So how to reduce the risk when buying a house on paper?
- Be careful when viewing the model house: A detailed review of the model house will help the buyer identify the difference between the information on the house under the contract and the house being handed over.
- Project review: Buyers can ask for specific explanations and see accompanying legal documents such as project documents, land use right certificates, construction drawings design, permits construction, etc.
- Identify reputable investors: A reputable investor will always be transparent and public with project information.
- Bank guarantee: Businesses have many ways to receive assurances from the bank for the project. Especially large-scale enterprises with large capital flows guarantee their child projects. Therefore, the buyer needs to ask the seller for a specific explanation about how the bank guarantees to protect the interests when the project has a problem.
- If mortgaged, it must be disbursed: Enterprises can mortgage the project to borrow investment capital but must complete the release of the mortgage before entering into a purchase and sale contract. Buyers need to determine which bank the project is being mortgaged at, what the collateral includes, how long the mortgage term is, and whether the mortgage release is possible.
- Right to negotiate the contract: Buyers should boldly negotiate the contract terms if they feel unsatisfied or unreasonable.
- Only pay according to regulations: The law stipulates that buyers only make the first payment of no more than 30% of the contract value when buying a house on paper. Subsequent payments must be by the construction progress, but the total must not exceed 70% of the contract value if the house has not been handed over.
- Claiming benefits when handing over the house is delayed: Handing the house on time is the investor’s obligation. Therefore, before buying a house, customers should note the late handover clause, and when an incident occurs, they must immediately claim compensation.
Buyers can get high profits when investing in the house on paper. However, it also brings buyers many risks. Therefore, most real estate investors rarely expand their investment in other areas and provinces, partly because it is difficult to supervise, limited capital, and difficult to survey the market.
If investors feel not confident with their capital, want to diversify their investments, or need the support of a reputable asset management company, investors can invest in digital real estate investment on #GIGExchange. This exchange will be expected from the second quarter of 2022.
GIGEX is part of the GIG Capital ecosystem. It is a blockchain application technology project to provide solutions to digitize & trade real assets such as Real estate, corporate shares, service vouchers, fixed investment. This project uses blockchain and the financial market to transmit value more effectively.
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