Buyers Beware

Just to share something that happen to my friend. He signed an option to purchase recently to buy a condo. The owner was not around but everything was agreed via the agent who was in contact with the owner through the handphone. My friend signed the option and gave the cheque. The owner's agent promised to pass the owner signed copy back the following day.

The next day the agent came back to say that the owner doesnt want to sell - either having been convinced prices could rise further or otherwise. As the option letter was not signed by the owner and only VERBALLY agreed upon, apparently my friend cannot do anything.

Just a note to everyone that in this market, dont trust agents/sellers not to change their minds overnight. Get the option letter to be presigned or signed immediately.

If anybody knows of any type of recourse my friend can opt for, please let me know. I always thought a verbal agreement (in this came an agent acting on behalf of the seller) would stand but apparently it doesn't.

The purchaser does not need to sign the option to purchase. So I do not think it is an option at all. It is probably an offer to purchase at a particular price for the property and the owner is given a number of days to accept. If the owner refuses to accept the offer, the cheque is duly returned to the buyer and neither party has any claim against the other. My 2 cents.

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Originally Posted by Unregistered

The purchaser does not need to sign the option to purchase. So I do not think it is an option at all. It is probably an offer to purchase at a particular price for the property and the owner is given a number of days to accept. If the owner refuses to accept the offer, the cheque is duly returned to the buyer and neither party has any claim against the other. My 2 cents.

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To laymans: you make me an offer, I happy I accept, if not .....

My friend said he signed the pages to show that he had read the documents. It's an option to purchase. Thanks for comments.

I repeat, a buyer need not sign the option. If the option is valid and duly signed by the vendor, the buyer just need to bring the option to his solicitor and the seller cannot back out of the sale. The option will have the selling price stated very clearly. So, I am absolutely sure that it cannot be an option that is properly prepared. An unsigned option is just like a piece of paper which is not legally binding except when the vendor's signature is on it. So it just useless like a piece of tissue paper!!

Sorry I think I should have used the word "initial" rather than "signing" - he put his initials at the end of every page to signify having read the page..i think its a common thing to do for contracts.

Buyers do not initial or sign anything BEFORE seller has signed the purchase option. Unless the seller has signed the purchase option with a stated price, the paper is useless.

Normally a buyer makes a offer. It can be higher than the owner's asking price. If the seller accepts, the seller signs the purchase option paper and gives it to the potential buyer in return for a cheque in favour of the seller.

hmm.... is there a standard/documented process laid out somewhere? i recall putting in an offer (cheque included) and got my cheque returned. eventually, had agent to negotiate with seller's agent and finally price was agreed and then we issued cheque and rushed them to produce the option to purchase. but i was more fortunate. seller turned out to be an investing firm and not individual seller, so not so fickle minded.

wow, then seller agent must have really cocked up re the procedure i.e. collecting cheque, getting buyer to initial the pages on the option and only then going to get the seller's signature...

But then again, because housing agents are not regulated & thus, there are no requirements/exams to make sure they know their stuff thoroughly, and these things will continue to happen. I wish there was a thread here to showcase the shortcoming of such housing agents - without naming names - so that buyers (& sellers) can learn from the unfortunate experience of others.

Re the seller being an investing firm - can I know what is this? First time I have heard of this. Thanks

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Originally Posted by Boon

wow, then seller agent must have really cocked up re the procedure i.e. collecting cheque, getting buyer to initial the pages on the option and only then going to get the seller's signature...

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That is how they usually do it. It is not a cock up.

Buyer's cheque + buyer's signed option = offer.

Seller has the right to accept or reject offer.

You mean you expected seller to sign option form and everything, then ask his agent go shop around for buyers???

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Originally Posted by Boon

Re the seller being an investing firm - can I know what is this? First time I have heard of this. Thanks

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boon,
there are a lot of stories about sellers changing their minds and upping their asking prices given the current buoyant market sentiment. in my case, i happened to purchase from an institution that bought quite a big number of units in a particular project and that firm is now selling those units. according to my agent, it's easier dealing with the institution as they are not prone to upping their asking price with each offer that comes along.

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That is how they usually do it. It is not a cock up.

Buyer's cheque + buyer's signed option = offer.

Seller has the right to accept or reject offer.

You mean you expected seller to sign option form and everything, then ask his agent go shop around for buyers???

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Dear correct

(1) i may be wrong since I am not an agent or experience in the technicality of property transactions but isn't the seller (& not the buyer as you pointed out) suppose to sign option to purchase form? Then its up to buyer to excercise option within 14 days right?
(2) I meant to warn buyers who make an offer in absence of seller i.e. seller not around to sign option to purchase. In this market, the seller may just change his mind between verbally accepting the offer and signing the OTP. So if seller is not around, yes, i would think - after what happen to my friend and i presume will continue to happen in this market - that seller should sign OTP form if he is not around.

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Originally Posted by Unregistered

boon,
there are a lot of stories about sellers changing their minds and upping their asking prices given the current buoyant market sentiment. in my case, i happened to purchase from an institution that bought quite a big number of units in a particular project and that firm is now selling those units. according to my agent, it's easier dealing with the institution as they are not prone to upping their asking price with each offer that comes along.

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Thanks.
Is there any way a group of buyers who pool their funds together e.g. 10 buyers each forking out $100,000 to create a pool of $1.0 mio to buy an apartment, can create a legal entity to own a property? Can any pte ltd crrated for that purpose do that?

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Originally Posted by Boon

Dear correct

(1) i may be wrong since I am not an agent or experience in the technicality of property transactions but isn't the seller (& not the buyer as you pointed out) suppose to sign option to purchase form? Then its up to buyer to excercise option within 14 days right?
(2) I meant to warn buyers who make an offer in absence of seller i.e. seller not around to sign option to purchase. In this market, the seller may just change his mind between verbally accepting the offer and signing the OTP. So if seller is not around, yes, i would think - after what happen to my friend and i presume will continue to happen in this market - that seller should sign OTP form if he is not around.

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Boon, it is not very often that the seller is around when buyer wants to make an offer for the unit. Therefore, what agent does is: carry an unsigned option form around to the viewing. So when buyer makes offer, gives cheque, buyer also signs option on the spot. Then buyer has to wait for agent to bring it back to seller to counter sign. Then only is the deal done.

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Originally Posted by Boon

Thanks.
Is there any way a group of buyers who pool their funds together e.g. 10 buyers each forking out $100,000 to create a pool of $1.0 mio to buy an apartment, can create a legal entity to own a property? Can any pte ltd crrated for that purpose do that?

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Err ..... cannot be private limited right? Is it not called a property trust? But this one is a small one - just $1 million.

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Originally Posted by Observer.

Err ..... cannot be private limited right? Is it not called a property trust? But this one is a small one - just $1 million.

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Not sure. $1 mio was just an example but a likely size if say I were to bunch up with a few friends/acquitences to buy a central unit. While gains will be lower as it's divided, risk is lowered to acceptable level. I am just wondering if there is any vehicle to do such a thing and has it been done before.

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Originally Posted by Unregistered

Boon, it is not very often that the seller is around when buyer wants to make an offer for the unit. Therefore, what agent does is: carry an unsigned option form around to the viewing. So when buyer makes offer, gives cheque, buyer also signs option on the spot. Then buyer has to wait for agent to bring it back to seller to counter sign. Then only is the deal done.

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Thanks. That's what happened to my friend exactly (although he merely initialed the pages of the OTP to signify that he had read it and not actually sign the OTP).

Singaporeans are brained wash by the media, this year can go up by 20%, next year by 30%. All these are ambiguous statements thru our Media by our polictitions and institutions that gain from it. They are just interested in making the broad public go into a buying frenzy and pick up all the overpriced launches. Because when the broad market picks up, guess you gain the most? We are just individuals. They are Gov, developers, institutions, banks and property transaction companies.

Gov gains by releasing land at extremly high prices that were either aquired cheap or even free.
Developers gains by selling new launches at ridiculous prices, plus raise the prices of TOPed projects that still have unsold units.
Instituions gains by buying up prime properties here and justify the purchaces by issuing shares(IPO) or diluting the share value by issuing more. Buy up more and more to push prices up as to wait for the right time for release. The best part is the money they use for these purchases are not even their money, haha, it is the public money again. Property Reits involved.
Banks needless to say. Property market boom = Super business for banks.
Raise interest rate, push out more bank loans....
Property companies will get their cut/commision on every sale. The more the transactions, the more the profit.
These are the people that say the market is booming. sounds like they have alot in stake to be un-bias when reporting news don't you think so?


SAD TRUTH

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Originally Posted by SAD TRUTH

Singaporeans are brained wash by the media, this year can go up by 20%, next year by 30%. All these are ambiguous statements thru our Media by our polictitions and institutions that gain from it. They are just interested in making the broad public go into a buying frenzy and pick up all the overpriced launches. Because when the broad market picks up, guess you gain the most? We are just individuals. They are Gov, developers, institutions, banks and property transaction companies.

Gov gains by releasing land at extremly high prices that were either aquired cheap or even free.
Developers gains by selling new launches at ridiculous prices, plus raise the prices of TOPed projects that still have unsold units.
Instituions gains by buying up prime properties here and justify the purchaces by issuing shares(IPO) or diluting the share value by issuing more. Buy up more and more to push prices up as to wait for the right time for release. The best part is the money they use for these purchases are not even their money, haha, it is the public money again. Property Reits involved.
Banks needless to say. Property market boom = Super business for banks.
Raise interest rate, push out more bank loans....
Property companies will get their cut/commision on every sale. The more the transactions, the more the profit.
These are the people that say the market is booming. sounds like they have alot in stake to be un-bias when reporting news don't you think so?


SAD TRUTH

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The sadder truth is you are even more biased. *sign*