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Comment by 26fingies | Hacker News Reader

i was gonna say - a lot of places you can put a bunch of cash down for an apartment that only exists as a picture on a sign somewhere.

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In the UK you can buy "off plan", but you only pay a deposit, and that goes into escrow until you get the keys, the developer can't touch the money until then

I assume it's similar in most countries

Not quite. In india properties get loans during early construction as well, and the amounts are disbursed in tranches based on completion progress. Timelines must be filed publicly with RERA and a non RERA approved property is a red flag. No escrows as such for loans taken by buyer.

What I call loan is a similar arrangement to mortgage. Buyer pledges property as collateral, pays about 20% out of pocket, rest is a debt to be paid. Defaults result in loss of ownership of property. The agreements are tripartite. Builder gets paid from the loan taken out by buyer in tranches and builder reputation matters along with market value assessment and buyer's credit profile for obtaining a loan.

Other countries have the rule of law and you can sue a developer. That’s not possible in China. I did read where disgruntled Chinese are withholding payments on these unfinished buildings. Not sure what the repercussions could be for those who do it.

Lots of people lost a lot of money on never finished apartments in my (EU) country. Suing doesn't help you when there's no money left to distribute.

Most countries haven't made it the corner stone of their economy.

Often at a significant discount over waiting for construction to complete.

In the west (at least America) that money needs to be put in escrow.

You mean like a deposit, right? Not a mortgage.

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