Buying an apartment in China
Well,recently I didn't have any posts. Just as any new toy - the blog became less interesting after I played with it for a few days :)But now, I was asked to write an article about my life in Beijing as a foreigner. Especially, that I will be leaving Beijing soon - I decided to write something, leave my mark here before I go :) I will write about my experience of buying an apartment in China.
Why I wanted to buy an apartment in China - is another topic. So, I started looking. I identified the area where I wanted to live first. Then, with the great help of my Chinese collegues, I started looking. My requirements were:
- foreigners can buy in the building (not all building can sell to foreigners)
- I should be able to borrow money from a Chinese bank
- apartment should be already finished and ready to move in,
buying walls and doing the finishing work yourself is an adventure I didn't want to get into.
- price: it needed to be affordable
First one of my collegues, Helen made a long list of all properties
in the area I wanted. The list was about 25 items. Then, my other
collegue - Patrick, started calling each of these places and asking same set of questions. After about a month (preparing the list and going through the list) - my search was narrowed down to 2 places ! One of them was too expensive, so I was left with only one. If I wanted to continue and buy it - that was the one. So, after some more deliberations - I made up my mind and went for it.
First - sales people told me right from the start: I can borrow money from a Chinese bank. That was a good sign, because many
places we called - immediately became reluctant to talk to us, once they found it was for a foreigner. I went through the process of choosing the floor, the model, the color of some of the things which had options to choose from. I have made a deposit: that was a big day, because I had to part with about 150,000 RMB, which is about $16,000 USD. Then, it was long waiting for the bank to approve my application. Here, a surprise was awaiting me: I was absolutely impressed with the service I received from the Chinese bank. The bank loan officer spoke perfect English, apparently much of the internals of borrowing money in China are in fact same as in the US. We had a very pleasant conversation for over an hour when he called me first time. We talked about my life in China, my work, my traveling. He wanted to know why I decided to buy an apartment here. More importantly: will I be able to pay money back to the bank ? After our conversation - he was satisfied and few days later, I got my loan approved ! It took allmost 9 months for the bank to approve my application, as opposed to 1 week for the locals. But, it was in my favor, because I would be paying the loan
immediately after its approval - so I saved myself about 9 months
worth of payments ! I forgot to mention, that in China when buying an apartment - money have to be paid in advance, ie: before construction is even finished. So, you are paying for something you haven't seen. In fact, local builders are building using the money from the sale. It is the opposite in the US and Canada, where a small deposit is usually required but the rest is finalized when construction is complete and all parties are satisfied.
Some time close to the completion date, I managed to meet one of my future neighbors, who was a friend of one of my collegues. I learned that our neighbors are organizing big meeting to discuss upcoming issues. I went to the meeting. I found about 300 or so people squizzed into a large auditorium in one of the Universities.
They were very well organized, with leaders setting agenda, there were also guest speakers: lawyers. What they wanted was to fight with the builder over some issues. Ultimately, they wanted to save
money. Some of the fees were too high, they felt and they wanted to go and confront the builder as a group to ensure success. The meeting was very long and there were a lot of arguments between speakers. I decided not to join with them. What I realized, was that the problems and high fees were not really that serious and high. But Chinese people have it in their blood: they will negotiate and argue for as long as it takes. And they will ALLWAYS negotiate and argue, no matter if it is apple they are buying in the market, or a new apartment. The approach is the same. I recently read, that now people buy cars in China - as a group. People who are interested in the same car, meet each other on the BBS chat forums, then setup a date and go together to buy 20-30 cars with a high discount ! Same approach.
But, for me - negotiations and arguing is too annoying and time consuming. I guess I am not Chinese, after all :) So, I didn't join them. Turned out - their efforts were not successful, they've lost.
After I moved in, things were rather smooth: I spent time and money and bought some furniture, there were no serious problems diccovered in the apartment (to my and my Chinese collegue's surprise, who said that I was lucky). Building management allways treat me very nice and I get a feeling - even nicer than some other residents, probably because I am one of only 3 foreigners who live in the building !:)
Well, this is the end of my story. To conclude, I can say that my experience of buying property in China was not that much different from similar experience in the US.
Why I wanted to buy an apartment in China - is another topic. So, I started looking. I identified the area where I wanted to live first. Then, with the great help of my Chinese collegues, I started looking. My requirements were:
- foreigners can buy in the building (not all building can sell to foreigners)
- I should be able to borrow money from a Chinese bank
- apartment should be already finished and ready to move in,
buying walls and doing the finishing work yourself is an adventure I didn't want to get into.
- price: it needed to be affordable
First one of my collegues, Helen made a long list of all properties
in the area I wanted. The list was about 25 items. Then, my other
collegue - Patrick, started calling each of these places and asking same set of questions. After about a month (preparing the list and going through the list) - my search was narrowed down to 2 places ! One of them was too expensive, so I was left with only one. If I wanted to continue and buy it - that was the one. So, after some more deliberations - I made up my mind and went for it.
First - sales people told me right from the start: I can borrow money from a Chinese bank. That was a good sign, because many
places we called - immediately became reluctant to talk to us, once they found it was for a foreigner. I went through the process of choosing the floor, the model, the color of some of the things which had options to choose from. I have made a deposit: that was a big day, because I had to part with about 150,000 RMB, which is about $16,000 USD. Then, it was long waiting for the bank to approve my application. Here, a surprise was awaiting me: I was absolutely impressed with the service I received from the Chinese bank. The bank loan officer spoke perfect English, apparently much of the internals of borrowing money in China are in fact same as in the US. We had a very pleasant conversation for over an hour when he called me first time. We talked about my life in China, my work, my traveling. He wanted to know why I decided to buy an apartment here. More importantly: will I be able to pay money back to the bank ? After our conversation - he was satisfied and few days later, I got my loan approved ! It took allmost 9 months for the bank to approve my application, as opposed to 1 week for the locals. But, it was in my favor, because I would be paying the loan
immediately after its approval - so I saved myself about 9 months
worth of payments ! I forgot to mention, that in China when buying an apartment - money have to be paid in advance, ie: before construction is even finished. So, you are paying for something you haven't seen. In fact, local builders are building using the money from the sale. It is the opposite in the US and Canada, where a small deposit is usually required but the rest is finalized when construction is complete and all parties are satisfied.
Some time close to the completion date, I managed to meet one of my future neighbors, who was a friend of one of my collegues. I learned that our neighbors are organizing big meeting to discuss upcoming issues. I went to the meeting. I found about 300 or so people squizzed into a large auditorium in one of the Universities.
They were very well organized, with leaders setting agenda, there were also guest speakers: lawyers. What they wanted was to fight with the builder over some issues. Ultimately, they wanted to save
money. Some of the fees were too high, they felt and they wanted to go and confront the builder as a group to ensure success. The meeting was very long and there were a lot of arguments between speakers. I decided not to join with them. What I realized, was that the problems and high fees were not really that serious and high. But Chinese people have it in their blood: they will negotiate and argue for as long as it takes. And they will ALLWAYS negotiate and argue, no matter if it is apple they are buying in the market, or a new apartment. The approach is the same. I recently read, that now people buy cars in China - as a group. People who are interested in the same car, meet each other on the BBS chat forums, then setup a date and go together to buy 20-30 cars with a high discount ! Same approach.
But, for me - negotiations and arguing is too annoying and time consuming. I guess I am not Chinese, after all :) So, I didn't join them. Turned out - their efforts were not successful, they've lost.
After I moved in, things were rather smooth: I spent time and money and bought some furniture, there were no serious problems diccovered in the apartment (to my and my Chinese collegue's surprise, who said that I was lucky). Building management allways treat me very nice and I get a feeling - even nicer than some other residents, probably because I am one of only 3 foreigners who live in the building !:)
Well, this is the end of my story. To conclude, I can say that my experience of buying property in China was not that much different from similar experience in the US.
posted by sashka the bear at 2:09 AM
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