It’s the end of year again! As the saying goes, the past year is meaningless if you don’t buy estate at the end of it. But buying estate is indeed the most difficult thing in one’s life, because you save enough money for down-payment, and finally find that there still are many difficulties needing to face. We have seen many people who are cheated when buying estate, here summarizing three kinds of popular and must carefully selected estate for you to avoid traps.

Ⅰ. Educated-spot qualified estate

In December 2009, Mr. Ma bought one educated-spot qualified estate in Xicheng of Beijing through agency, with the price 16% higher than the average price in the same area. But Mr. Ma found the estate he bought is only next to the educated-spot qualified area and does not belong to the delimited estate stipulated in the enrollment brochure. Thus, Mr. Ma sued to the Xicheng Court to ask the agency to compensate him for the price differences between educated-spot qualified estate and non-educated-spot qualified estate, and refund the service fee. Finally, the court held that there was nothing in the purchase contract about the estate in question being a educated-spot qualified estate, and did not support Mr. Ma’s claim for price differences.

A few educated-spot qualified estates are offered so the prices are always high, with the changeable policies and traps. The agency’s rhetoric and the hype by some developers may be bubble of educated-spot qualified estate, so we offer two points for parents here.

First, you’d better check the relevant admission policies and whether the educated-spot estate qualification has been used in advance or not, to avoid suffering a loss because of the unclear or changeable policy. Second, you’d better specify your special purpose of buying one educated-spot qualified estate in the purchasing contract, and specify your right of cancellation as well as the seller’s responsibility for breach of contract when you cannot achieve the purpose of getting one educated-spot qualified estate owing to the seller’s behaviour of breaching contract.

Ⅱ. Mortgage estate

Mortgage estate may be commercial estate and may also be second-hand estate.

Some commercial estates may have been mortgaged before sold to the buyer, which may harm the buyer’s interest. Specifically speaking, developers may mortgage the commercial estate to the bank in order to get loans if they are short of money when building the aforementioned estate, but they hide the aforementioned fact about mortgage and sell the mortgage estate to the buyer directly. At this point, if the developer’s fund chain is broken, resulting in the inability to repay the loan, the bank cannot take back the loans and are likely to apply to court as mortgagee to attach or auction the estate, making the buyer face loss of payment and estate.  

Actually, the Guarantee Law and the Supreme People’s Court’s judicial interpretation stipulate that, if the developer deliberately hides the fact that the sold estate has been mortgaged, the transfer behaviour shall be invalid. In addition to returning the money and interest, the developer shall also bear no more than double the amount the buyer paid for the estate. The legislation stipulates relief approach for buyer, but how could the developer afford money double the estate payment when they cannot even afford to pay the loan? The ending of this story is often that the developer gets away, leaving the tearless buyer, so you’d better check the register information of the estate you want to buy in advance by inquiring real state file to the real estate department or checking the ‘other rights’ information on the original property ownership card.

As for second-hand mortgage estate, the biggest obstacle to obtaining a property ownership certificate may be ‘redemption’. Redemption means that the seller’s estate is still in the state of mortgage, and if you want to buy the estate, you must redeem the estate from the bank. If the seller ransoms the estate by himself, everything is okay. But the question is that the uneasy sellers always let buyers redeem the estate for themselves, which has led some easy buyers to cheerfully redeem the estate for the sellers but finally find that the estate has been sold to the second person, or the another seller’s creditor who suddenly appeared and applied to the court for sealing up the estate, which makes the buyers lost both of money and estate.

It’s advised not to redeem the property for the seller. The best method is to let the seller entrust a third party to redeem the property or take the approach of ‘two guarantee payment for redemption’ , i.e. to borrow from the bank to redeem the property by the guarantee. If you are sure to buy one estate, entrust a third party such as an agency, a guarantee company, etc. to intervene in the redemption business, and give your account number and password of the redemption payment to the third party to manage your interests.

(Here auction estate refers to the judicial auction estate in particular) the auction estate has won the favor of many buyers because of its low price and the nature of the judicial auction. After all, it is the estate handled by the court, which always makes the buyers feel that there is special protection, although it only works psychologically. But there are two common disadvantages of auction estates: higher paid prices and no guarantee of quality.

Many people buy auction estate because of its low price, but in fact, the price of buying an auction estate may be much higher than the auction price. Some buyers are happy to move in after paying off the estate, but they may be told that the property has owed a large amount of property fees for many years of vacancy and the large amount of interest on late payment fees for several years. In addition to the property fees, the auction estate may also owe taxes, water, electricity, land use fees, etc. Don't be too naive, ask the property management company before buying it.

What's wrong with quality? Mr. Liu once photographed one estate for 440,000. Before the auction, he saw that there was some water seepage in the estate in the ‘Auction List’, and went to the scene but no water leakage was found. During the decoration, Mr. Liu discovered serious water leakage on the wall , so he sued the auction company and the original owner of the estate. The Shanghai Intermediate People’s Court concluded in the final judgment that the leakage problem had been recorded in the ‘Auction List’ so the auction company and the original owner of the estate had fulfilled their obligations to notify the defect according to law, and Mr. Liu lost the lawsuit. Usually buyers can only inspect the auction estate by observing it on the spot and may not be able to find the quality defects of the estate. Here could we only remind everyone that you must be more careful when buying the auction estate, otherwise you may suffer greater losses due to coveting little advantages.

Buying an estate is the biggest deal in many people’s lives, so it's important to be careful, don’t you think so?