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DEAL NO DEAL DEAL NO DEAL

Property sellers keep changing minds as they hold out for more cash
He was all set to rent a unit in a condominium in the east.

And had already agreed on the rental amount set by the owner.

Then the owner changed his mind and wanted to sell it instead.

IT consultant Ryan Lim consulted his wife and they agreed on the asking price of $430,000.

But the owner changed his mind again. He decided not to sell after all.

Mr Lim, 32, said: ‘We were upset because I thought we had an agreement. He put us through so much trouble and wasted all our time and effort.’

The owner wanted to rent the unit out for $1,800, but Mr Lim decided not to take up the offer.

He said: ‘It’s a matter of principle. I refuse to deal with anyone who can’t keep their word.’

Mr Lim then found a 1,500 sq ft unit in that same development, and was willing to match the asking price of $550,000. But he said the seller upped the price to $570,000.

EXASPERATED

A similar-sized unit was sold for $485,000 last month.

He has given up on the second property and is now in discussion over a third one in the same estate.

Said an exasperated Mr Lim: ‘It’s really frustrating looking for a place now. It seems like the sellers are either not sincere about letting go of their place or they’re just plain greedy.’

In Mr Lim’s case, there was only a verbal agreement. So, legally, there’s nothing a buyer can do, property agents said.

However, industry watchers said that this take-it-or-leave-it attitude by the sellers has been frustrating buyers and property agents in the last couple of weeks.

Property agents whom The New Paper spoke to claim deals are now more difficult to close because sellers keep changing their prices and minds.

It’s reminiscent of the run-up to the property peak in 1996, although this time, the phenomenon seems more rampant, they said.

This is happening not just in private properties in prime districts 9, 10 and 11, but those in the suburban areas as well.

So are sellers getting more greedy and unrealistic went it comes to pricing their units?

Property agent Sally Kong said she encountered three such sellers in a week earlier this month.

She said: ‘Even though I had willing buyers, the owners suddenly increased their asking prices. It frustrates the buyers and also agents who can’t close the deals.

‘In one case, I had already received the buyer’s cheque and was doing the paper work when the seller called and said, ‘My heart was beating very fast this morning. I think God is telling me that I should wait for a month later and then sell’. Can you imagine that?’

ERA assistant vice-president, Eugene Lim, described it as the ’shifting goal-post’ syndrome.

He explained: ‘We had one seller who increased his asking price without any rational reason. The agent asked the seller how he arrived at the new price and he said ‘because my brother said we can sell for this amount’.

‘It’s just ridiculous when people increase their prices based simply on emotions.’

Dennis Wee Properties director Chris Koh said: ‘The market is moving and these sellers know that. It could be greed stepping in. That’s why they keep increasing their prices. But there are also some who are just testing the market.’

Mr Eugene Lim warned that sellers should be realistic about their properties.

‘Every property has its own attributes such as location and ambience. You can’t read about the premium properties and just assume it applies to your place. Yes, the market may be doing well but you also have to be reasonable about your asking price.

‘The euphoria has created an unrealistic state of mind for some people.’

RECORD HIGH

En-bloc deals hit a record high of $6.38 billion up to 15 May this year, just 18 per cent shy of the $7.75 billion record achieved for the whole of last year, according to figures from Jones Lang LaSalle.

Housing loans by Singapore banks also reached $64.3 billion in March, the highest on record so far, according to a Business Times report earlier this week.

Meanwhile, in the HDB market, expatriates are also having problems getting a flat to rent due to a supply crunch and picky landlords, according to the Sunday Times.

One expatriate said that whenever he viewed flats, there would be at least 10 other expats viewing the same unit at the same time.

And these sellers also forget that they could sabotage their own deals with their unreasonable prices because it may not match the bank’s valuation.

For example, if the seller wants

$1.2 million for his place, but if the bank’s valuation is only $1 million and they’re willing to lend only that amount, the buyer will have to cough up the remaining $200,000 in cash.

Mr Eugene Lim said: ‘For those buying properties in the $1 to $2 million bracket, the bank’s valuation is very important. The buyers won’t pay too much above valuation unless the place has very good attributes. And most people still need bank loans to buy property.’

For one seller though, it’s just a waiting game for him.

Business development manager Roy Wee, 39, is now considering offers for his 1,130 sq ft condo unit in Serangoon.

The last transacted price was about $470,000 for a similar same unit last month and he is asking for about $500,000 now.

He said: ‘I’ve turned down a few offers because I believe prices will go up even more. I don’t mind waiting because it’s no loss to me.’
 
Source : The New Paper - 29 May 2007

In 2001, property agent Daniel Chua, 48, was offered $1.13 million for his 1,700 sq ft terrace house in Bedok.

It was a good price, he reckoned, considering that he paid $970,000 for the place in 1998.

A similar-sized unit near his place was sold for $750,000 in 2000.

Mr Chua thought he would never be able to recoup his losses.

But when the property market recovered briefly in 2001, he got the offer. But he wanted more for his freehold property.

He said: ‘I thought the person would pay $1.15 million so I asked for more. In the end, the buyer got angry with me and decided not to buy. I would have settled for $1.13 million and I really regretted opening my mouth.’

To make things worse, a neighbouring unit was sold for about $740,000 later that year.

Today, a wiser Mr Chua cautions against making unreasonable demands to buyers.

He said he’ll now consider offers above $1 million for his place, even though he’ll still suffer a loss after taking into account his bank interest of about $300,000, and the $180,000 he spent on renovation.

That is still lower than the $1.13 million he was offered six years ago.
 
Source : The New Paper - 29 May 2007

WHAT can a buyer do when he is given the roundabout by the seller?

He can’t do anything, property agents said.

So long as the seller has not received the buyer’s cheque (with the 1 per cent option fee) and signed the option to purchase agreement, the deal is not on.

This agreement usually provides buyers with an option period of two weeks to consider their prospective purchase.

Once the buyer exercises this option, a binding contract is entered into between the seller and buyer for the sale and purchase of the property.

In today’s sellers’ market, either you walk away from a potential bidding war and look elsewhere or you just have to meet the seller’s price, said property agents.

Dennis Wee Properties director Chris Koh said: ‘In this case, the buyer is basically at the mercy of the seller. The buyer has to move quickly and offer more to seal the deal. There’s no point negotiating.

‘If you don’t have the option to purchase agreement, there’s no deal.’

But once the seller signs the agreement, the deal has to go through.

If the seller changes his mind, the buyer can sue for the transaction to go through or claim for damages, said MrKoh.

For instance, if the seller changes his mind about selling his $1 million property, the buyer can buy a similar unit for $1.1 million and try to sue the seller for the difference.

Source : The New Paper - 29 May 2007

The obstacles that young Singaporeans face when trying to buy their first home

After getting married in November last year, my wife and I have been trying in vain to buy a flat. We have applied to a walk-in selection once and balloting twice. All attempts have been unsuccessful.

At the same time, we have turned to the open market as an alternative. Resale flats are aplenty and we are well able to finance the housing loan for a four-room flat as certified by the Housing and Development Board’s (HDB’s) loan eligibility letter.

However, none of the units we prefer are within our reach as many homeowners in the open market are asking for large amounts of cash above the evaluation price for their flat. This cash portion typically ranges from $10,000 to $40,000.

As a young couple starting a new life together, this is a major obstacle to us owning a home.

Currently, the HDB does provide some help in terms of a housing subsidy of $30,000 for first-time applicants of open market flats, and we are grateful for that. However, this can only be applied to the evaluation price. With slim chances in balloting, and no ready cash for the open market units, we are left with no other options.

With the Government encouraging young Singaporeans to start a family early, could the HDB allow couples who are planning for marriage, or are already married, to utilise the $30,000 first-timer housing subsidy to cover for the cash portion above the evaluation price of the flat? Or would it be possible to allow the housing loan to cover both the cash portion as well as the evaluation price of the flat?

I hope HDB and the relevant authorities can look into this area and provide a solution, which I believe would benefit many young Singaporeans who are planning to start a family.

Letter from Alex Lim Kwang Hai 

Source : Today - 29 May 2007

Let it not be said that Singapore is behind on any of the latest property trends.

Hotel Asia, which will be redeveloped into a 30-storey luxury condominium, will have private car-parking in each unit, the most recent fad in luxury high-rise homes. The price is around $4,000 psf.

Hotel Asia Project

A new entrant to the Singapore market, Hayden Properties, bought Hotel Asia from the Ascott Group only in February for $147 million.

Ascott in turn bought Hotel Asia in July 2005 for $108 million, including $4.3 million for the hotel management company.

Hayden Properties is a joint venture set up in October 2006 between Singapore-based KOP Capital Pte Ltd (previously known as Koh Ong & Partners Management Services) and Emirates Tarian Pte Ltd.

Hayden Properties will also redevelop Horizon View in Cairnhill. Horizon View was acquired through a collective sale for $113 million in October 2006. Details are expected soon.

There is no name yet for the Hotel Asia project, although the development could be launched as early as the end of this year.

Hayden Properties director Leny Suparman said that the project would be the world’s tallest development with integral car porches. The property will have 54 condominium units and two penthouses. Units will have an average of two car porches and additional basement car park space.

The architect for the new development is Singapore firm Eco.id Architect and Design Consultancy which recently won the Best Design and Architecture Award 2007 for Starwood Group’s W Retreat & Spa on Fesdu Island in the Maldives.

Emirates Tarian is a subsidiary investment company of the Emirates Investment Group (EIG) which has other real estate investments including Palazzo Versace Gold Coast, Palazzo Versace Dubai and Emirates Financial Towers.

In an interview late last year, EIG chairman Sheikh Tariq bin Faisal Al Qassimi said that it was at a ‘crucial stage’ of discussions to conclude an investment here, estimated to be in the region of at least $1 billion. Sources had said then that it could be an ultra-luxurious Versace hotel.

Source :  Business Times - 29 May 2007