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schiz0id

What Is A Reasonable Cov?

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Hi there,

Am posting for the first time. Hope I got the right channel.

So happy to find this forum filled with people who love floor plans and looking at photos of reno works - just like me. :D

Anyway, need help deciding.. Went to look at a few jumbo flats lately (been looking around at EAs the past month or so) and my family and I love the size and the potential to do major demolition and reno works :P

Saw a unit today, it was relatively low floor and in original condition. We offered $30k above valuation on the spot. Agent called me less than an hour later to say owner rejected our $30k and is looking for $80k.

My question - for a jumbo in original condition is it worth $80k COV? Is this the norm? Perhaps for high floor but low floor?

We like the unit a lot but disappointed the asking is so high.. Sigh......

Would appreciate any comments. Thanks :)

 

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There's really no guideline for COV. Do not forget that the actual worth of the apartment you're looking at is already posted as the valuation price. Anything above that simply reflects one or a combination of several things:

  • Demand greater than supply
  • Valuation lagging compared to actual current market value
  • Greed of the seller
  • Desperation of the buyer

The valuation report would already have taken into account all the tangible attributes, including location, accessibility, amenities, floor level, facing, recent past transactions, renovations and so on.

Regardless, the seller is free to set his/her desired COV price and wait for buyers to match it. If there are no matchers because the unit simply isn't worth the asking COV, the seller either does not sell, or lowers his/her expectations. You as a buyer should keep in mind that you will need to budget for renovation besides the upfront COV. All told, you'll be needing to come up with 100k easily, so don't get carried away with the COV bidding.

Very often, it is the agents that are persuading sellers with phrases like "80k can try" in order to represent them in the sale and get the commissions. I suggest you try to talk to the owners themselves if you're really interested, and have your chequebook ready to show that you're making a serious offer. Otherwise, walk on by, and something better may come up.

Out of curiousity, which area can a low-floor EA command 80k?

 

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Hi schiz0id,

I too am a first time homeowner; my first appointment was just last week.

My GF and me viewed about 40-50 units before our agent managed to find a unit for us within our COV budget.

There's no standard guideline on how much COV a unit is worth - it really all boils down to demand and supply.

We've made $20k - $30k COV offers for units we liked only to be turned down almost immediately.

A lot of it is greed on the seller's part. There are a lot of sellers who are not really motivated to sell, but are just trying their luck and looking out for buyers who can shell out a high COV.

I guess the area you're looking at should be pretty prime for a seller to ask for a $80k COV? I think it's ok for a high floor with reno / touch-up done, but definitely not for low floor and original condition.

Which area are you looking at? We were lucky - our agent got a new exclusive listing direct from the seller who let it go to us a very reasonable COV (but the sellers time to move out was to 2 extra months).

My advice to you is:

- Don't be disheartened and keep looking for other units

- Have a detailed list of requirements that you'd like and don't mind paying for

- Have a ceiling for the COV you're willing to pay and stick to it

- Try to negotiate on other factors (eg, time you can allow for them to find a new unit and move out, furniture etc)

Generally, don't be too over-enthusiastic about one particular unit. There are other units for sale out there.

Be patient and take your time to view as many units as you can (find out the asking COV too) before shortlisting and deciding.

This is just my 2 cents :)

If you're interested you can PM me, and I can introduce my agent to you.

Hope you find a new place soon!

Regards,

Timothy

Hi there,

Am posting for the first time. Hope I got the right channel.

So happy to find this forum filled with people who love floor plans and looking at photos of reno works - just like me. :D

Anyway, need help deciding.. Went to look at a few jumbo flats lately (been looking around at EAs the past month or so) and my family and I love the size and the potential to do major demolition and reno works :P

Saw a unit today, it was relatively low floor and in original condition. We offered $30k above valuation on the spot. Agent called me less than an hour later to say owner rejected our $30k and is looking for $80k.

My question - for a jumbo in original condition is it worth $80k COV? Is this the norm? Perhaps for high floor but low floor?

We like the unit a lot but disappointed the asking is so high.. Sigh......

Would appreciate any comments. Thanks :)

 

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Hi cleong and Timothy,

Thanks for both your replies. It was very concise and laden with very useful points. Thanks! :)

Well, the area in question is actually Yishun. It's not near any of the 2 MRT stations. And, it's quite near the hospital (not good for fengshui reasons if you ask me). Not a prime location i suppose - unless one likes to take many MCs :P

If not for the fact that it meets many of our requirements (and i really mean many :P ) I think my parents and I won't be so concerned about the COV. Honestly, I have my reservations about this unit. Firstly, agent says owner not paying commission, wants to collect from me - when i heard this I sian half (literally). Secondly, after we expressed interest in the unit, agent seems to side the seller by saying $30k sure no go, cos they had offer of 80k but that guy was super despo for a place and his bank loan fell through, she prompted us to offer $50k onwards.

Well, the more I think about it the more I'm determined to look for other units. But we have also looked at numerous other units the past 2 months and so far this is the closest bet, that's the dilemma.

Should I counter offer and hope the owner budges or should I move along and look elsewhere? :dunno: *headache*

 

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Hi cleong and Timothy,

Thanks for both your replies. It was very concise and laden with very useful points. Thanks! :)

Well, the area in question is actually Yishun. It's not near any of the 2 MRT stations. And, it's quite near the hospital (not good for fengshui reasons if you ask me). Not a prime location i suppose - unless one likes to take many MCs :P

If not for the fact that it meets many of our requirements (and i really mean many :P ) I think my parents and I won't be so concerned about the COV. Honestly, I have my reservations about this unit. Firstly, agent says owner not paying commission, wants to collect from me - when i heard this I sian half (literally). Secondly, after we expressed interest in the unit, agent seems to side the seller by saying $30k sure no go, cos they had offer of 80k but that guy was super despo for a place and his bank loan fell through, she prompted us to offer $50k onwards.

Well, the more I think about it the more I'm determined to look for other units. But we have also looked at numerous other units the past 2 months and so far this is the closest bet, that's the dilemma.

Should I counter offer and hope the owner budges or should I move along and look elsewhere? :dunno: *headache*

imho, that amount of COV for yishun is certainly not worth it.

furthermore, as its near KTPH. i don't think its reasonable unless u really love visiting the doctors. haha.

for 80k, i think u can easily get a EM at tamp infront of TM. :)

do it slow and steady bro. sure can get other better units!

jiayou.

 

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Hi schiz0id,

I think a 80k COV is astronomical considering its in Yishun, not near MRT stations and near the hospital.

How old is the flat? If it's pretty new, less than 15 years old still alright.

Do you already know the current valuation and how recently it was done?

From what you mentioned, it seems like the owner / agent is a bit dodgy.

What I would suggest (if you're really set on the place) is to agree on a flat fee, and re-do the valuation upon agreeing.

This might be helpful to reduce the COV, but keep in mind this might be a bit risky especially if the valuation goes down.

My advice is look at the next 2-3 best matches for what you require, and find out more about what COV and asking price they're looking for.

See if you're willing to trade off some of your requirements for a lower price / COV.

Otherwise, I think you're better off looking elsewhere. Hope this helps!

Regards,

Timothy

Hi cleong and Timothy,

Thanks for both your replies. It was very concise and laden with very useful points. Thanks! :)

Well, the area in question is actually Yishun. It's not near any of the 2 MRT stations. And, it's quite near the hospital (not good for fengshui reasons if you ask me). Not a prime location i suppose - unless one likes to take many MCs :P

If not for the fact that it meets many of our requirements (and i really mean many :P ) I think my parents and I won't be so concerned about the COV. Honestly, I have my reservations about this unit. Firstly, agent says owner not paying commission, wants to collect from me - when i heard this I sian half (literally). Secondly, after we expressed interest in the unit, agent seems to side the seller by saying $30k sure no go, cos they had offer of 80k but that guy was super despo for a place and his bank loan fell through, she prompted us to offer $50k onwards.

Well, the more I think about it the more I'm determined to look for other units. But we have also looked at numerous other units the past 2 months and so far this is the closest bet, that's the dilemma.

Should I counter offer and hope the owner budges or should I move along and look elsewhere? :dunno: *headache*

 

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First, use this URL to check the latest translation price. http://www2.realink2...sacted_hdb.aspx

Second, 80k for a low and original condition HDB and you need to pay the seller agent fee for the seller, You still need to pay ur own agent fee some more. That add on to almost 90k plus. Then has not include reno , furniture some more. This is alot of CASH.

Did the seller agent tell you how much is his/her fee? 1% or 2% include GST liao bo

 

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Don't quite understand why those 1st timers( refer to small family) like to get big resale flat....

Why don't get a smaller one first, at same time apply for BTO? Always need some planning ahead.

Resale price, to me, now is "unreasonably" high. Seem like only the real economic downturn can "press" the resale price down.

 

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hi people, COV is getting ridiculous even in Sengkang, owners are all asking for 55k up, and trust me, some are even asking for 80K and original condition, I believe it is either greed or the agent is give wrong advice.

 

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I was like you years ago, eager get my 1st property, was dissapointed many times with the high COV asked or was outbid.

Just move on, you will find your ideal home soon as there will always be new or fresh units out daily. I finally found mine, at a more reasonable cov $30k

$80k is definitely too much, + agent commission + reno (such a big unit, smelly2 $60k) + furniture/fittings etc will kill you of coz unless you got a big bank balance.

 

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Do you have an agent? I would refuse to pay commission to the seller's agent.

Firstly, agent says owner not paying commission, wants to collect from me - when i heard this I sian half (literally).

Suggest you check the HDB website for the recent transaction prices. What would be the maximum COV which you will be willing to buy? The seller might not have received any offers at all and I won't be surprised if you receive a phone call from the agent informing you that the seller is keen to accept your offer or ask for slightly more.

Secondly, after we expressed interest in the unit, agent seems to side the seller by saying $30k sure no go, cos they had offer of 80k but that guy was super despo for a place and his bank loan fell through, she prompted us to offer $50k onwards.

Well, the more I think about it the more I'm determined to look for other units. But we have also looked at numerous other units the past 2 months and so far this is the closest bet, that's the dilemma.

Should I counter offer and hope the owner budges or should I move along and look elsewhere? :dunno: *headache*

 

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Funny u have to bear the seller's agent commission...

so is $80k inclusive of buyer agent commission? Or 80k excluding, if exclude..2% x say unit valuation:$500k + cov$80k = $11,600

buyer agent commission (1%), $5,800..

then got GST...wooww.

Edited by 666
 

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for 80k, i think u can easily get a EM at tamp infront of TM. :)

Probably. Last highest when I checked last week was around 650k.

Don't quite understand why those 1st timers( refer to small family) like to get big resale flat....

Family was not defined. My BiL and SiL bought an EA together and my MiL and FiL live with them as well. For just two people though it is really a waste considering the housing situation.

hi people, COV is getting ridiculous even in Sengkang, owners are all asking for 55k up, and trust me, some are even asking for 80K and original condition, I believe it is either greed or the agent is give wrong advice.

When we were looking at the end of last year we came across and very nice apartment, mid floor overlooking Tampines Stadium. The owner was asking around 40k COV on the open house viewing. Last we heard he was asking 70k COV but that was just before the first of the new knee jerk rules came in. We got about 70k I think for our 3 room but.... we didn't demand it. It was offered in a closed bid as two were willing to pay the 50k.

People will take the most they can get regardless of whether others consider it fair or not. As people have mentioned, some sellers are just trying their luck. I would check to see if COV anywhere near what I could comfortably offer, place a reasonable offer below the asking COV and see if they will lower. If I really liked the place I would then offer just below the COV (5k or so). If that still failed and I really loved the place I would make a last offer on the COV whilst making it clear this was my very last offer. If at any time the COV when up I would walk away. Our seller wanted 80k originally (top floor EM more or less opposite Century Square - Tampines). We passed. We returned around a month later later and they had dropped to 55k. We settled on 50k as they were urgent to sell and we could sign on the day. It also helped that there were a couple of other units in the same set of blocks also for sale although this was the most expensive.

IMO 80k anywhere is really too much. Having to pay 50k to me is a real push for COV regardless of whether I have it or not.

Don't worry though as the government and the media has confirmed that prices are coming down due to the Governments new 'measured and effective rules'... if you believe that.

RB

 

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Willing seller willing buyer, no right or wrong. As a seller u want to sell high, as a buyer u want to buy low.

If u r not happy about the asking COV, just walk, plenty for u to choose from. I will not use the median COV given by garment.

 

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Hi all,

Thanks for all your replies. So happy to hear everyone thinks 80k is crazy - thanks for the assurance that i'm not (crazy to think it's high) :D

Well, I am not the one buying the flat. My parents are. I would love to be a first-time buyer unfortunately age doesnt permit. ;)

My family and I are downgrading as such jumbo or EA units seem to be most comfortable for us since there are technically 6 of us (a furry one included). We were looking at Pasir Ris and Hougang and so far none have asked for the exorbitant 80k. I checked past transacted prices (thanks for the link!) and yup, the price that the owner is asking for is indeed "out of this world". Will still be on the lookout for big units. But yes, generally the feel I get is resale prices are getting very unaffordable. We might have to rent for a year and hope the market will come down but even then, we are not sure market will ease. :dunno:

With regards to agent, I don't have a buyer agent, prefer to do it myself. The agent who is "supposedly" representing me is asking for 1%. After doing all the searching and calling and whatever and now have to pay that 1% i really sian half. :furious:

 

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