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June was in search of a home when she first came back after 10 years overseas. She was super excited, scared at the same time because she was going to make the biggest decision of her life not to mention, spend the biggest amount of money ever in her life on that ONE decision ─ and she couldn’t wait to get started.
Not that she knew anything about property, let alone the process of buying it. Actually, she was clueless about what to do but knew that getting a house was what everybody did at some point in their lives, much like getting married or starting a family.
It was 2006. The internet wasn’t such a popular place at the time and there was no such thing as social media. So she scoured the newspapers and found some pamphlets and with a single phone call, found what she was looking for.
“I took a visit to the site just to see and the homes were almost completed. There were many units available, so I grabbed one without thinking too much,” she recalls. “I liked the houses immediately and I liked the newness of the neighbourhood.”
She didn’t ask too many questions about the developer, she didn’t think it mattered, and after plonking her deposit down and securing the housing loan, the deal was sealed.
In retrospect, June said she should have done some research on the developer’s background because she did hear stuff in the grapevine but she threw all caution to the wind because “I had found my dream home! It was just right for my budget and I couldn’t wait to get the keys.”
Eight months into moving in and subsidence began to show. Her kitchen walls started to crack from the ceiling all the way to the floor. Doors too started to jam and become unable to fit into their frames.
“I found out that the developer did not do the piling works during the structural stage and the floor sank. How can you not do piling? Over the years I spent close to RM50,000 on reconstruction and patchwork,” she huffed, “only to find that 200 others in my neighbourhood were also in the same boat.”
They filed legal suits. But it seemed like they had to get in line because there were plenty of others who were doing the same.
Bad news travels far and bad names travel even further, sometimes down the blackhole of history where it gets imprinted like a permanent stain in people’s memory. They say, “Oh, the house is by that developer ar? No thanks.”
Because of the implication of shoddy workmanship and other tales of horror such as possible collapse, made worse by the fact that there are newer and better-made properties nearby, June is unable to sell the house today.
“So, its current worth is only on paper,” she rues of its appreciated value (“Luckily it’s in a decent location”) but she’s stuck with a dud as “real money won’t be seen until I can actually sell it off”.
What’s in a name? Plenty. Especially when that name is the developer’s reputation. It is a factor that is almost always overlooked in the rush to make a buy. Don’t be blindsided by the pizazz of sales talk and glammed up show galleries. Do your homework first.
The developer’s reputation is of enormous importance because it not only reveals their history but also gives an indication if putting up your confidence, trust and money will be justified in the end.
By the same token, the converse is also true of a developer with good reputation as they are usually able to sell their homes without the need for extravagant sales ploys. They only need to – “Build them and they will come”.
Because most developers in Malaysia work on the ‘Sell Then Build’ principle where buyers are expected to put their hard earned savings on an Artist Impression, not only can the misfortune that happened to June in the above story happen to an unsuspecting buyer, there is also the very real risk of buying into a potential abandoned project.
It was reported in The Star Online in May this year that as many as “226 private housing development projects in Peninsular Malaysia were abandoned since 2009” affecting some 40,866 house buyers. It’s a worrying number. Although the government is doing all it can to revive 182 of these projects, these buyers have suffered for they have had to service their housing loans regardless.
According to the Consumer Association of Penang, there are many causes of abandoned housing projects. Not all are the developers’ fault of course but quite a few are attributed to them. The causes include:
- The developer having financial problems.
- The developer mismanaging the funds such as taking a deposit then keeping it or using it for another project.
- Construction comes to a halt midway.
- Buyers failing to get their titles from the bank that is funding the project because the developer refuses to settle his loan.
- The developer abandons a completed project which does not meet all specifications.
June’s story is an example of the last point. So before you ask to put a sticker on your chosen unit – Stop.
Ask yourself these all important questions:
- Who is the developer? Do they have a ‘name’?
- Do they have a track record of completed projects?
- Have they won awards? Awards are an indication of the quality of their past handiwork.
- What do people say about their properties? Put your ear to the ground.
- Do they have a good “after-sales” record?
- Have their properties shown appreciation over time?
Of course, having a good standing doesn’t guarantee the outcome but chances are, they will deliver as promised.
Looking for your property online? Here’s good news.
Because Google, as well as PropertyGuru have found that “90% of property buyers have moved online for their property search and research needs”. PropertyGuru New Launches has done some of this research for you.
PropertyGuru reviews has some of the most engaging reviews on the latest homes in the market. Need to dig into the developer’s reputation? No problem, just log on. It includes a long insight of the developer’s corporate background, track record and accolades.
Visit PropertyGuru to keep yourself updated on the latest launches, as well as to read unbiased property reviews of new projects.
