Free advice/discussion on buy/sell of Resale flat (Part 5)

vinz

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I have a friend selling his 5 room for 390K (60K below evaluation). He is not asking for any cash. My questions are:

- Is it correct that the deposit is 10% and out of it, 5% is have to be solid cash?
If using HDB loan, then the full 10% can be using CPF.

If taking BANK LOAN, then the 10% is broken down into (5% complusory cash + 5% CPF/Cash)

Of course you have to standby some cash for the cash deposit to be paid to the seller when u commit to the house. Best is to prepare between $2k-$5k cash. This portion can be negoitated with the seller depending on your sincerity.

- if so and i am to purchase, how much solid cash i have to stand by to take over the flat?
If bank loan then 5% complusory cash.

If HDB loan, then maybe just around $500 or so for the legal fees.
 

vinz

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I(Buyer) have already got 1st appt going on April. Seller and me have a mutual agreement to hand over the flat to me latest by July. my Seller has already paid $2000 for a flat that she wants without OTP.

scenario, her Seller's house is under deceased mother's name and the process of transfer of ownership take about a year. Not really sure about this, Vinz u have any idea?
Depends any WILL done, adminstrator is who blah blah blah.. Will take some time to settle all these.
Now my Seller wants to delay until Dec 31st to hand the flat over to me. Does the Seller has any say or authority when to hand over the keys ? I really want the flat and will not give up.
Once u go through the 2nd appt, u become the OFFICIAL owner, seller got no way to say anything since its your house already.

It is up to you whether you want to allow them to stay or not.
If not just call police and report trepassing.

Can I get monies from Seller from July to Dec?
Can I rent out one room?
Money July to dec for wat? rental?
U can rent out one room. dont have to report to HDB.

But if u rent out the whole house, u must check whether you eligible or not before u do that,
most likely since you are a new owner, you will not be eligible.

Just note. seller can still back out of the deal now if both of you had not gone through the two HDB appts. So either you wait till its over to push them out, or u better settle everything clearly with them now and see whether you want to stop the whole process. Getting back your deposit might be a problem i think.

U dont have any agent handling this for you?

Good luck.
Vinz
 

siriusb

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Depends any WILL done, adminstrator is who blah blah blah.. Will take some time to settle all these. Once u go through the 2nd appt, u become the OFFICIAL owner, seller got no way to say anything since its your house already.

It is up to you whether you want to allow them to stay or not.
If not just call police and report trepassing.

Money July to dec for wat? rental?
U can rent out one room. dont have to report to HDB.

But if u rent out the whole house, u must check whether you eligible or not before u do that,
most likely since you are a new owner, you will not be eligible.

Just note. seller can still back out of the deal now if both of you had not gone through the two HDB appts. So either you wait till its over to push them out, or u better settle everything clearly with them now and see whether you want to stop the whole process. Getting back your deposit might be a problem i think.

U dont have any agent handling this for you?

Good luck.
Vinz
Hi, Vinz

Thanks for your advice.

Heeding your advice, think i will agree to whatever the Seller wants right now.

If seller backs out, what happen to my deposit? No penalties for Seller?

Seller said that she will get a lawyer to write a letter to state that i am willing to let her hand over the flat on Dec. Is this process possible?

No agents.
 
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vinz

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If seller backs out, what happen to my deposit? No penalties for Seller?
U can sue them to get back the deposit if they are the one intiatating the back out. (suing them equal to wasting time and effort)
Seller said that she will get a lawyer to write a letter to state that i am willing to let her hand over the flat on Dec. Is this process possible?

No agents.
I think because of the fact that there is no agent, each of u do not understand the legal obligation and limitation to what you can or cannot do.

The seller thought that if you don't agree to their demands, they can just back out and don't sell to you which is not how it goes.

I am not sure what type of letter the lawyer is going to draft out, if its a rental agreement for the whole unit, then u as the buyer must meets the eligiblity to rent out criterias etc (which you might not be)

Of course lawyers being lawyers, they will definitely work to protect the best interests of their client. It's up to you whether you want to sign or not. Maybe you should start seeking legal advise since you are constantly being threaten by the seller.
 
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siriusb

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U can sue them to get back the deposit if they are the one intiatating the back out. (suing them equal to wasting time and effort)I think because of the fact that there is no agent, each of u do not understand the legal obligation and limitation to what you can or cannot do.

The seller thought that if you don't agree to their demands, they can just back out and don't sell to you which is not how it goes.

I am not sure what type of letter the lawyer is going to draft out, if its a rental agreement for the whole unit, then u as the buyer must meets the eligiblity to rent out criterias etc (which you might not be)

Of course lawyers being lawyers, they will definitely work to protect the best interests of their client. It's up to you whether you want to sign or not. Maybe you should start seeking legal advise since you are constantly being threaten by the it.


The Seller has willingly offer to return the deposit if she back out.

Not sure what the lawyer will draft, just wait and see. I will of course seek legal advise if needed.
 

hiphiphoray

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Hi Vinz

Appreciate your input here.

I just got bank loan approval for 80%(400k) of costs of a resale flat value abt 500k, asking for 10k COV. Balance 100k aka 20% is 15% CPF, 5% cash right ? Me & wife CPF got abt 70k. The 5k shortfall how ? I have to make up ith cash ? This part have to be verified when ? 1st appointment ?


Once i get the above sorted out, i will have to put a 1k deposit for the flat right ? 14 days later,put 4k to exercise the option of purchase. At this point time, how long can i delay so that i can sell my flat and get the sale proceeds? I will have abt 60k after deducting the CPF return/interest incur + outstanding loan.

My sellers com when to pay her ? Can delay until i get the monies first ? Then the other side for the seller side there is this 10k COV. When do i pay up ? Thier seller agent will charge me 1% too right ? can i dont pay or delay paying ?
 
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vinz

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I just got bank loan approval for 80%(400k) of costs of a resale flat value abt 500k, asking for 10k COV. Balance 100k aka 20% is 15% CPF, 5% cash right ?
Yes correct.

Me & wife CPF got abt 70k. The 5k shortfall how ? I have to make up with cash ?
Yes, any short fall is expected to be top up with cash. If you have gotten a bank loan by now, i believe your agent or the banker will already had worked out all these and explain it to you, how come you are still not sure?

Anyway your shortfall will be more than 5k, because u have not factor in the stamp and legal fees ( around $10,000+ for a 510k home)
This part have to be verified when ? 1st appointment ?
There is nothing to be verified, all these calculation should be in your letter of offer from bank. If taking bank loan, i believe the lawyer will expect payment of all outstanding cash to be paid at least two weeks before the 2nd appt.

Once i get the above sorted out, i will have to put a 1k deposit for the flat right ? 14 days later,put 4k to exercise the option of purchase.
1k + 4k is negotiable. Minimum is $1 + $1, still a legally binding agreement. But of course I dont think the seller would just want $2 as deposit.

At this point time, how long can i delay so that i can sell my flat and get the sale proceeds? I will have abt 60k after deducting the CPF return/interest incur + outstanding loan.
Depends on how long u and seller agreed upon, this date will be stated on page 4 of the OTP.

My sellers com when to pay her ? Can delay until i get the monies first ? Then the other side for the seller side there is this 10k COV. When do i pay up ?
I dont think you had bought any house or get any bank loan, if u are asking those above questions. Maybe u had just gotten the in-prinicipal approval to ok you to loan from bank, correct me if i am wrong?

All the COV had to be settled via the lawyer, as wat i had stated above, the cash portion have to be FULLY paid to the lawyer at least two weeks before your 2nd appt (completion appt).
Their seller agent will charge me 1% too right ? can i dont pay or delay paying ?
You dont seems to know the procedure at all. I think it is only right you pay whoever it is that render their service to you.
 

Pools15

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Levy fee

Hi Vinz,

How much is the levy fee if a single intend to sell a 4rm flat(NEW) and buying 5rm flat?Any additition grant?Any other thing else i need to know?

Also would like to check how much usually the agent would charge if u wanted to rent a room.
 
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hiphiphoray

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Ya....the more i read of the rules & regulations, the more blur i become. -_-.

My situation is like this. I just put up my house for sale. Valuation out and ad was put up on saturday. Im pretty sure i'll be able to sell @ valuation wihin 1 month. 2 potential buyer came and went, nothing happen. So i go view a number of flats and saw one i like vey much. Abt 500k, asking for 15k. Fully renovated, 100% move in condition. Got a owner offer 8k to owner, but verbal only, no deposit. I told agent i offer 10k, but have to wait until i sell my house first. Agent instis i put 1k to offer owner first, then talk abt my requirement, oresle he wont even inform to owner of my offer. Of course i rejected it. If i put in 1k, and the owner dont agree, my 1k will be gone right ? I will have no room for nego.

How do i go abt to secure this house and delay until i sold my house and get the proceeds ( i assume will take abt 3-6mths). So that i can easily fund whatever cash part for buying the house. How do i confirm this house and still drag it for say 6mths ? I think if we follow HDB commented procedure, its impossible.

In short i wana to secure this house now and use the proceeds(abt 60+k) from my house sale to fund it. Cos there is just too much cash components involve if i buy first.
 
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vinz

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My situation is like this. I just put up my house for sale. Valuation out and ad was put up on saturday. Im pretty sure i'll be able to sell @ valuation wihin 1 month. 2 potential buyer came and went, nothing happen.
Why are u so sure? If your valuation is on the high side as compare to others, even if you want to sell at valuation now, there might not be takers. If it's so easy to sell off your house, then you would had sold if off within a day or two.

If i put in 1k, and the owner dont agree, my 1k will be gone right ? I will have no room for nego.
If the seller does not accept your offer of 10k (with deposit 1k given upfront), then you have the right to take back your 1k. You can just write behind on the cheque that the offer to purchase price is 510k and this cheque is only valid if the purchase price is that amount. Please dont be so worried the agent or the seller will eat your 1k. U can write a postdated cheque and make sure all the documents is signed before that date for the purchase.

How do i go abt to secure this house and delay until i sold my house and get the proceeds ( i assume will take abt 3-6mths). So that i can easily fund whatever cash part for buying the house. How do i confirm this house and still drag it for say 6mths ? I think if we follow HDB commented procedure, its impossible.
Why do u need 6mths? seriously you do not know what you are doing, and my suggestion is to find an agent to meet up with you, maybe help you market your house in a proper manner and explain how you can go about doing all these "schedule date" properly without getting yourself homeless for a month or two.

vinz
 
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soilwork

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If using HDB loan, then the full 10% can be using CPF.

If taking BANK LOAN, then the 10% is broken down into (5% complusory cash + 5% CPF/Cash)

Of course you have to standby some cash for the cash deposit to be paid to the seller when u commit to the house. Best is to prepare between $2k-$5k cash. This portion can be negoitated with the seller depending on your sincerity.

If bank loan then 5% complusory cash.

If HDB loan, then maybe just around $500 or so for the legal fees.

Thank you very much for guiding me on this :) really appreciate it
 

hiphiphoray

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Oh ok. Selling/buying house is clearly not my cup of tea.

Your advises have been valuable. Thank you.
 

hiphiphoray

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Hi Vinz

Say after the sale of a house, the sale proceeds is insufficient to return all CPF interest incur. Do one need to top the shortfall in cash ?
 

henrylbh

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How do i go abt to secure this house and delay until i sold my house and get the proceeds ( i assume will take abt 3-6mths). So that i can easily fund whatever cash part for buying the house. How do i confirm this house and still drag it for say 6mths ? I think if we follow HDB commented procedure, its impossible.

In short i wana to secure this house now and use the proceeds(abt 60+k) from my house sale to fund it. Cos there is just too much cash components involve if i buy first.

The seller may also want to sell his house first and get the fund for his buying another house.

Ya....the more i read of the rules & regulations, the more blur i become. -_-.

You really need an agent. Since you are buying as well as selling, you can negotiate for lower commission.
 

henrylbh

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Hi Vinz

Say after the sale of a house, the sale proceeds is insufficient to return all CPF interest incur. Do one need to top the shortfall in cash ?


Same as selling shares at a loss, no need to top up even loss of principal amount.
 

meowcsj

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CAn someone justify my thought?

I always think that it is not not worth while to buy a resale hdb flat as they are much more expensive than bought from HDB directly.

For example,
My family bought a 5-room HDB flat in Jurong direct for $170k+$20k renovation + $10k furniture. Now, I saw a unit within the same block valued at $350k. Thus if factoring all the interest etc, one still get to pocket few grands from the sale.

But now if I were to buy that unit at $350k, I still need to a $10k renovation at least + $10k furniture. Next time, I will not be able to sell very high since the valuation should be arounf $350 - $400k range, thus factoring the interest & etc, I may incurr a loss if I buy a resale flat n sell it later.

Is the thinking correct?
Pls advise.
 

RIC1979

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Hi Vinz,
I read almost all (but not all) your posts. You’re sure one helpful guy. I have some questions I need to ask as this is the 1st I’m buying a resale flat.

I am looking for a flat in my parent’s area. (So I can get a 40k grant)Let say I am looking for a 4 Room flat valued at 435K. COV is 10K.

My questions goes,

1) Do I have to pay 10K cash to the owner? Or can I use CPF to pay HDB and HDB to pay for the owner?

2) Do I need to pay any monies to the Property agent that was engaged by the seller?

3) The property agent told me not to get the $40k grant as I would have to pay a levy of $60k if I have the intention to buy a new flat in future. Is it true?

4) I found this website http://services2.hdb.gov.sg/webapp/BB29FIN/BB29FINP.jsp to tabulate my monthly installments/cash come out per month. It is accurate?

Thank you Vinz
 

vinz

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For example,
My family bought a 5-room HDB flat in Jurong direct for $170k+$20k renovation + $10k furniture. Now, I saw a unit within the same block valued at $350k. Thus if factoring all the interest etc, one still get to pocket few grands from the sale.
Correct. This formula works the same for resale flat when u sell it off.

Anyway there is no more 5room direct from hdb at 170k anywhere in spore nowadays. the 170k u quoted is maybe 10yrs back.

And for a resale unit selling at 350k now, it might be for sale at just 250k 10yrs ago,
so the different in prices between a brand new and resale is maybe just 50k-100k (depends on location, market prices etc)
But now if I were to buy that unit at $350k, I still need to a $10k renovation at least + $10k furniture. Next time, I will not be able to sell very high since the valuation should be arounf $350 - $400k range, thus factoring the interest & etc, I may incurr a loss if I buy a resale flat n sell it later.
If you buy at the market price now, you should be able to make a slight profit 5-10yrs down the road. Of course if you buying an overpriced unit, then who knows when u are able to sell for a profit.
I always think that it is not not worth while to buy a resale hdb flat as they are much more expensive than bought from HDB directly
It will be good if its 10-20yrs ago. But since the HDB has change the pricing of the New HDB flat to be nearer the market prices of resale flat within the vincinity, i think the price different between a HDB resale and a new flat isnt that much anymore. (factoring in the fact that most resale flat buyers are 1st timer getting the 30-40k grant).

Please note there is no 1st timer grant (30-40k) for brand new flat

Pls note that a brand new flat is without the full set of kitchen cabinets, stove, sink, cookin hob etc,which easily can put u back by 10k+ just for the kitchen reno, whereas a resale flat already have all these.

vinz
 
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vinz

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I am looking for a flat in my parent’s area. (So I can get a 40k grant)Let say I am looking for a 4 Room flat valued at 435K. COV is 10K.

My questions goes,

1) Do I have to pay 10K cash to the owner? Or can I use CPF to pay HDB and HDB to pay for the owner?
COV = cash above valuation. So it must be in cash and nothing else. NO CPF allowed to be use for for this portion. Pay maximum of 5k as deposit to seller, and the remainding 5k is pay to HDB, HDB will calculate and issue a overall cash profit/proceeds to the seller.
2) Do I need to pay any monies to the Property agent that was engaged by the seller?
Usually yes, but up to you to discuss and nego with him/her how much you be paying.

3) The property agent told me not to get the $40k grant as I would have to pay a levy of $60k if I have the intention to buy a new flat in future. Is it true?
60k? Is he outdated or what?

In summary:
4-room = $40,000 resale levy
5-room = $45,000 resale levy
Executive Flat = $50,000 resale levy

Not sure where the $60k he quoted come from.

Click : Info on resale levy

Please note every Singaporean is entitled to taking HDB loan "twice" in our entire life.
And the 2nd HDB loan one of the criteria is that you must be "upgrading".
(eg. from 3rm to 4rm, or 4rm to 5rm etc)

4) I found this website http://services2.hdb.gov.sg/webapp/BB29FIN/BB29FINP.jsp to tabulate my monthly installments/cash come out per month. It is accurate?
Its from HDB , it should be very, very accurate.

Thank you Vinz
My pleasure..
 
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venomkillers

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Usually yes, but up to you to discuss and nego with him/her how much you be paying.


Hi Vinz,
Am i right to think the Seller Agent is only helping us to do the paper work?
Therefore, its the seller whos paying the 1% commission and we just pay a fee let say 1k for his help to settle the documents? Or its also 1% from us too?:s11:
 
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