After one is satisfied with the selection of the property he is intending to purchase, signing of the sale and purchase agreement is the next obvious step. If the property that one intend to purchase is already in the advance stage of construction, always remember to negotiate for an interest free period or grace period to allow yourself time to source for a loan as the time taken for
1. selection of loan
2. loan documentation
until the fund is released by the financier bank can be quite long. Therefore it is advisable to negotiate for a minimum of 60 days or 90 days. The interest free period is particularly important if the construction of the property is already in advance stage and if the buyer is taking maximum loan of 90% as one can expect that upon signing of sale & purchase agreement, the developer will flood the buyer with a series of progress billing that will be due 21 working days after issuance of billing that make it to about a month including the non-working days and the late payment interest is normally 10% which is higher than the loan interest rate which can be as low as zero for the first year for some loan package from certain bank. Without the interest free period, the buyer would most likely be charged hefty late payment charges as the amount of billing can be as high as 75% of purchase price which the interest calculation is based on.
However if one is buying a property where construction has yet to begin, then the issue of interest free period may not be critical but as buying a property is not something that one do very often, why not exercise your right to as much as possible before you sign above the dotted line.
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