ValueBuddies.com : Value Investing Forum - Singapore, Hong Kong, U.S.

ST Forum - 13/3/14

There are 3 articles and all 3 writers are very concern on Monday's changes:

1. Be cautious with new rules on flats

2. Sellers at a disadvantage

3. Many uncertainties with new system

***** my thought
Q: Can seller get valuation from private company?
- I think should be ok. The restriction only applies to HDB valuator. However, the private Valuation Report most likely will be ignored by the buyer.

Q: if the valuation is lower than agreed-on price, can the seller ask the buyer to top up the difference in cash?
- I think the agreed-on price is contractual and its final. There is no need to ask the buyer again.

Q: Can the buyer back out of the deal?
- I don't think so. However, buyer can always choose to let the OTP expire after 21 days (new)

Q: Even private ppty buyers and sellers get indicative valuation, so why do HDB home buyers and sellers have to guess at the expected valuation when committing to a price?
- Definitely, the seller can no longer get the exact valuation report from HDB directly. He should still be able to get indicative valuation from private valuer. This, however, will not serve the purpose for the buyer.

Q: If the actual valuation were to have a high COV which is not in favour of buyers, buyers can choose not to exercise the OTP. But, what's the recourse for sellers?
- Seller got to forfeit the option $.

Q: Many may have to walk away from the deal and forgo the option $. I hope the new system can be tweaked to allow valuation to take place before OTP
- I don't know what to say. I imagine that the valuation of HDB will quickly
move up(for those flats in high demand to reflect the currently lagging valuation)
or move down(for those cheap flat seller still clinching on a extremely high valuation report).
Once the valuation reflected the market price accurately, the number of OTP expiration will be lesser.

Love Compassion



A Life not Reflected is a Life not Worth Living.

The risks of forfeiting the OTP is over stated. In the current state of the property market where the transacted price is about a few k around the valuation, this should not be such a big concern. If this rule is implemented during the days when COV is >$30k, then I agree that the risk is high.

Make sense.

Existing seller (in ulu ulu area) who hold a valid Valuation report will need to be more concern.
If our deduction is correct, very soon, their old VR will get obsoleted by daily registered deals.
So, instead of looking at their old VR, seller should look at the market price for a better guide.

Also, buyers (after signing OTP) will likely let the option expired...
because the valuation is getting worst and worst...

(note: the reverse is true for HDB flats in demand. their valuation price will escalate fast.)

Love Compassion


A Life not Reflected is a Life not Worth Living.

(13-03-2014, 11:23 AM)chialc88 Wrote: [ -> ]Make sense.

Existing seller (in ulu ulu area) who hold a valid Valuation report will need to be more concern.
If our deduction is correct, very soon, their old VR will get obsoleted by daily registered deals.
So, instead of looking at their old VR, seller should look at the market price for a better guide.

Also, buyers (after signing OTP) will likely let the option expired...
because the valuation is getting worst and worst...

(note: the reverse is true for HDB flats in demand. their valuation price will escalate fast.)

Love Compassion


A Life not Reflected is a Life not Worth Living.

how to identify those hdb flats in demand?

yes, very tricky indeed...

Quick action makes short work of HDB market woes (ST 15.3)

Look at how decisively Mr KBW axes the two-decade old COV system this week-w/o any angst, and in just 3 paragraphs if his speech.

Now that ppty prices have tentatively turn south, this half of the battle calls for a different type of skill and care.

Lets hope he and his officers will again be equal to the task.

Love Compassion


A Life not Reflected is a Life not Worth Living.

As part of less focus on COV, HDB advertisements should not refers to either valuation price or COV.
eg. '$60K below valuation!'
or '-ve COV' or 'zero COV'

Note: CEA hired headcount to read/vet classified ads everyday.

Love Compassion

Ads must not refers to HDB flat's valuation, agent reminded - ST 12.5.2014 Cheryl Ong

CEA recently advised the heads of property firms here that advertising efforts must not refer to the actual valuation of the flat.
Only reference to sellers asking price should be mentioned.

Tuition teacher Yew Kai Ling, 26, who has been looking for a resale flat for 2 months, said the process has become "more like a game of chance".
"But it is more beneficial for the buyer since there is less focus on COVs, so the sellers don't bargain with a cash profit in mind."

Love Compassion


A Life not Reflected is a Life not Worth Living.

One of my favorite blogger published his 3 rules to property affordability.

I think it's a pointers to new property buyers.
His rules is applicable not just here but also everywhere around the world.

I would recommend to use his 3 rules as a starts in pursuits of you property dream:


Read his full article here.

Love Compassion

Rule 2 highly dependent on the loan period and interest rate.
At abnormally low interest rates, what is prudent may be overstretching
when interest rates rises.

(17-06-2014, 10:49 AM)chialc Wrote: [ -> ]One of my favorite blogger published his 3 rules to property affordability.

I think it's a pointers to new property buyers.
His rules is applicable not just here but also everywhere around the world.

I would recommend to use his 3 rules as a starts in pursuits of you property dream:


Read his full article here.

Love Compassion

(17-06-2014, 11:35 AM)opmi Wrote: [ -> ]Rule 2 highly dependent on the loan period and interest rate.
At abnormally low interest rates, what is prudent may be overstretching when interest rates rises.

opmi,
I think all these 3 rules must be applied concurrently and not separately.

Each one of us has our unique circumstances and risk profiles which might make or break the 3 rules.

I just thought these 3 rules are sound and will definitely recommend using it as a starting point for a new journey into property.

Love Compassion