Ever heard of the term Building under construction (BUC) and have no idea what it is? Read on:

Unlike properties that has been completed, BUC properties are those that have yet to be completed. Buyers usually will visit showflats located near the actual site where the properties are build. They will rely on developer brochures or scaled models to make their purchase decision. The "Housing Developers Act and Sale of Commercial Properties Properties Act" are enacted to protect the buyers of BUC property.

Once you have decided the to buy BUC unit, the process will be as follow:
1) Pay a booking fee of 5-10% of the purchase price

2) Developer will deliver Sales & Purchase agreement (S&P) within 2 weeks from the date of option.

3) The option will expire 3 weeks from the date of delivery from developer. (Usually 5-7 weeks extension can be obtained)

4) Signed the S&P and pay 20% of the purchase price (Less booking fee)

* If your bank loan is granted at 60%, the bank loan can only be disbursed after the 40% is paid to the developer. Hence, the bank loan will commence on the 4th payment.

Next, the payment of the remaining 80% will be as follow:

1st Payment	Signing of S&P	20%
2nd Payment	On completion of foundation work	10%
3rd Payment	On completion of reinforced concrete framework	10%
4th Payment	On completion of brick walls	5%
5th Payment	On completion of roof/ceiling	5%
6th Payment	Doors, window frame, electrical wiring, plumbing and plastering completion	5%
7th Payment	On completion of external work - Carpark, drain ,roads	5%
8th Payment	Issuance of TOP/CSC	25%
9th Payment	CSC	15%

Short-selling websites are hardly disinterested parties, but may be providing a Darwinian service by weeding out “phony” Chinese firms seeking to dupe investors. China’s fast-growing economy has created many great opportunities for investors — and hucksters. With global accounting giants barred from directly auditing U.S.-listed Chinese firms, reliable financials are hard to find.

Into this void, short-seller sites such as Alfredlittle, Citron Research and Muddywaters have seized on alleged irregularities at several firms. They include China Media Express, Deer Consumer Products and Longtop Financial Technologies. The allegations have prompted SEC investigations, delistings (including Longtop) and trading halts involving more than a dozen China-based firms since March.

IBD recently conducted email interviews with the people behind these short-seller sites. An examination of their data and techniques hints that much of what they publish may be true. Yet it’s hard to verify research in China without boots on the ground.

How do short sites gather information in a nation thousands of miles from the U.S., and can you believe what they say?
Alfredlittle.com says it uses local analysts. They are said to comb public documents in Chinese. They also pose as customers and carry out video surveillance. And they compare SEC filings with data on file at China’s equivalent to the SEC. “Very often what is reported to the U.S. exchanges is different to what is reported to local China bureaus,” alfredlittle.com editor Simon Moore said via email. Local probers are said to be paid on a per-project basis based on the work, difficulty or danger involved. They get bonuses if their findings hit home.

Deserved Profits?

Alfredlittle.com doesn’t hide the fact that researchers profit from their data, including short selling the companies probed. “The reports are the product of many people’s labor and they justly deserve to profit,” Moore said.

But short sites also have critics.
“They carpet-bomb the company with allegations all over the place,” said Mitchell Nussbaum, chair of New York law firm Loeb & Loeb’s emerging-markets practice, which represents Chinese firms in the U.S. Nussbaum says if some claims haven’t been disproven it’s because SEC findings or independent probes are pending. Alfred Little, via email, defended his work: “No allegations made on the site have ever been disproven by the companies targeted.”

Little advised against investing in Chinese firms with more than one or two of 12 warning signs in a list published on blogger site seekingalpha.com. They include:

• Reverse mergers with high short interest.  
• Unnecessary dilutive share issuances when the company has excess cash or production capacity.  
• Amazing revenue and earnings growth relative to peers.  
• Weak balance sheets with large receivables vs. sales and unwillingness to disclose customer, distributor or supplier details.  
• Weak governance indicated by high CFO and auditor turnover and lack of involvement of truly independent directors.

 On the flip side, Alfred Little’s identity is shrouded in mystery. Some say Little is a pseudonym or that his findings represent the work of a group. Little communicated with IBD via emails or representatives.
Muddy Waters founder Carson Block uses investigative techniques similar to Alfredlittle.com.
“Start with an understanding of the movement of the target company’s product or service through the supply chain,” said Block, who appears on CNBC.
Block says shady Chinese companies often create phony suppliers or customers because they know these “counterparties” aren’t going to be audited.
Case in point: Muddy Waters in February alleged that China Media Express, which sells ads in Chinese buses, had less than half the buses it said were in its network. China Media denied it. But its shares tanked, its U.S. auditor quit and Nasdaq delisted it in May.