HDB home owners - Agents partner with Rogue Lawyers to jack up rates

HDB home owners - Agents partner with Rogue Lawyers to jack up rates

April 2011

Amidst many complaints against property agents, the Singapore government has set up the Council of Estate agencies to regulate the property agency business as well as to issue each property agent with a license number, and measures such as NO dual representation do not go far enough.

If you have discovered that you have paid more than a certain rate for your legal conveyancing, you should raise a suspicion and make a NOTE (though not necessarily a complaint) to Council of Estate Agencies (CEA).

There is also a rule in which agents cannot refer home owners to money lenders. Shouldn’t CEA ban agents from striking deals with bankers and lawyers and pocketing illegal kick backs?

Agents are still happily making referrals to lawyers and banks. This is a serious problem and we should highlight here so that in case you are a victim, you could raise this issue with Council of Estate Agencies.

Agents like to strike deals with lawyers to give them kick back. So where is the extra fees coming from? The lawyer (those bad ones) will go about charging the home buyer more in order to pay out the commission. Not only that, agents also work with companies that have pre-arranged ELEVATED legal fees with some law firms. This extra cost is passed on the home buyer. These illegal companies then pass on this extra commission gained as a result of illegal legal fee kick back to the agents. This is illegal under current law as lawyers cannot give out commission from their law fee.

Property agents also push you towards unattractive home loan rates just so as to benefit from the legal fees kick back.

It is always useful to note down the time, date of communication with the property agent. And try to communicate more with Emails and get them to confirm their facts via email. Do not rely too much on verbal conversation.

Attached here is a property agent complaint form which we downloaded from the CEA website. (Please note, you should always check the CEA website to ensure that the form is up to date, we only provide a convenience and are not liable to any losses whatsoever from using the form)A property agent complaint form is available at property buyer. You can contact them at loans (at) propertybuyer.com.sg

CEA Property Agent Complaint Form is available upon request.

Reasonable conveyancing rates guide

For HDB buyers - Buying a HDB in the resale market
$500 mortgage stamp fee is around $1900 to $2300. In fact, $2300 is already at the higher range, you should already start to open your eyes and raise a complaint or lodge a check with CEA if it is at above $2000.

Conveyancing rates for HDB home loan refinance
The estimated legal fees inclusive of Mortgage stamp fee is from $1900 to $2300.

For Private Property Loan- Buying a New Condo under construction
Total (Inclusive of Mortgage Stamp fee) is $2500 (for near to TOP) to $3500 (for those many years later)

Some law firms claim that it will cost them more resources to keep things on file and track condos which are still under construction. And indeed if the completion is far away, the law firm’s responsibility is dragged out longer. If they did not execute according to the letter of instructions from banks, they may become black listed by the banks and be kicked out of the bank’s panel. The cost is also more.

Legal conveyancing for buying Private residential – completed condominium
Total (Include of mortgage stamp fee) is $2500 to $3210.

The price varies a bit, depending on the law firm and the banks. Some banks are deemed more troublesome at the back end, therefore some law firms charge more. But there is a limit to it, so the above prices can be used as a guide.

Conveyance fees for Private Residential Refinance
The legal conveyance fees (including mortgage stamp fee) ranges from $2500 to $2800.

Why do legal conveyance rates differ?

Basically it is up to the law firms when to charge you higher. Perhaps sometimes, we feel it depends on their mood, other times, it depends on whether they are in cahoots with the Dishonest property agents.

Law firms can charge you extra under these situations: -

Last minute appointments such as 1 day before the exercising of option date, law firms may charge more.
Exercise dates falling into public holidays (maybe)
Faster that the normal legal completion date.
Liaising with CPF on expediting payment.
Multiple parties involved in the property.
Involving bridging loans or construction loan.
In illegal partnership with property agents.
Not corrupt, but legal conveyancing is not their core business and hence they charge a higher price.
Some property, usually those above 3m may face higher legal conveyancing fees, due to more potential complexity. (But not always the case)
Involving probate cases and estate issues.
What can you do if you get charged higher fees than normal?

If you have discovered that you get charged a higher fee than what we have described, it is possible that you have been cheated by the property agents, if you have not been cheated by the agents (in that they did not receive a commission), it is possible that you have over-paid.

Although the law society fee recommendation stipulates a higher fee, the free market has stabilized on the above fees which we have highlighted and hardly anyone uses the recommended fee.

In case you have paid higher than the highest range there, you can take down your property agent's license number and raise a complaint in case the bank and/or the law firm was referred to you by the property agent.

CEA Property Agent Complaint Form

These guideline fees are what we understand to be correct market rates as at April 2011

In case you do not know if you are cheated, you can tell us your story, we will be able to guesstimate whether you have been cheated.


write to loans at propertybuyer.com.sg perhaps we can go through your case to let us know if you have been cheated.

SMS Property Buyer mortgage consultants at: +65 9782 8606

Invest in Singapore property: Mortgage Insurance for Property Buyers

Invest in Singapore property: Mortgage Insurance for Property Buyers

By www.PropertyBUYER.com.sg Singapore Mortgage Consultants
In the US or elsewhere , Insurance sector is over-saturated, insurance companies are getting too innovative in creating products. Some are borderline betting houses in our opinion and they undertake too much risks, such as buying insurance to insure against the person having the cash flow to continue to service the home loan.

There are other mortgages that can even insure against the price of the property staying above a certain valuation. Taking easy money but naked exposed risks such as such "Book-making" deals are what made some BIG insurance giants to fall. What has the world come to? (This is part of the reason how the world got into the financial crisis).

Hopefully Singapore's Assurance sector will not go astray . Some Singapore banks may give you some preferential Singapore SIBOR-SOR-fixed bank loan rates , but try to cross sell their partner's insurance package on you.

Home loan Reducing Term Insurance

Mortgage insurance is designed to ease partially the pain of a partner who has lost a loved one and still ended up taking over the liabilities of the home loan repayment.

For example , if the loan is $1,000,000 in which each person shares half the repayment burden. In this case, each person buys $500,000 of insurance. So that when a partner dies, the other partner gets $500,000 towards payment of the house. There is also what is called Mortgage insurance .

When the loan is being repaid , the principle becomes smaller , hence the insured amount is reduced and hence also the premiums.

This assures the Singapore bank that the home loan can be serviced and serves to defray default risks of singapore home loans borrowers as this insured amount may be tied to this liability .

If you are well insured and you have various policies against your death, such policy is an over-kill. Essentially whatever they call it, it's just a name. What is important is that you are able to pay or your partner is able to pay in the case of one's death .

Why must Banks sometimes force you to insure with their partner insurance company ?

Banks are increasingly doing cross sell , so this helps to increase their profits targets.

Sometimes, such bundling may or may not be the best option for the Singapore property Buyer or the Singapore home owners refinancing their properties. Please SMS (text) your property buyer Mortgage broker at Singapore GMT+8 +65 - 9782 8606, they will be able to assess the pros and cons of each home loan package choice.

Housing Insurance : home content Insurance

Home content insurance pays you if your contents are lost, stolen or destroyed. There may be various insurance riders which covers many different conditions leading to the loss or damage.

Housing Insurance : Property Insurance

Just to digress , you can guess fairly correctly how much your house costs to build. As this is the amount that the actuary department reckon it costs to re-build in the case the building is destroyed.

For example your condominium is $1,000,000. If the evaluated construction cost is $400,000, this means that $600,000 is attributed to land and $400,000 is the building cost .

Developers won't tell you how much it cost to build a condominium, therefore you can look for your Fire and building insurance to find out how much your unit is insured for to know how much is the replacement cost . (We use this method at PropertyBUYER.com.sg as a proxy for estimating building cost)

Singapore banks can then use this money to pool it into the sinking funds for the condominium to be reconstructed , into a complete and building ready for occupation .

At www.PropertyBuyer.com.sg our Singapore Home loans and mortgage consultants (www.propertybuyer.com.sg/contactus.php) can help you through your property buying process .