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How to avoid conflict in real estate transaction

Dear all buyers, sellers & Agents

After reading about 17 threads in other forums. I felt that there is alot of ppl unhappy with property agents. I do understand the frustration and agony one had to go through when engaging such agents. Here are some tips that u can adopt when buying or selling to avoid all the unhappiness.

Buyers tip (HDB) :
1) pls do your financial calculation before buying. U can apply for your HLE (Housing loan Eligiblilty Letter) before your search to ensure your HDB loan status. U cannot exercise your option to purchase if u do not have one. If u r taking a bank loan u need to get your LO(Letter of Offer) before exercising.

2) pls visit your target area to survey the surroundings before looking at the units. This will make u narrow ur search.

3) pls ensure u have sufficient cash for the purchase. not all the purchase price can be finance by loan and cpf. Cash above value as well as 5% cash of value if u r taking bank loan must be paid in cash.

4) find a knowlegable agent by testing him about rules and regulation. a good agent will also help u plan the logistic not merely signing of OTP.

Buyers (Private Residential) :
1) Make sure u secure a loan before u purchase. If your purchase is above the bank valuation, u might need to pay alot more cash.

2) Buyers do not need to pay agent commission however if u want to get cheap deals propose retainer fee to well established agents and make him inform u if any good value property is put up for sale (I do that even though I'm a retired agent). I've bought several good properties that give me 70% capital return using such methods.

3) Do your own research too. Check out prices from URA website and if u want more specific data can do caveat search from SLA.

Sellers (HDB/Private):
1) Engaging a agent to market your property is advisable if u cannot afford the time to listen to the hundreds of calls per day even if u only put one advertisement in the classified. Let me explain y, once your property is advertised your number will be captured into a list call FSBO (For Sale By Owner), this list is available to all agents and new agents and telemarketers of 30,000 agents in singapore will start bombarding your phone even if they have no buyers yet.

2) U can give verbal exclusive to the agent u r most impressed with. For ppl with honour, their word is their bond. For ppl without honour even got contract also screwed u around. (I'm refering to both sellers and agent). If he is good keep ur word. If he is not all u need to do is ask him to disappear.

3) Monitor your agents advertisement. Alot of agents claim they advertise but never. Make sure they commit to u and inform u when they advertise. However don't be ridiculous by asking them to advertise for u everyday. twice a week is more than enough. Make sure he co-broke with other agents by testing him out. A non-cobroke agent is usually a crook.

4) Avoid Staging. Staging is a term used by most experience agent. Staging means to create false impression. Let your agent educate u on market prices and varified with HDB / URA web site. However u must note that HDB web site transacted prices is lagged by 2-3mths. This is because HDB only update the price after 2nd appointment/completion. Which means Nov price could have been sold in Sept and completed in Nov.

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Just how much cash upfront is needed for a new hdb, resale hdb etc?
Depends on the cash above valuation, and whether you are taking bank loan or HDB loan


Example 1:
Eligible for New Flat from HDB, Eligible for HDB loan. Purchase price 200k.

Minimum Downpayment = 10% of purchase price
=10% x 200k = 20k (Can be paid fully using CPF)

Maximum loan amount = 90% of purchase price = 90% x 200k = 180k

Stamp fees payable to government (pls use below formula)
1st 180,000 = 1% of 180,000 = $1,800
2nd 180,000 = 2% of amount/180,000 = $3,600
Any amount above 360,000 = 3% of amount

Stamp fee For this case
(Price of 200k) = 1,800 + (20,000 x 2%) = $2,200
(Can be paid fully using CPF)

Above example is the same for HDB resale flat at valuation and taking HDB loan
Please note that HDB resale fact usually include a component call the CASH ABOVE VALUATION (COV).

Example 2:
Resale HDB unit, Bank Loan. Purchase price 240k.
Valuation Price = 200k
Cash above valuation = 40k (CASH on top of the valuation price, negotiable between buyer and seller)
Final purchase price = 240k

Minimum Downpayment = 10% of Valuation price
For HDB loan =10% x 200k = 20k (Can be paid fully using CPF)
For Bank Loan = (5% Cash + 5% CPF) x 200k = 10k compulsory cash + 10k CPF = 20k


Stamp fees (pls use below formula)
For this case, (Price of 240k) = 1,800 + (60,000 x 2%) = $3,000
(Can be paid fully using CPF)

or a condo, price range quotes welcome .
breakdown of costs welcome . Same as HDB resale with BANK LOAN
cash over valuation and stamp duties are puzzling me tooRefer to above.

Advice : Do not overcommit.

GeO
Based on this e.g

Example 2:
Resale HDB unit, Bank Loan. Purchase price 240k.
Valuation Price = 200k
Cash above valuation = 40k (CASH on top of the valuation price, negotiable between buyer and seller)
Final purchase price = 240k

Minimum Downpayment = 10% of Valuation price
For HDB loan =10% x 200k = 20k (Can be paid fully using CPF)
For Bank Loan = (5% Cash + 5% CPF) x 200k = 10k compulsory cash + 10k CPF = 20k

If it is bank loan, where does the $5K deposit fit into ? Part of the 5% compulsory cash ?For bank loan, pls note that the total cash component is COV + 5%,
which in this case is 40k + 10k = 50k

The 5k deposit will be deducted from this 50k, meaning the buyer will have to issue a cheque of 45k to the lawyer who will be handling his conveyancing and bank loan issue.

On the similar case, where does the $5K deposit goes to if it is a HDB Loan and transact at valuation or below valuation?
of course it goes to offset the purchase price.

Eg. valuation 200k, flat sold at 195k, deposit paid 5k.

So additonal downpayment needed will be:
Purchase price of ( 195k x 10% ) - 5k deposit = $14,500 (CPF or cash)

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