As predicted by many financial economist, Malaysia economy in year 2016 will be facing lots of challenges and even our Budget 2016 had revised to adapt the current slow economy. With that being said, our property market cannot run away from the slow downturn.
However, some people look at this moment as an opportunity to purchase a lower price property. When supply of property higher than demand, it is a buyer market. Things will be much easier to negotiate with seller.
Even though, there are so many properties out there up to grab, you do not want to get the wrong type of property. As these properties might have least favorable within banks and will definitely affect the future market value.
So, we have list down the least favourable property by the bank here and let’s check it out.
3 Types Of Property To Be Avoided In 2016:
Property under master title for a long time.
It is not a new thing in bank’s policy that most banks reluctant to provide financing for property under master title for more than 10 years.
The reason simply because property without strata title and individual title cause bank less secure about their lending.
Simply, if you have RM100 to lend out, would you lend out to a secure and lower risk property or with a higher risk property? Of course, secure and lower risk property.
Property with master title for such a long time normally related to inefficient or a bankrupt developer.
If by chance you own such property, you might want to push your developer hard to get those strata/individual title out.
More and more banks stop financing such property, your property will have difficulty to get refinance or even selling out. When buyer cannot get any housing loan financing from bank, they will not want to buy your property.
Property near negative factors
Property near negative factors tend to drop in value or difficult to be market/auction again. Therefore, most banks try to avoid such property or provide lower housing loan financing to such properties.
So, what is negative factors property?
Property that actually near to oxidation pond, electrical tower, landslide, flood …etc
Auction property can be tempting to buy because of the lower purchase price. However, many hidden fees and procedure was not transparent enough for new buyer.
Hidden fees like the existing overdue electricity bill, water bill, quite rent, assessment bill, maintenance bill… will be bear by new buyer. The total amount can be huge when defaulted for couple of months or even years.
Buying an auction property can be stressful because buyer and buyer’s financier require to comply with 120 days full disbursement.
For example, leasehold with title property, the consent alone takes 120 days. And it is not a reasonable timeframe to fulfill such requirement.
If you happen to purchase an auction property, the best things are to apply the home loan with the same auction bank. This will speed up the process.
Instead of looking out for the next big chance, you’d be better served to use the next few weeks to get your head right, assess your current financial situation, and set some positive goals for property investing in 2016.