he Malaysia government sell-then-build, the house buyer
recently approved the part finance the developer in the
concept of build-then-sell construction of the project and
for housing development project. the financial institution
The build-then-sell concept is basically lend the money to the
essentially a 10:90 concept individual purchasers.
whereby the house purchaser pay
10% of the purchase price first In the build-then-sell concept,
and then pay the remaining 90% of the developers will not get to be
the purchase price upon the financed by the purchasers like
completion of the house with in the case of sell-then-build
certificate of fitness issued. and therefore the developers will
have to obtain more financing
The conventional sell-then-build from the financial institution to
require the purchaser to pay 10% finance the project up to the
of the purchase price upon the stage of completion.
signing of the sale & purchase
agreement and the remaining 90% In order for the build-then-sell
is progressively paid to the concept to work, the bank will
developer in accordance with term have to play a major role by
of payment according to stages of providing the additional
construction as stipulated in the financing up to the stage of
sale & purchase agreement. The completion and this will
developers are required to adopt inevitably increase the risk
the term of payment approved by exposure of the financial
the housing ministry for the institution. The bank normally
remaining 90% of the purchase will prefer to lend to individual
price. The house purchaser can purchasers in many smaller
pay the developer by cash or bank parcels instead of lending it all
loan. In essence, in the to the developer in one parcel.
the new build-then-sell way.
Hence, for those companies that
has just started to venture into Fortunately the two concept will
the property development field be allowed to run parallel
where they do not have the otherwise many aspiring up-start
necessary track record, it will developers will not be able to
be rather difficult for them to kick start their project.
convince the bank to provide them
with the financing to do it in
About the Author:
Mr BT Khoo is the webmaster of http://malaysiaproperty.blogspot.com
Read more articles by:
Khoo BT
Article Source: www.iSnare.com 
