Dealing with errant property/housing agents (aka salesperson under CEA)
I had my fair share of dealing with housing agents until I learned more about them thru CEA. CEA now regulates all housing or property agents & now they are known as salesperson.
I am still new to the forum & both me & my future wife are 1st time HDB flat buyers. We are not eligible for any grant or BTO flats, burst all the criteria ceiling liao. But anyway we are ok with resale.
I just want to share a few things which I had learnt so far about these salesperson, some of which may already have been discussed.
Identification
Under CEA, all salesperson must carry identification when performing/discharging their duties during their course of work. Meaning to say they must carry an ID with photo & agent licence number next to agency licence number. Their name card should reflect these too. Failure to do so is violation & they can be reported.
HDB procedures
There’s no need to engage agent to buy or sell your flat, which u already know. But my take is this, I engage them to take the load off my back of checking around because of my work commitment & time. But first off, when calling any sales ads, do not be so fast as to identify yourself as buyer or agreeing to pay 1% commission, because buyers do not need to pay any commission, only sellers do.
Below is a procedure which I had drawn up, for buying resale flat, after seeing & agreeing to buy (all forms can be found at HDB webpage):
1. Complete HDB’s Resale Checklist (but required by HDB) / Make inventory list (optional)
2. Bank’s Letter of Offer (LO) – backdate before date of Acceptance (1 week), or do it before purchase, with bank rates so low, make more sense to get fix (board) rate rather than SOR
3. Seller & Buyer mutually agree on submission date for OTP
4. Sign on OTP Acceptance (dated to be after Bank’s LO) – submit Option Fee (not exceeding $1,000.00)
5. Exercise Option (within 14 days)
6. Option Period 14 days (Saturdays, Sundays, Public Holidays included), expire on 4pm, submit Deposit (not exceeding $5,000.00 includes Option Fee)
7. Set HDB First Appointment
8. Buyer & Seller attend First Appointment (pay for valuation report - $180)
9. Set HDB Second (completion) Appointment (6 to 8 weeks from First Appointment)
10. Buyer will receive HDB approval letter within 2 weeks from date of First Appointment
11. Since COV less than 10% purchase price, need to pay within 10 days from First Appointment
12. Buyer & Seller attend Second Appointment to finalise resale transaction, Seller to handover all keys
13. Buyer is now officially & legal flat owner
Now a few pointers:
1. Check with seller that all outstanding monies owed to HDB had been paid & must see proof of ownership. Outstanding HDB monies can be lift upgrading, MUP costs because some times billings from town council takes time to process. Must see original official receipt as proof of any payment.
2. There’s no need to pay seller’s agent 1% commission to do ‘paperwork’. U can do it yourself. Just download & do research on HDB’s website. Attending their resale seminar is optional but not really necessary to understand the procedures. This is a willing ‘agent - buyer’ thing. If u feel the agent is honest & good, no problem giving a ‘tip’ or small fee but try not to because it may will become ‘market practice’.
3. There’s no need to pay for the valuation report immediately when giving OTP fee. Wait till first appointment then pay also can.
4. DO NOT get your banker to call seller’s agent if he or she demands for it. They want to ‘take’ the referral fee. And if they take it, u will end up paying for the legal fee & no subsidy. Do not fall for this. Report the agent if they demand for it as it is unethical.
5. Always look around the flat, ask for second viewing, have a feel that u really want to stay there.
What happens if flat is so cheap, below valuation? (Part 1)
Look out for loan shark traces, eg graffiti, markings, new patch paintings nearby or downstairs, ask the neighbours.
Sometimes it may be ‘forced’ or foreclosure sale (flats MOP maybe less than 5 years), eg owner didn’t pay loan, owned private property, failure to disclose to HDB certain info, etc.
Or ‘hardship sale’, owner facing bankrupt or in need of money, in this case, HDB may grant special permission to sell even MOP not fulfilled.
Always remember, when it comes to the bank or how we view a HDB property, do not look at COV as it’s a willing buyer/seller thing. Most important is valuation. So try not to pay too high a COV unless u want to & can afford because it will fluctuate unlike valuation price.
Also, example, if during design phase, u want your 3 room living room to be bigger & u hack down the adjacent wall of one room (with all necessary approval of course), then the valuation will drop if u sell next time, provided u do back the wall to form back the room before the valuer comes.
What happens if seller wants to contra or extend?
First of all, if seller wants to contra, meaning sell his current flat & at same time use the cash to buy another flat (either downgrade or change location), the timing is very crucial, otherwise the buyer may end up taking over flat late. In this case, its better to engage a salesperson who is knowledgeable enough to do it. They will need to be very familiar with HDB’s ECF system.
If seller wants to extend, eg stay for 1 month / 30 days or 60 days, then by right rental (as per prevailing rates) should be payable, to be fair to buyer. However, if u have a good salesperson, he or she can help negotiate with seller if seller doesn’t want to pay rental (eg since buyer will already be servicing the loan, can share rental 50/50, seller pay buyer 50% of market rental rate)
Also this portion very important. If seller or his salesperson says no rental condition, ok sure, push back first appointment and second appointment date. Use the option period to find another better place, if u are in need of urgent housing so that worst to worst u only lose $1,000 or $5,000 if option had been exercised. But only resort to this if no choice, like when u need a flat & timing really tight & u still need to factor in renovation timing. Also some people may not want to start work, eg renovation, during the Chinese ‘7th ghost month’ so may need to factor that in, if not, then its fine. Check out the flat unit & seller & salesperson in greater detail because the process may drag & some times not worth the trouble to be involved, so better get another instead, unless u really want it.
What happens if flat is so cheap, below valuation? (Part 2)
Some tricks salesperson may play which I had encountered in order to get prospective buyers’ contact.
There are some flat units which are very cheap (asking below valuation price), not because loan shark cases or other problems, but they could be the salesperson’s own flat or relative’s. They are merely using them to get potential buyers up & end up talking to them & getting contacts. Later when it comes to offering to buy, they will give all sorts of reason, then offer u an alternative location & flat for sale. U can see this if u notice that how come downstairs got people keep on bringing buyers up. This happens to flats in ‘hot locations’, eg high floor, good amenities, sea view, etc. And some times these salesperson may make sure of this method to demand some ‘pocket money’ from u in order to secure deal. Do not fall for this. Or pay them, tape the whole conversation, get receipt, then report to CEA.
Depending on your salesperson who u had engaged to find a flat for u, he or she may be able to counter this type of people & either expose them or make them sell their flat, because its strictly against CEA regulations. Salesperson maybe fined if liable.
All these are my own personal experience. I am not here to say all salesperson are bad. I am blessed because I have good friends and ‘advisers’ to inform & feedback to me so that I do not fall into the trap or just be more aware. There are salesperson who are really caring & knowledgeable & helpful, it’s the small pockets of ‘black sheeps’ who are irresponsible ones & creating bad name for the profession.
