I think what the new rule means is that the gov will determine the COV instead of letting it for the market to decide. The OTP can be $1, and then buyer/seller can get a valuation. If they disagree with the valuation/COV, seller wastes 21 days and buyer wastes $1. Am I right?
(12-03-2014, 01:26 PM)cif5000 Wrote: [ -> ]I think what the new rule means is that the gov will determine the COV instead of letting it for the market to decide. The OTP can be $1, and then buyer/seller can get a valuation. If they disagree with the valuation/COV, seller wastes 21 days and buyer wastes $1. Am I right?
For HDB, OTP is prescribed as $1k, on a standardised contract provided by them (serial numbered). Sellers can't back out once OTP is granted, if the buyer chooses to exercise. But one get-around is a very high OTP price, followed by a request for valuation, and see what number comes back one week later. Based on new valuation if buyer still can do both parties then negotiate a new price and wait out the existing OTP and sign a new one to consummate the transaction. For protection seller can offer to make good buyer's OTP fee for the first round - although I am sure that this will soon be made illegal by the government (among other secondary things related to this measure). One possible deterrent will be to use a random number generator to redo a second valuation for an OTP between the seller and the same buyer. That will seriously screw with people's mind and get them to make conservative offers. Hey, psyco ma!
As for the rest of the comments elsewhere I rest my case. Bo eng la!
(12-03-2014, 12:32 PM)Temperament Wrote: [ -> ]It seems as far as valuation report is concerned, the 2nd, 3rd is always getting lesser and lesser not more.
(12-03-2014, 12:56 PM)Temperament Wrote: [ -> ]i think it's generally true in every type of market in relative terms, because HDB flats are 99 years LH.
You mean the lower valuation is to account for the reduction in remaining lease, ceteris paribus?
If the 2nd valuation are done soon after the 1st expired, it is likely true that all other factors indeed remained the same.
(12-03-2014, 01:52 PM)wsreader Wrote: [ -> ] (12-03-2014, 12:32 PM)Temperament Wrote: [ -> ]It seems as far as valuation report is concerned, the 2nd, 3rd is always getting lesser and lesser not more.
(12-03-2014, 12:56 PM)Temperament Wrote: [ -> ]i think it's generally true in every type of market in relative terms, because HDB flats are 99 years LH.
You mean the lower valuation is to account for the reduction in remaining lease, ceteris paribus?
If the 2nd valuation are done soon after the 1st expired, it is likely true that all other factors indeed remained the same.
Yes! You are right. Most HDB sellers are serious about selling and not Tikam, Tikam the market. IMHO. If you Tikam, you will soon find out how evaluation works against you.
(12-03-2014, 01:52 PM)wsreader Wrote: [ -> ] (12-03-2014, 12:32 PM)Temperament Wrote: [ -> ]It seems as far as valuation report is concerned, the 2nd, 3rd is always getting lesser and lesser not more.
(12-03-2014, 12:56 PM)Temperament Wrote: [ -> ]i think it's generally true in every type of market in relative terms, because HDB flats are 99 years LH.
You mean the lower valuation is to account for the reduction in remaining lease, ceteris paribus?
If the 2nd valuation are done soon after the 1st expired, it is likely true that all other factors indeed remained the same.
age and tenure are some of the factors which might affect valuation. but for temperament case, i guess it is more likely that there is time gap between these valuation reports and the price is softening between the 1st and later reports. For e.g. if you did 2 valuation reports 5 months apart, the first report in Nov 2013 and the second report in Mar 2014, the transacted price in Nov 2013 then was higher hence valuation for the 1st report would have been higher in Nov 2013. on the other hand, in a uptrending mkt, the later valuation report (some time gap) should fetch high valuation. if the valuation is done at the same time, the valuations done by different valuers can be different as valuation have some form of subjectivity but still the difference would be very small.
i can share with you all a valuation template if you all are keen.
So far, believe Khaw is one of the few who dare to implement new measures , dare to rock the boat. Believe he is doing his best for the housing issues since his took office less than 3 years ago. Wish more will work like him.
(12-03-2014, 04:11 PM)lvpierre Wrote: [ -> ]... time gap between these valuation reports and the price is softening between the 1st and later reports. For e.g. if you did 2 valuation reports 5 months apart, the first report in Nov 2013 and the second report in Mar 2014, the transacted price in Nov 2013 then was higher hence valuation for the 1st report would have been higher in Nov 2013. on the other hand, in a uptrending mkt, the later valuation report (some time gap) should fetch high valuation.
Excellent points by lv.
If I may extend lv's logic into Monday's changes:
Bishan/Redhill (demand > supply) -> last few month having +ve COV -> higher registered price
resulting: escalated valuation price.
vs
ulu ulu HDB (supply > demand) -> last few month -ve COV -> lower registered price
resulting: accelerated lower valuation price
I have a need for speed...why lay?
SG50 and then GE16...
Love Compassion
(12-03-2014, 01:48 PM)thefarside Wrote: [ -> ]For HDB, OTP is prescribed as $1k, on a standardised contract provided by them (serial numbered). Sellers can't back out once OTP is granted, if the buyer chooses to exercise. But one get-around is a very high OTP price, followed by a request for valuation, and see what number comes back one week later. Based on new valuation if buyer still can do both parties then negotiate a new price and wait out the existing OTP and sign a new one to consummate the transaction. For protection seller can offer to make good buyer's OTP fee for the first round - although I am sure that this will soon be made illegal by the government (among other secondary things related to this measure). One possible deterrent will be to use a random number generator to redo a second valuation for an OTP between the seller and the same buyer.
Hi, thefarside, peggyback on your post on some points on Monday's changes:
1. Valuation report is tie to the OTP. If the OTP expired, then the valuation is no longer valid. After OTP expiry, same buyer/seller will still need to request for a new valuation report.
2. Seller can not request for valuation report
3. The valuation report is for the buyer view only (even the seller agent will not have a chance to see the valuation report). Buyer will access thru HDB e-services website by logging on using his singpass.
4. Once seller make an offer, aka given the OTP, he will need to wait 21 days before he can give another OTP.
5. Likewise, the buyer will need to wait-out 21 days before he can register to submit another valuation report (same or different ppty)
*** my comments:
if the seller is selling ulu ulu place, then I doubt that he wanted to play the wait 21 days game with the buyer.
every 21 days in a accelerated downward valuation price will be very painful.
Love Compassion
(12-03-2014, 08:58 AM)thefarside Wrote: [ -> ] (12-03-2014, 12:35 AM)DP28 Wrote: [ -> ]Think about it in this way. When COV was transacting at 50-100k price above valuation, people are complaining its unaffordable yet some cave in. When COV comes to zero, people still complaint price is too high. IMO, HDB owns set of valuation is high, but they cannot admit to this. Thus, they reverse it to let market dictate the valuation before publishing. In this way, if prices drop it has nothing to be blame on HDB fault.. KBW is genius in my opinion.
At the risk of sounding like a motherhood statement-maker, I will say that
1) no one is coerced to buy a flat at 100k above valuation. It is a willing buyer-willing seller transaction.
2) the market-clearing prices (i.e. the resale prices posted on HDB website, not the valuations) represent where affordability and demand meets the supply. Those prices, until 6 months ago, were way above the valuation levels. Now, for about half of the districts, and mostly non-mature ones, they are below valuation. For those who don't remember, those COVs, or CUVs in some cases, were very stable for quite a few years until the incompetent management of immigration and housing supply spawned a cocktail of reactionary administrative measures to "patch up" things until they (the lagging government) can catch up.
3) a vast majority of people I have relations with to have said that the property(ies) they are after (landed, condo, HDB) are expensive. Nobody has said things are cheap. Nobody in Singapore ever says things are cheap, unless they go to Malaysia then everyone in the hypermart would know who the Singaporeans are
4) government cannot (and should not) attempt to save all the idiots from themselves. Cash allocation to many people is whether they can afford installments. Not everyone can be a guru, and I think that is a good thing. Otherwise, who can be THE real gurus?
5) I can accept this change if HDB were to let go of their control of the valuation process, and let the bank / valuer work out the valuations for themselves, just like private market. If the buyer wants to take HDB loan, then they can jolly well submit themselves to whatever machinations that HDB has for flat valuations
6) I have a vested interest in this because I will be a seller too someday. I can't understand why I am not allowed to take out a valuation on my own property if I so wish. This kind of nannying beggars belief, considering there are so many other things that they are already doing to manage the housing market.
That was actually what I was referring to your pt 5. By letting buyer and seller agreed on the price before valuation, HDB becomes a price taker then depending on the consideration agreed, they will then assess if the matched price is "right". In this case, This becomes a reverse inquiry rather than "offering" a valuation + whatever COV. By doing so, they are actually letting the market dictate the valuation.
My grandparents resides 4Rm HDB in Tiong Bahru area for the longest time since 1970s. In 2008 She was offered CERS and valued her aged property at $280K. (This means, if you do not agree, they buyout your house out at $280K and you can use the money to buy another property else where, those illiterate who didn't exercise I am so sorry for them). In today's term or 2011 if I don't recall wrongly, a brand new 4RM flat from that area (if you are lucky to be balloted) HDB is pricing at $550K +/-. Resale is going for $780K..
$280K - $550K - $780K.. over a span of 6 years..Which is the right valuation? You tell me..
They have been the one feeding the prices to the market.. Buyers and sellers take that as a benchmark and pay a premium (COV) to the valuation.. Without that benchmark, if valuation falls whether due poor property outlook sentiment or interest rate, you can no longer blame HDB as they are no longer the one who dictate the "valuation" anymore. I am just an average joe who cannot afford your million dollar Bishan flat..For those who took the plunge, I just hope the property market turn out right for you.