Before signing a property deal, I’d literally be vibrating. From worry, coffee, and sleepless nights scanning MoneySmart. I’m not one of the cool customers who will simply whip out a pen and sign, and thank god for that. Because people who aren’t shaking when they sign a property deal aren’t paying enough attention. This article from H88 points out what buyers should be looking out for:
Be Careful When Sealing Your Property Deal
The Sunday Times has come up with a couple of case studies that show how some properties deals fall through and buyer comes up worse for wear.
The first case involves a buyer forking out too much for the option to purchase. Worse yet, the seller was found to be in debt and the condo management could not transfer the unit to the new buyers because of the previous debt arrears. The agent also walked off with the commission.
The second case was a matter of bidding. The potential buyers had offered an amount for a condo unit but was later out-bidded by another buyer. The potential buyers were irate when they found out that they weren’t notified about the second offer as they were willing to up their bid. This remains a grey area as the agent technically does not need to let the buyers know of the higher offers.
The final case involves owners who are desperate for cash. They will be willing to sell a unit at a lower price if the buyer pays a larger amount in cash. The danger of this sale is that the original home owner may have a debt that is larger than the new selling price. When this occurs and the original owner cannot pay up the debt arrears, the unit cannot be sold. This can be prevented by doing a background check on the original loan and the owner.
A MoneySmart Response
As a rule of thumb, you should check the details of the last owner. Resale property usually has a history; there’s a reason why the previous owners have chosen to move out, and it’s not always financial either! Always make an effort to do background checks. Don’t assume agents are as informed as they appear.
Got concerns about your property deal? Comment and let us know!
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