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Top 10 Important Tips Before Buying From Developer

Top 10 Important tips before you buy a new project from a developer

What you should know before buying a new project?

(If you prefer to read chinese language please click here.)

Buying a house is not only a dream but also a big investment if you’re doing this for the first time. We’ve heard uncountable stories like bankrupt developers, unscrupulous developers and etc. Want to minimize the chances of fraud? Find out 10 important pitfalls homebuyers should avoid before buying a house from a property developers / builders.


If you are buying a property for the first time and it is a new project, with a little preparation and with my article, hopefully you’ll feel awaken. Before you start looking for a home / property, there are a few things you should avoid. Let’s get slightly out of topic with just 3 paragraphs to share with you why a project will fail / may be abandoned. 

Three main reasons why a project may be abandoned. 

First, inexperienced developers who are unable to complete the projects they have taken on due to difficult conditions than they have planned for or worse, over-promised. In another word, they might not have raised enough capital to complete such a big project.

Second, the developer may have good intentions but poor business acumen and financial management. They may suffer from poor design, planning, or marketing strategy as well as mismanagement and even fraud during the execution of their projects which leads to their bankruptcy.

Finally, the authorities entrusted with monitoring, implementing regulations just fail to do so properly, In short, Malaysia Boleh. However, the law has been tighten / improved from time to time while abandoned project is getting lesser as well compared to past decades.

10 Important Tips on How to avoid being cheated by property developers

Without a doubt buying a home is one of the most important financial decisions you’ll ever make in life. It’s not just about buying the right home at the right price and it’s about buying from the right party. To ensure that you have all the information you need to make a fair and informed decision, I’ve pulled together some tips by referring to some articles with some tweak and add in some of my personal opinion to help you avoid being cheated when buying property.

1. Check the property developers’ track record 

If you are thinking of purchasing a property from a developer, always check their track record.

“The one-stop centre that checks for you on the KPKT web platform is here for you 24 hours a day, 7 days a week. You can find out if the subsidiary property developers such as Initial Property Developers, circulation capital, wealth management, and other types are law-abiding, or whether they are being investigated by local government agencies, so you can make decisions with confidence.” (by iProperty)

Is it seems too complicated? No problem, ask your agent to check or show you the important details and developer’s past project. You can even verify with their panel lawyer as well but provided the lawyer is legal and actual firm but not another disguised firm.

What if the developer is a completely new developer in the market? Well, you need to look at the team or the management member and it is up to you to decide whether to proceed or not.

(“ha ? like that ah? How to make sure or guarantee the project won’t fail / abandoned?) Sorry to say no one can guarantee the project’s success just like no one can predict when the Covid-19 will end.

2. Check the agreement and verify documents credibility

Just check with your lawyer friend but please don’t simply check or ask for fun because we do not provide free services. Or else, you will have to pay greatly for mistakes! 

3. Is it a crazy deal? Beware of too good to be true promotions/offers

Beware of unsolicited calls, emails or any road show booth by the property developers that offer you a crazy deal. It could be fake developers setting up booth to collect your booking fund. Most of the times they will try to offer you very attractive promotions /offers that are too good to be true.

4. Opt for completed property rather than the ones under construction

If you’re really a skeptical person, don’t challenge yourself and the agents or developers, just go for a completed property. 

Good side? You get to see the quality / completed project, the building.

Bad side? If you choose this option, you’re expected to make a down payment. And also since you’re buying a completed property it also means that you’re purchasing at the end stage which limited unit / choices are available for you.

5. Visit the KPKT website to check if the developer is not blacklisted 

The Government has provided information on developers who have been blacklisted in the public domain. You can search for their names and details in the by keyword on the KPKT website.  This is a free search service provided by the Government of Malaysia to help consumers like you make an informed decision about the developers you are considering for your new home or apartment. (iProperty)

But to be honest I don’t think this is really a good move because it is super easy to establish a new company with new member or shareholder if a scammer is really planning to commit fraud. Thus, again, refer to your agents and lawyers to verify the developer’s credibility and their confidence on the project and developer too.

6. Appoint your conveyancing lawyer

Appointing your conveyancing lawyer will help you avoid being cheated by property developers. If you’re really worrying about it, have your own lawyer. If you ask me, is it worth it?

I would say no, as the developer already include / free the legal fees package for you but if you really have the extra money and want to have extra safety precaution, just go for it.

7. Check the property market value and property title

Remember to check if your desired property is a Freehold, Leasehold, Bumi Lot, or Malay Reserve Land (MLR) as it might affect your ownership or transfer of ownership should you want to sell it off to someone else in the future.

8. Beware of Guarantee Rental Return (GRR) scheme

Most investors will be stunned by the concept of the Guaranteed Rental Return (GRR) last few years but right now GRR is not really that “hot” anymore. Just ignore it and talk to few agents about their opinions toward certain projects to get more understanding about the pros and cons of certain GRR project, not all GRR is bad offer, if utilized wisely it is a good investment tactic

9. Dont forget to visit the site to verify the project / construction status

Remember to check if your desired property is a Freehold, Leasehold, Bumi Lot, or Malay Reserve Land (MLR) as it might affect your ownership or transfer of ownership should you want to sell it off to someone else in the future.

10. Do not listen 100% to your friend, agent & developers

Some people say this , some people say that.
My friend say this, my friend say that.
Future got shopping mall, future got this and that, hello, what happen in the future and past is not your business. 

Yes it is somehow important but use your judgement rather than listen 100% to those aunty uncle and over-promising agents & developers.

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Scott Seow

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