Sell then Build VS

Built then Sell

by

NUR SYAKIRA BINTI RAMLY

(2014745521)

Sell then Build (STB)

Buyer will sign the S&P agreement

Pay 10% of purchase price as deposit

Apply housing loan, bank act as a middle man

Wait for 24 months for the house to be completed and pay the bank interest

Buyer can enter to their house as long get the certificate of completion(CCC) with 1 year liability period.

April 13 2007- Former Prime Minister Datuk Seri Abdullah Ahmad Badawi announced a new system to improve the delivery of the housing and development sector by implementing the One-Stop Centre for Development Applications which also includes the "BUILD-THEN-SELL" system.

Built then Sell (BTS)

Buyer will buy the house and could see the end result such as the quality, the design and the surrounding area of the house.

The price according to the market. If the demand is high, then the price will increase However, the buyer will be satisfied even pay a higher price.

PROS AND CONS

ADVANTAGES

•Without the need for large cash reserves or the ability to secure bridging loan, many developers can enter the industry making the industry more competitive

•Developers can plan bigger and better projects without restriction of cash flow.

DISADVANTAGES

•Buyers bear the risk of projects not completed on time or abandoned and shoddy workmanship.

ADVANTAGES

•Buyers minimize the risk of uncompleted projects and poor workmanship

•Only the strong and reputable developers can adopt this scheme. The smaller ones will fall away

DISADVANTAGES

•Only few developers will high cash reserves are able to bear the high holding cost as they are not allowed to collect progressive payment until completion and delivery of houses.

•Lack of competition may lead to more power in the hands of developers rather than consumers.

•Supply will be restricted and prices will go up

•The infrastructure and social facilities may be compromised or undertaken on a smaller scale.

•Developers face higher financing cost (8%-10%) for bigger financing and most likely these cost will be passed to buyers in terms of higher prices.

STB BTS

PARTIAL BTS(10:90)

S&P agreement is signed before the construction start

Buyer pays certain

percentage as initial payment

Balance of the house's price will

be paid after completion with

CCC