Sellers of rare flats may use loophole

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Anxious sellers of rare units may use a loophole in new housing board rules given the limited number of similar transactions to base asking prices on; said media reports quoting several property agents.

Under the new rules, only the buyer or his agent can get a HDB-approved valuation after a price has been agreed upon with the seller. Notably, sellers will no longer be allowed to secure a copy of the valuation since they do not need it.

But unlike sellers of typical flats who have plenty of transactions to guide them, sellers of rarer units may find themselves scratching their heads.

Hence, sellers wanting to know how HDB values the flat, could “get a friend to pose as a buyer, get the valuation, then let the option lapse after 21 days”, said property agent J.A Goh.

This could occur in unique flat types like Pinnacle@Duxton, which will see its minimum occupation period (MOP) expire later this year, or the discontinued Design, Build and Sell Scheme (DBSS) flats.

“The Pinnacle is public housing but it's so unique that you can't exactly base prices on nearby HDB flats,” noted Goh, adding that “sellers may want peace of mind and find out what is reasonable from the HDB”.

Having a relative or friend pose as a buyer to get a HDB-approved valuation is much cheaper than having private valuers, which can cost thousands of dollars. A HDB-approved valuation only costs $191.90 for a three-room or larger flat.

Nonetheless, most sellers are unlikely to get a relative or friend to pose as buyers considering that prices of typical units are “pretty standard”.

“If you get a valuation just to ‘be sure’, you'll lock yourself out from a potential deal for the next 21 days. There’s no point,” said agent Dennis Foo.



Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email [email protected]

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http://www.straitstimes.com/archive/...phole-20140314

Some sellers 'may exploit loophole'

Published on Mar 14, 2014

By Rachel Au-Yong


WITH few comparable transactions to go by, anxious sellers of rare units may try to exploit a loophole in new Housing Board rules, several property agents said.

New rules dictate that only the buyer or his agent can apply for HDB-approved valuations after a price has been agreed with the seller. Sellers no longer get a copy as they do not need it in theory, unlike buyers who need it to apply for bank loans.

But while sellers of typical flats have plenty of transactions to take reference from, those selling rarer units may feel like they are fumbling in the dark without a valuation to guide asking prices.

"If a seller really wants to find out how HDB values his flat, he could just get a friend to pose as a buyer, get the valuation, then let the option lapse after 21 days," said ERA Realty agent J.A. Goh.

This may happen for unique flats such as the discontinued Design, Build and Sell Scheme flats, or the Pinnacle@Duxton, which will see its minimum occupancy period expire at the end of this year. "The Pinnacle is public housing but it's so unique that you can't exactly base prices on nearby HDB flats," Mr Goh said.

"Sellers may want peace of mind and find out what is reasonable from the HDB," he added.

Getting a friend or relative to pose as a buyer and getting an HDB-approved valuation is cheaper than going through private valuers. An HDB-approved valuation costs $191.90 for a three-room flat or larger, while private valuations can cost thousands of dollars. However, most are unlikely to resort to getting friends or family members to pass off as buyers.

"The prices of a typical unit are pretty standard," said Dennis Wee Realty agent Dennis Foo. "If you get a valuation just to 'be sure', you'll lock yourself out from a potential deal for the next 21 days. There's no point."

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