Viewing without 10% downpayment ready? How interesting. 

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A real estate negotiator (REN) was ‘commenting’ on a buyer who she had just served. She indicated that the buyer should not view the unit because he (the buyer) does not have the 10 percent downpayment. What the buyer wanted was for the seller to agree to mark-up the pricing so that the bank will loan the buyer an extra 10 percent. In other words, the buyer wanted ZERO downpayment or 100 percent financing. The REN said that this was wasting everyone’s time and the seller may not even agree to such a thing. Let’s not comment on whether this could be done or not, please do ask your friendly neighourhood real estate negotiator okay. 🙂   If you are buyer today, should you view a property when you have not even saved for the downpayment of 10 percent? Do remember that downpayment is just the start. A buyer would still have to pay stamp duty too. Here’s an earlier article: You also have to pay for stamp duty too, okay?

First of all, apologies, as someone who hope that the whole property market remain robust for a very long time, I do not wish that the property market is full of people who are taking 100 percent financing for their home. So, it is NOT okay to buy a property without any downpayment or think of ways not to pay any downpayment. I was just explaining to my team the other day. Imagine if banks are ‘persuaded’ to lend 100 percent instead of the current 70-90 percent financing for homes. What happens as soon as property prices drop 10 percent? Assuming the buyers are still paying on time, the banks should be just fine. However, as soon as any of them defaulted and the banks are forced to auction off the property in the market at 10 percent or more below the market, the banks would have to suffer losses. Soon, the banks would stop lending the the whole market becomes even worse because demand slows and desperate sellers grow. Please read about the 2008 Mortgage Crisis again yeah…

As for whether it is okay or not to view any potential units without having saved any downpayment, the answer is yes. I mean, why not? Sometimes after viewing, it may encourage the potential buyer to save faster? As for the real estate negotiator, let’s be professional. Just because you dislike that particular potential buyer does not mean you can comment about him / her in Facebook. As Facebook is a social media, there is really no difference between commenting on Facebook and letting the whole world see it versus putting up a banner at the area where the potential buyer is saying and telling everyone in the neighbourhood that there is this potential buyer who is a ‘jxxx’ or ‘sxxxxxx’ because he is viewing without having 10 percent downpayment. Just move on and serve the next potential buyer well. Dear RENs, I have high regards for many RENs, stay professional okay. As for that potential buyer, do start saving yeah.

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written on 23 Dec 2017

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