Jts: Think Carefully Before Paying For High Cov

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Jan 19, 2010 - PropertyGuru.com.sg

Several housing analysts have said it is a seller’s market right now and resale flats are becoming a hot commodity.

However, the Housing and Development Board (HDB) urged buyers to be cautious when paying high cash premiums and determine if a house is truly worth its price.

Recently, a four-room flat in Bishan was put up for sale. The flat was valued at $460,000 by one of HDB’s independent valuers, but the owner is asking for a cash-over-valuation (COV) worth S$100,000.

The owners, who declined to be identified, claimed to have received three offers for the flat, but all were rejected.

"The COV is too low. There are those who are asking for S$50,000 to S$60,000. There was one offer which was close, about S$95,000. We are not in urgent need to sell. In a way, it's to test the market. If we sell, we sell. If we don't sell, we will just continue to stay," said the flat owner.

Analysts noted that with continued high demand for resale flats, owners are taking advantage of the situation by demanding for higher prices.

Based on HDB’s latest figure, about 78 percent of home transactions in Q3 of last year were above valuation, a 22 percent increase from the 57 percent in Q3 of 2009.

The average COV also rose, climbing from S$3,000 in Q2 to S$12,000 in Q3.

With the HDB resale market hitting an all-time high, many housing agents said most units now command at least a S$20,000 to S$30,000 cash-over-valuation.

Units situated at good locations, near the MRT stations and with good renovation can see a COV worth between S$50,000 and S$70,000. But still, there is a limit as to how much a buyer is willing to pay.

"If it's not to my liking, then I'd have to do up, (renovate) it again. So how much (am I willing to pay)? About S$50,000 to S$60,000," said one local citizen.

"It's too high for me. Because of my income, I don't think I can afford it," said another.

HDB said that only four of the 13,000 four-room units sold last year had premiums higher than S$70,000.

Analysts also warned against getting into deals that need high cash premiums.

"COV is a premium. Five years down the line, the renovation will deteriorate. And there's no guarantee that you can sell at S$100,000 above the then value. Therefore, buyers should exercise discretion as far as how high you want to pay," said PropNex CEO Mohamed Ismail.

HDB does not control the prices of resale flats, as it is a result of negotiations between buyers and sellers, and intervening in COV means forcing to buy and sell flats at a fixed price.

However, it urged buyers to have the appropriate information before jumping into negotiations, and buy a flat that is within their means.

[Phantom 1]

Jan 19, 2010 - PropertyGuru.com.sg

Several housing analysts have said it is a seller’s market right now and resale flats are becoming a hot commodity.

However, the Housing and Development Board (HDB) urged buyers to be cautious when paying high cash premiums and determine if a house is truly worth its price.

Recently, a four-room flat in Bishan was put up for sale. The flat was valued at $460,000 by one of HDB’s independent valuers, but the owner is asking for a cash-over-valuation (COV) worth S$100,000.

The owners, who declined to be identified, claimed to have received three offers for the flat, but all were rejected.

"The COV is too low. There are those who are asking for S$50,000 to S$60,000. There was one offer which was close, about S$95,000. We are not in urgent need to sell. In a way, it's to test the market. If we sell, we sell. If we don't sell, we will just continue to stay," said the flat owner.

Analysts noted that with continued high demand for resale flats, owners are taking advantage of the situation by demanding for higher prices.

Based on HDB’s latest figure, about 78 percent of home transactions in Q3 of last year were above valuation, a 22 percent increase from the 57 percent in Q3 of 2009.

The average COV also rose, climbing from S$3,000 in Q2 to S$12,000 in Q3.

With the HDB resale market hitting an all-time high, many housing agents said most units now command at least a S$20,000 to S$30,000 cash-over-valuation.

Units situated at good locations, near the MRT stations and with good renovation can see a COV worth between S$50,000 and S$70,000. But still, there is a limit as to how much a buyer is willing to pay.

"If it's not to my liking, then I'd have to do up, (renovate) it again. So how much (am I willing to pay)? About S$50,000 to S$60,000," said one local citizen.

"It's too high for me. Because of my income, I don't think I can afford it," said another.

HDB said that only four of the 13,000 four-room units sold last year had premiums higher than S$70,000.

Analysts also warned against getting into deals that need high cash premiums.

"COV is a premium. Five years down the line, the renovation will deteriorate. And there's no guarantee that you can sell at S$100,000 above the then value. Therefore, buyers should exercise discretion as far as how high you want to pay," said PropNex CEO Mohamed Ismail.

HDB does not control the prices of resale flats, as it is a result of negotiations between buyers and sellers, and intervening in COV means forcing to buy and sell flats at a fixed price.

However, it urged buyers to have the appropriate information before jumping into negotiations, and buy a flat that is within their means.

Asking is one thing. getting it is another.

Another way to look at it.

If you bought something for $50 and can sell it for $150 when everyone else is selling for $80..... would you?

if someone come around and offer me >500k for my flat I'd consider selling my place too..

[kelamel 0]

Asking is one thing. getting it is another.

Another way to look at it.

If you bought something for $50 and can sell it for $150 when everyone else is selling for $80..... would you?

if someone come around and offer me >500k for my flat I'd consider selling my place too..

LEts see what happens to my flat....im askign for just near the median range cov....but remember that u may have sold too and asked for a higher cov....

[davidbslee 1]

Jan 19, 2010 - PropertyGuru.com.sg

Several housing analysts have said it is a seller’s market right now and resale flats are becoming a hot commodity.

However, the Housing and Development Board (HDB) urged buyers to be cautious when paying high cash premiums and determine if a house is truly worth its price.

Recently, a four-room flat in Bishan was put up for sale. The flat was valued at $460,000 by one of HDB’s independent valuers, but the owner is asking for a cash-over-valuation (COV) worth S$100,000.

The owners, who declined to be identified, claimed to have received three offers for the flat, but all were rejected.

"The COV is too low. There are those who are asking for S$50,000 to S$60,000. There was one offer which was close, about S$95,000. We are not in urgent need to sell. In a way, it's to test the market. If we sell, we sell. If we don't sell, we will just continue to stay," said the flat owner.

Analysts noted that with continued high demand for resale flats, owners are taking advantage of the situation by demanding for higher prices.

Based on HDB’s latest figure, about 78 percent of home transactions in Q3 of last year were above valuation, a 22 percent increase from the 57 percent in Q3 of 2009.

The average COV also rose, climbing from S$3,000 in Q2 to S$12,000 in Q3.

With the HDB resale market hitting an all-time high, many housing agents said most units now command at least a S$20,000 to S$30,000 cash-over-valuation.

Units situated at good locations, near the MRT stations and with good renovation can see a COV worth between S$50,000 and S$70,000. But still, there is a limit as to how much a buyer is willing to pay.

"If it's not to my liking, then I'd have to do up, (renovate) it again. So how much (am I willing to pay)? About S$50,000 to S$60,000," said one local citizen.

"It's too high for me. Because of my income, I don't think I can afford it," said another.

HDB said that only four of the 13,000 four-room units sold last year had premiums higher than S$70,000.

Analysts also warned against getting into deals that need high cash premiums.

"COV is a premium. Five years down the line, the renovation will deteriorate. And there's no guarantee that you can sell at S$100,000 above the then value. Therefore, buyers should exercise discretion as far as how high you want to pay," said PropNex CEO Mohamed Ismail.

HDB does not control the prices of resale flats, as it is a result of negotiations between buyers and sellers, and intervening in COV means forcing to buy and sell flats at a fixed price.

However, it urged buyers to have the appropriate information before jumping into negotiations, and buy a flat that is within their means.

KNN, this kind of test market flat owner sucks. The statment that flat owner said "The COV is too low. There are those who are asking for S$50,000 to S$60,000. There was one offer which was close, about S$95,000. We are not in urgent need to sell. In a way, it's to test the market. If we sell, we sell. If we don't sell, we will just continue to stay," said the flat owner.

Wast agent time only... I really hope his or her flat when he or she really need to sold that time, nobody will buy..... Maybe agent should pass words around to avoid this flat owner.

[cleong 1]

I encountered this particular flat. 3 bedrooms knocked to become 2 bedrooms. I didn't view, but renovation or view must be tok-kong in order to attract a 95k offer. Regardless, if I am a mere 5k short of my expected price, knowing I am already 95k up over valuation, I'll take it and run.

The agent sounded **** sian when I called, probably because the seller is testing water. When the valuations catch up to the offer prices, he'll not see such a fat COV already. Some people just don't know how to quit when they're ahead!

[Phantom 1]

LEts see what happens to my flat....im askign for just near the median range cov....but remember that u may have sold too and asked for a higher cov....

It doesn't make sense if i'm selling my flat to sell near the median range because the high and lows are really wide in my area. Furthermore, 4room flats in my area are already asking near the median range of my 5room flat.. sheesh..

[surfsong 0]

My fren juz bought at Boon Tiong Rd, 10 flr at $720k.

Valuation at 635 only. But wifey likes so much & owner already have 700 firm on offer.

They expect to go up further. what can u say?

[Phantom 1]

My fren juz bought at Boon Tiong Rd, 10 flr at $720k.

Valuation at 635 only. But wifey likes so much & owner already have 700 firm on offer.

They expect to go up further. what can u say?

Is your friend local?

Wife like and they have the financial muscle.. what to do.

Frankly, no one will know except for the owner if there really is a 700 firm offer.

[musicbox 0]

Is your friend local?

Wife like and they have the financial muscle.. what to do.

Frankly, no one will know except for the owner if there really is a 700 firm offer.

Ya, many agents when sms me the available units within my search area, will give me a very high last offer, and some i can see it so many times even few mths later the hdb was not sold yet. Even if someone offered a high price 2 mths ago, the offer might not be valid 2 mths later, when searching for your dream home, only offer the price tat you can afford and you think is worthwhile, don't be carried away by the agent

Like my friend, last time said want to sell her flat at $30k COV, someone offered $20k and got rejected. But 3 mths down the road, no more potential buyers, she got no choice but to sell off her flat at $20k COV, that's a live example....

[musicbox 0]

My fren juz bought at Boon Tiong Rd, 10 flr at $720k.

Valuation at 635 only. But wifey likes so much & owner already have 700 firm on offer.

They expect to go up further. what can u say?

Haha, so your friend could be one of the few out of thousands that paid for high COV.....

[surfsong 0]

Is your friend local?

Wife like and they have the financial muscle.. what to do.

Frankly, no one will know except for the owner if there really is a 700 firm offer.

Yup my fren local. They like the area & has lost out a deal when they stand firm on 700k.

so when this unit came along, they juz take it.

[Phantom 1]

Ya, many agents when sms me the available units within my search area, will give me a very high last offer, and some i can see it so many times even few mths later the hdb was not sold yet. Even if someone offered a high price 2 mths ago, the offer might not be valid 2 mths later, when searching for your dream home, only offer the price tat you can afford and you think is worthwhile, don't be carried away by the agent

Like my friend, last time said want to sell her flat at $30k COV, someone offered $20k and got rejected. But 3 mths down the road, no more potential buyers, she got no choice but to sell off her flat at $20k COV, that's a live example....

I fully agree with what you've mentioned.

The market is all about willing buyers and willing sellers.

The price point is also subjective to each.

[Shirley1982 0]

Ya

So very the high COV now. really thinking twice to purchase a flat now.

[isaling 0]

Hi Everyone,

I just bought an EM at Pipit Rd S$50K cov do you think it's expensive?

[cleong 1]

Hi Everyone,

I just bought an EM at Pipit Rd S$50K cov do you think it's expensive?

Depends whether the house is in move-in condition or requires renovation?

Its kind of like asking, I bought meat at the market for $5, is it expensive?

Maybe you bought a tray of frozen chicken wings.

Maybe you bought wagyu marbled premium Japanese beef.

If you don't specify, no one knows enough to comment.