Recently, the market has recorded a record-breaking low-price transaction. The transaction price of a second-hand building in the urban area is not public housing, and the transaction price is only 1.2 million yuan! A mid-rise one-bedroom unit in Hong Fai Building in Cheung Sha Wan, with an area of 242 square feet, was sold for only NT$1.2 million. The cost has returned to the level of 13 years ago, and the price per square foot is only NT$4,950. Is this unit a haunted house? Actually it is not, but the unit is an undeeded building.
Look back at the price cutting process of the original owner of the unit. The original owner put the house on the market in November last year with an asking price of NT$3.3 million. After six bids, it was finally sold for only NT$1.2 million. Based on the transaction record of the same housing estate, the transaction price this year ranged from NT$2.9 million to NT$3.55 million, which is relatively low. The market price is more than 60% lower.
Difficulty reselling later
Generally speaking, the biggest problem with undeeded properties is that they are difficult to resell. Although the valuation system on the bank's website still has the opportunity to value the unit, in fact, it is difficult for applicants to apply for a mortgage with the bank. Even if you are approved for a mortgage, there is a chance that the loan amount will be reduced because banks are generally unwilling to underwrite mortgages for properties without title. The buyer of the unit sold this time entered the market with full pay. It is said that the buyer is an investor. With a monthly rent of NT$12,000, he can earn a rental return of 12%. With such a high return on transactions, the hidden risks are of course also high. In addition to the risk that the initial buyer cannot obtain a mortgage, another direct risk is the ownership issue.
Since the property is a property without a lease, if someone claims to own the property title in the future, the buyer may be involved in a title dispute. If a buyer of an undeeded property wants to protect himself, he can apply for a photocopy of the deed from a law firm. Although the new deed has legal effect, the bank may not treat it as a normal property, so it will still have an impact on the first buyer. It is worth noting that not all properties can be redeemed through oath. Of course, the original owner can also find a lawyer to renew the lease before selling the property, but this will not help the buyer apply for a mortgage.
Time is the panacea for eliminating risks
However, where there is danger, there is opportunity. If no one comes forward to say that they own the property title several years after purchasing the unit, such as ten years, then the buyer's situation can be said to be "safe." And if the buyer purchases the unit at such a low price, even if it needs to be resold in the future, I believe it will not be difficult to find someone to take over, because the doubts about ownership disputes have basically been eliminated.
On the other hand, there have been reports in the news in the past that criminals have pretended to be property owners who have no property title or have immigrated for many years, causing buyers to suffer losses. Therefore, unless the buyer is familiar with the owner, generally speaking, buyers will not be advised to purchase a property without a lease, lest they lose a lot for a small amount.