I recently introduced a friend who is a buyers' agent specialising in London. He acts in the interest of the buyer and hence charges a commission. I believe that he is doing Asian clients a huge favour by educating them about the perils of buying new builds off plan. In the interest of all who read my rant for the first time, I'll repeat my spiel again:
1. New builds in London are often built on brown field sites which are ex council blocks. It will often be situated in a council estate and crime rates could be very high. If your new build is on a converted old warehouse, that's fine and it's a plus. In Singapore, off plan projects are usually found in OCR or out of central regions, like Jurong, Tampines, woodlands. These areas are already over priced vs CCR areas.
2. New build projects are usually more dense than old projects. In London or Manhattan, new projects are often just a hundred units. In Singapore, it could be over a thousand, like D'Leedon. The new projects are often marketed to unsuspecting Asians and up to 70% of the project could be buy to let units. Imagine once you collect the keys and put it out for rent, up to 140 units are available for rent !! When you want to sell it, at any time over 20 similar units are for sale.
3. You don't even know the view you are getting from a glossy brochure! Worse, if you haven't even walked the ground, how do you know what you are actually facing when you look out??
4. The biggest reason you should generally not buy new builds is because of the 20-30% price premium despite all the disadvantages!!
Now this acquaintance of mine boasted that he has the big agents working for him all over the world to look out for good projects and he doesn't need to pay fees. But little does he know that these agents act for the vendor and not the buyer, so they will try to "stuff" him continuously with new projects or inferior one.
A buyers agent helps to look for hidden gems that are under valued. You can lock in a 10-20% gain sometimes just by employing his services. The commission of 2-3% that you pay him is worth it.
Remember, don't be a cheapskate and pay for advice. Often, the free advice are there costliest!!
