10 Important things to know for 1st time Private Property Buyer on sub-sale units
By: Daphne of www.PropertyBUYER.com.sg mortgage consultants
TEL 6100 - 0608
SMS 9782 8606
As a recent property buyer, I started my search for my ideal apartment since November last year. I began my property hunt with absolutely zero knowledge on buying property in Singapore. I do not know the legal procedure involved, I do not know the tricks used by most property agents, and I do not know which area I should start with my property hunt, just to name a few. I missed the boat in making my purchase during the period from Jan- May when the property price was low as I was hoping that the price will go down even further and obviously being a first time inexperience property buyer, I was afraid to take the plunge.
I believe there are many people out there facing the same challenge as I did when I first started my property hunt. I was lucky to have friends who are experience in the property field to provide me with sound advice. I hope that this article can provide some useful insights on things one should take note of when purchasing a private property. The information provided is all base on my own accumulated knowledge and experience when I did my own property purchase.
1) Due Diligence
Buying a property is a big commitment and requires a lot of hard work in doing your own research. Never depend solely on agent’s recommendation as end of the day , the agent’s aim is to close the deal and get the commission. Research includes surfing through various property website to read up on property related articles and checking out the available units sold.
2) Do not depend solely on one agent to look for your apartment. Nothing beats
spreading the eggs into a few baskets and doing your own search. Talk to as many agents to learn and gather insights along the way. Experiencing unprofessional agents is part of the learning curve.
3) As a private property buyer, you do not pay any commission to the agent. And you should not no matter what he or she says. This is because they earn commission from the seller.
4) Stamp duty can be paid using CPF.
Buyer will have to fork out Hard cash first in paying the stamp duty. CPF will only reimburse the stamp duty back to the buyer upon completion of the property sales transaction which will take at least two months.
5) Stamp Duty fee calculation
1st S$180K is 1%
2nd S$180K is 2%
Remaining amount is 3%.
For example: if you are buying a property that cost S$600,000, the stamp duty will be as follow:
1st S$180,000 @ 1%- S$1,800
2nd S$180,000 @ 2%- S$3600
Remaining S$240,000 @ 3%- S$7,200
Total stamp duty is S$12600
6) Bank Valuation
Bank valuation on the property you wish to buy is very important. The bank valuation will help to determine how much cash upfront you need to fork out and whether you are buying an overprice unit or getting a good deal. Never take the Singapore property agent’s claimed valuation as final. Agents do cheat on valuation. Make sure to check with an independent third party such as a Singapore mortgage consultant or your own personal banker who can help you to make sure on getting a proper and correct valuation. Different banks often give different valuation for the same unit.
7) Bank Loan
Not all banks offer up to 90% bank loan. Some bank only offer up to a maximum of 80% of 85%. Thus if you wish to buy a unit with a 85% or 90% bank loan, your choice of bank selection will be limited. Its recommended that you talk to your mortgage consultant or bankers up front on your intention to get more than 80% loan.
8) One should also compare the various bank interest rates to secure the best bank
loan. Some loan package come with lock in period and others use Sor or Sibor rates. Property agents usually ask one of their most frequent use bankers to advise the buyer on the interest rate. Often they do not help the buyer to compare the rates and package from the various banks. It is up to the buyer’s due diligence to do so. The use of independent mortgage consultant will be helpful in this aspect.
9) Ensure that you can secure the bank loan before paying the 1% option to the seller. In the event that your bank loan is not approved, you will have to either top up the differences in cash or to forgo the purchase, end up losing the 1% payment.
10) If you are buying a sub sale unit that is still under construction, you will need to
pay another S$400 to S$428 administrative charges in cash to the developer for the paper work procedure fee.
Showing posts with label property buyers. Show all posts
Showing posts with label property buyers. Show all posts
Monday, December 14, 2009
Thursday, November 5, 2009
Singapore property agents speculate and fleece buyers
Singapore property agents speculate and fleece buyers
Article contributed by www.PropertyBUYER.com.sg
Do you really think you can get a good deal from property agents?
Do you really think you can outsmart the property developer?
Read on.
Do you remember some months ago that we warned that property agents are out hunting again. Their tools are catch words such as “it will sell out soon”, “En-bloc”, “sea view”, “Expats are buying”, “MRT”, “population growth”.
To us, these are simply qualitative aspects of an economy or a property or a development. It has no research value and very little bearing on the true value of a property.
Sometimes simply the word “MRT” will make you part with more than you realize and then after a while, you felt that you had overpaid.
During June to September 2009, there are many developer's condominium launches. Developers have a field day clearing inventory while Singapore property agents pounce on genuine property buyers.
Is it possible to get a good deal from developer launches?
Developers always find ways to enhance value of their properties through features and uniqueness. Many of these uniqueness are building related, some of these are location related and others perhaps are landscape related.
Many building related unique features will only last while the building is in good condition. Over time, the building deteriorates and the unique feature and it’s value is consumed and disappear.
So can you outsmart the property developer?
Condominium launches are timed to extract maximum benefit for the developer. You will only get a good deal when the developers are starved of cash and wants to let go of their properties cheaply and quickly.
Generally it is hard to get a good deal at property launches. This is because the property developers have: -
· They have inside news and development plans
· They have an in-house economic team
· They have political connection and relationships
· They have holding power
· They can constrict supply
· They can time the market
· They can influence the media, advertise and create PR
· The whip up the consumer sentiment.
In other words, the launches are timed to perfection exacting the maximum damage on your wallet.
Although all property cycles follow the economic fundamentals, but property cycles can also defy fundamentals for a period of time when sentiments are especially bullish, the prices only fall back down once the sentiment fades and tracks again the economic fundamentals.
There is another element of surprise. Recently our contacts have been telling us that the agents are themselves the speculators and they are fleecing the buyers.
Singapore property agents speculators add to your problems
A property developer will likely appoint 1 or 2 property agencies as marketing agents. These agencies will inform their agents to stand-by to sell the properties.
Developers normally do not launch the condominiums directly with the exception of Far east organization. Therefore the property agents are then able to get market information of the launches and then gauge the market response.
They will jump in and buy first if they sensed a possible killing. They have no plans to stay in the condos.
So Singapore property agents buy the properties and flip immediately at a huge profit. This profit is of course at the expense of genuine property buyers.
So do consumers get a choice to the best units and the best prices?
Usually not. This is because Singapore property agents dominate access to these information. And will they share these information with you?
Mostly not! Many agents with their “potong jalan” grab all mentality will not think of long term. They will leave the best for themselves and give you the scraps.
If they call you and tell you it’s a good deal, that’s because they don’t find it good enough, else they or their families will have already bought it.
Genuine property buyers will have to pay more
Of course you as genuine property buyer, if you like the development, not only you have to pay the developer’s already high asking prices, you will also have to suffer paying easily 5 to 15% more because of these Singapore property speculators if you really like the condo.
Property agents Convince property buyers that valuation can be matched
Property agents convince property buyers that bank’s home loan is obtainable as valuation can be matched when in fact there is no such thing.
After paying the 1% deposit for an option to purchase, the property buyer is stuck.
So how much did the Singapore property agents make from you?
Purchase price = $850,000
(Only a few banks can match as it is too high valuation)
Speculator buys at $850,000 and puts it up again at $920,000
(within days).
Property agents - how how does it cost them to speculate
$850,000 + $20,100 (Stamp duty) – $8,500 (1% commission for selling property) = $861,600.
Property agent flipper makes = $920,000 - $861,600 = $58,400.
This is the extra money you have to pay because of these property agents cornering the market and because banks refuse to raise valuations any higher.
Many people will fail to get a Singapore home loan and lose their 1% deposit. Luckily for some, they have come to us Property buyer mortgage consultants at SMS 9782 8606 to do an Approval in Principle for their potential purchase.
The EXTRA cash you have to pay because of Speculator property agents
$58,400 (extra) + $42,500 (5% cash) + $22,200 (Stamp duty) =
$123,100
Suddenly you are out of budget by $80,600.
Usually you can pay your stamp duty using the Central provident fund (CPF), but because for sub-sale, there may not be enough time to complete the transaction and insufficient time for your lawyers to work with the CPF lawyers to disburse the funds. Instead of using your central provident fund (CPF) to pay for your stamp duty, you will have to first pay it through cash.
Should I buy a Sub-sale unit?
It depends on how desperate you are to buy that property. There are more than 280,000 condominiums and private properties in Singapore. If you are patient you can always find another one as good, if not better.
Other articles: -
Singapore property investors
Singapore mortgage consultants
Article contributed by www.PropertyBUYER.com.sg
Do you really think you can get a good deal from property agents?
Do you really think you can outsmart the property developer?
Read on.
Do you remember some months ago that we warned that property agents are out hunting again. Their tools are catch words such as “it will sell out soon”, “En-bloc”, “sea view”, “Expats are buying”, “MRT”, “population growth”.
To us, these are simply qualitative aspects of an economy or a property or a development. It has no research value and very little bearing on the true value of a property.
Sometimes simply the word “MRT” will make you part with more than you realize and then after a while, you felt that you had overpaid.
During June to September 2009, there are many developer's condominium launches. Developers have a field day clearing inventory while Singapore property agents pounce on genuine property buyers.
Is it possible to get a good deal from developer launches?
Developers always find ways to enhance value of their properties through features and uniqueness. Many of these uniqueness are building related, some of these are location related and others perhaps are landscape related.
Many building related unique features will only last while the building is in good condition. Over time, the building deteriorates and the unique feature and it’s value is consumed and disappear.
So can you outsmart the property developer?
Condominium launches are timed to extract maximum benefit for the developer. You will only get a good deal when the developers are starved of cash and wants to let go of their properties cheaply and quickly.
Generally it is hard to get a good deal at property launches. This is because the property developers have: -
· They have inside news and development plans
· They have an in-house economic team
· They have political connection and relationships
· They have holding power
· They can constrict supply
· They can time the market
· They can influence the media, advertise and create PR
· The whip up the consumer sentiment.
In other words, the launches are timed to perfection exacting the maximum damage on your wallet.
Although all property cycles follow the economic fundamentals, but property cycles can also defy fundamentals for a period of time when sentiments are especially bullish, the prices only fall back down once the sentiment fades and tracks again the economic fundamentals.
There is another element of surprise. Recently our contacts have been telling us that the agents are themselves the speculators and they are fleecing the buyers.
Singapore property agents speculators add to your problems
A property developer will likely appoint 1 or 2 property agencies as marketing agents. These agencies will inform their agents to stand-by to sell the properties.
Developers normally do not launch the condominiums directly with the exception of Far east organization. Therefore the property agents are then able to get market information of the launches and then gauge the market response.
They will jump in and buy first if they sensed a possible killing. They have no plans to stay in the condos.
So Singapore property agents buy the properties and flip immediately at a huge profit. This profit is of course at the expense of genuine property buyers.
So do consumers get a choice to the best units and the best prices?
Usually not. This is because Singapore property agents dominate access to these information. And will they share these information with you?
Mostly not! Many agents with their “potong jalan” grab all mentality will not think of long term. They will leave the best for themselves and give you the scraps.
If they call you and tell you it’s a good deal, that’s because they don’t find it good enough, else they or their families will have already bought it.
Genuine property buyers will have to pay more
Of course you as genuine property buyer, if you like the development, not only you have to pay the developer’s already high asking prices, you will also have to suffer paying easily 5 to 15% more because of these Singapore property speculators if you really like the condo.
Property agents Convince property buyers that valuation can be matched
Property agents convince property buyers that bank’s home loan is obtainable as valuation can be matched when in fact there is no such thing.
After paying the 1% deposit for an option to purchase, the property buyer is stuck.
So how much did the Singapore property agents make from you?
Purchase price = $850,000
(Only a few banks can match as it is too high valuation)
Speculator buys at $850,000 and puts it up again at $920,000
(within days).
Property agents - how how does it cost them to speculate
$850,000 + $20,100 (Stamp duty) – $8,500 (1% commission for selling property) = $861,600.
Property agent flipper makes = $920,000 - $861,600 = $58,400.
This is the extra money you have to pay because of these property agents cornering the market and because banks refuse to raise valuations any higher.
Many people will fail to get a Singapore home loan and lose their 1% deposit. Luckily for some, they have come to us Property buyer mortgage consultants at SMS 9782 8606 to do an Approval in Principle for their potential purchase.
The EXTRA cash you have to pay because of Speculator property agents
$58,400 (extra) + $42,500 (5% cash) + $22,200 (Stamp duty) =
$123,100
Suddenly you are out of budget by $80,600.
Usually you can pay your stamp duty using the Central provident fund (CPF), but because for sub-sale, there may not be enough time to complete the transaction and insufficient time for your lawyers to work with the CPF lawyers to disburse the funds. Instead of using your central provident fund (CPF) to pay for your stamp duty, you will have to first pay it through cash.
Should I buy a Sub-sale unit?
It depends on how desperate you are to buy that property. There are more than 280,000 condominiums and private properties in Singapore. If you are patient you can always find another one as good, if not better.
Other articles: -
Singapore property investors
Singapore mortgage consultants
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