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21-03-14, 14:52
http://www.straitstimes.com/archive/friday/premium/singapore/story/buyers-and-sellers-starting-go-past-transactions-20140314
Buyers and sellers starting to go by past transactions
Few plan to get private valuations as they may be different from HDB's
Published on Mar 14, 2014
By Janice Heng And Rachel Au-Yong
DESPITE uncertainty over the new Housing Board resale process, buyers and sellers are adapting to the practice of looking at past transactions rather than valuations, said property agents.
Few intend to get private valuations ahead of the official HDB valuation, they added.
Negotiations used to begin with the HDB valuation report, before buyers and sellers haggled over a premium or cash over valuation (COV).
Now, buyers can get that report only after a price has been agreed. The fear is that the valuation may be lower than expected, meaning a surprisingly high COV.
Backing out comes with a price, as buyers must pay both for the option to purchase - which can cost up to $1,000 - as well as the valuation, noted Dennis Wee Realty agent Thomas Hee.
Sellers, meanwhile, fear selling themselves short, said Dennis Wee Realty agent Kelly Lin.
"They are very realistic now, but some are wondering if they are being 'too realistic' and settling for less than they could get."
Yet few buyers or sellers are considering unofficial valuations as a substitute, said agents.
One reason might be ignorance of that option. Mr Francis Cheng, for instance, wrote in to The Straits Times Forum to ask if buyers or sellers can still get a private valuation before deciding a price.
The answer is yes. Still, this may not be worth it, said agents.
Private valuations may inadvertently give sellers and buyers false hope, said ERA Realty agent J.A. Goh. "If the private valuation turns out to be very different from the HDB's, there can be a lot of disappointment," he said.
Why pay thousands of dollars for private valuations when you can rely on past transactions and your agent for an estimate, asked PropNex agent Marcus Luah.
"In mature estates, we'll always be within $5,000 range of the final valuation. It's about $20,000 in non-mature ones, depending on the unit's characteristics," he said.
Furthermore, buyers looking at non-mature estates have little to worry about, as prices there are now often close to valuations.
If HDB valuations follow the trend in the private property market, even buyers of choice units may not have to fear being surprised by a high COV, said agents.
PropNex Realty agent Abdul Aziz Aziz is handling units in Telok Blangah, where COVs were hitting $50,000 to $60,000.
But he has told his sellers that they cannot expect a high premium now. "The valuation will probably be closer to the last transacted prices," he said.
If valuations take a cue from past prices, previous high COVs will, in effect, be incorporated.
Meanwhile, some agents are hoping that HDB-approved valuers will be flexible.
"I hope that as long as the agreed price comes within 10 per cent to 20 per cent of the valuer's initial estimate, they will try to match the agreed price," said Dennis Wee Realty agent Dennis Foo.
"Otherwise, if they give a low valuation, things could be difficult. We'll probably see a lot more people forfeiting their options."
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Buyers and sellers starting to go by past transactions
Few plan to get private valuations as they may be different from HDB's
Published on Mar 14, 2014
By Janice Heng And Rachel Au-Yong
DESPITE uncertainty over the new Housing Board resale process, buyers and sellers are adapting to the practice of looking at past transactions rather than valuations, said property agents.
Few intend to get private valuations ahead of the official HDB valuation, they added.
Negotiations used to begin with the HDB valuation report, before buyers and sellers haggled over a premium or cash over valuation (COV).
Now, buyers can get that report only after a price has been agreed. The fear is that the valuation may be lower than expected, meaning a surprisingly high COV.
Backing out comes with a price, as buyers must pay both for the option to purchase - which can cost up to $1,000 - as well as the valuation, noted Dennis Wee Realty agent Thomas Hee.
Sellers, meanwhile, fear selling themselves short, said Dennis Wee Realty agent Kelly Lin.
"They are very realistic now, but some are wondering if they are being 'too realistic' and settling for less than they could get."
Yet few buyers or sellers are considering unofficial valuations as a substitute, said agents.
One reason might be ignorance of that option. Mr Francis Cheng, for instance, wrote in to The Straits Times Forum to ask if buyers or sellers can still get a private valuation before deciding a price.
The answer is yes. Still, this may not be worth it, said agents.
Private valuations may inadvertently give sellers and buyers false hope, said ERA Realty agent J.A. Goh. "If the private valuation turns out to be very different from the HDB's, there can be a lot of disappointment," he said.
Why pay thousands of dollars for private valuations when you can rely on past transactions and your agent for an estimate, asked PropNex agent Marcus Luah.
"In mature estates, we'll always be within $5,000 range of the final valuation. It's about $20,000 in non-mature ones, depending on the unit's characteristics," he said.
Furthermore, buyers looking at non-mature estates have little to worry about, as prices there are now often close to valuations.
If HDB valuations follow the trend in the private property market, even buyers of choice units may not have to fear being surprised by a high COV, said agents.
PropNex Realty agent Abdul Aziz Aziz is handling units in Telok Blangah, where COVs were hitting $50,000 to $60,000.
But he has told his sellers that they cannot expect a high premium now. "The valuation will probably be closer to the last transacted prices," he said.
If valuations take a cue from past prices, previous high COVs will, in effect, be incorporated.
Meanwhile, some agents are hoping that HDB-approved valuers will be flexible.
"I hope that as long as the agreed price comes within 10 per cent to 20 per cent of the valuer's initial estimate, they will try to match the agreed price," said Dennis Wee Realty agent Dennis Foo.
"Otherwise, if they give a low valuation, things could be difficult. We'll probably see a lot more people forfeiting their options."
[email protected]
[email protected]