential area as compared to new homes.
5. Repairs & Renovation
Image : Vocket
Sub sale buyers may have to prepare to be faced with a house that requires a critical makeover. This is an important consideration in your estimation of costs as the repairs may add up to a significant amount on your end.
As with all older properties, there may be rusty pipes or bad wiring that require repairs and maintenance. Don’t forget to account for any renovations you might have planned.
However, some sub sale buyers are fortunate enough to attain homes that are semi furnished or come with existing facilities.
The flip side is true for new home buyers as may acquire the keys to a bare and empty house without any existing furnishing.
Always take note of these aspects as they contribute to the eventual cost of living for you.
6. Budget & Cost
When home buyers buy from developers, the buyers usually get a higher margin for loans. Developers are also getting better at offering packages and schemes targeted at the buyers convenience.
Some developers even offer packages where all the additional costs such as legal fees and stamp duties are included within their price tag. These economies of scale efforts indirectly result in reduced costs for the buyers.
An example of a best case scenario is when a buyer acquires a 90% loan, they may potentially get their money back. Cases of Bumiputera discounts also allow for allocation of funds for renovation purposes and etc.
It will be unlikely to chance upon deposit rebates for sub-sale homes. Sub sale buyers need to be able to pay 10% of costs upfront. Also, be prepared to fork out some money for the necessary legal document fees.
7. “Buying Off” Plan
When buying a new home, you can drop by the sales gallery, view the showrooms or show house and ask relevant questions.
Buyers need to be reminded that these showrooms are designed in great detail by professionals with the aim to create a premium and exclusive impression to those that walk in.
The actual home may not be the same as the showroom you took the selfie in. We won’t even get into the filter applied in the process.
This is different when viewing the sub sale property you are interested in because you will be viewing the actual premises of your prospective purchase.
8. Price Negotiation
Image : Giphy
The price for new homes are usually determined by the developers. Consequently, there is little to no room for negotiation of prices. At most, there will be temporary promotions or discount offers for Bumiputera buyers.
These discounts do help reduce the cost of the homes. Beyond that, it is quite impossible to have any kind of viable negotiation process.
The grass is greener on the sub sale market as the price is determined by the home owner based on their assessment of the market prices. This leaves for more room and space for negotiation.
That wraps up our list of 8 considerations when deciding between sub sale or new homes. Never get caught up in the hype of new or sub sale homes.
It really depends on the specific need of you and your home. We wish you all the best in your finding the best home for you.