KHAW CONFIRMS VALUE OF HDB FLATS WILL BE ZERO AT END OF 99-YEAR LEASE

[grubb]

Question 1: who is the end-approver of ALL HDB valuations issued by these so called market valuers?

Question 2: does this end-approver has the desire to stuff people who are trying to sell their flats in this market?

1: it has to be signed by a qualified valuer. The valuation is just a guide for banks to determine loan (for resale flats), individuals looking to get a sense of the property value and institionals (e.g reits). For individuals buying a flats, the transacted price is usually based on the buyers/ sellers negotiation skills and generally mkt condition. It can be above or below valuation. If the final price is well above the valuation price, the buyer may hv a problem to get the loan amount above valuation from bank ( bank may not be willing to loan more than that) and have to cough out with more cash.
2: don't understand your question. But generally they wouldn't try to con people. Banks, hdb usually have a list of qualified valuation firms. Bankers usually give a call to valuers to get an indication, some valuation firms may be willing to match the figure given by the banker but ultimately there are still limitations, e.g. Values must be justified and for residentials, you have find a few comparables properties (same area and transacted recently and adjust accordingly, floor, tenure, view, size etc)to justify the value. If all the recently transacted prices are going down, then the valuation would have to come down.

For question 2, from what I understand for private property, the valuer whose valuation is used by the bank for disbursing the loan will be paid a flat fee (I was told $500). So these valuers have an incentive to justify the highest valuation possible since this is what the banks want, i.e. disburse more money to make more interest.

Is my information correct? I hope its not the same for HDB.