Starting Your House Hunt
From Financial Literacy Wiki
Starting Your House Hunt
You are now ready to buy that dream flat or your first investment property. So how do you get started? Here are some tips to help you.
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Get Armed with Information
Read up on the facts. After deciding what type and location of flat you want to buy, go online to the Housing Board website and follow the links under “HOME SEEKERS” to “HDB housing market statistics” to find out the median resale prices and average amount people paid above valuation for the flats.
If you are eyeing flats in a particular block, you could also call up agents marketing flats in nearby blocks to find out what kind of prices they are seeking.
Visit the location at different times of the day to get a feel of what it’s like to live there. For example, a rumbling air-con from neighbours at night or the sunlight that from the morning sun that makes the flat very hot.
Agents or no Agents
Decide if you want to hire a housing agent to help you with your purchase, or if you want to do everything yourself. Commission structure is not fixed in Singapore laws but buyers typically pay around 1 percent commission of transaction.
If you are going it alone, check out HDB website to find out the procedures involved, or attend its monthly resale seminar.
If you decide to use an agent, do read up with fellow house hunters or others that have bought their flats how these agents receive their commissions and what are their common practices. This is to protect your own interest and make sure that the housing agent is acting in favor of you and not himself.
History of Flat
We have seen many cases where house owners are being harassed for repayments by loansharks because of money owed by the previous owners. Thus, to have a peace of mind, if would be wise to act Sherlock and look around the surroundings to see if there are signs of it.
If sellers seems desperate to sell the flat at a price that is lower than valuation, it could be a sign as well that there maybe something wrong with the flat so it would be wise to do some investigation on your own.
Some of us have preferences or superstitions that we believe in since we are Asians. For example, you do not want to live in a house that someone has died in it. Be inquisitive and ask a lot of questions. The agents may not voluntarily disclose information that might hurt the chances of the unit being sold or sold a high price but he is obliged to tell the truth when asked.
Another common problem with older flats is leaky ceilings. So do look out for watermarks on the roof.
Be Proactive
Don’t give up if one agent turns down your offer. Seek other agents that are marketing the same flat and make your offer to them. Check out the classifieds if there are other advertisement that is taken out for the same flat you are looking to buy and call them with your offer.
Keeping Cool
It is very common for agents to arrange viewing for as many (10-20) interested parties. This creates a heightened demand and sense of competition among buyers so as to have a higher offer. Some agents would tell you that they have receive several offers – even though they have none – to get your interest.
Again look for experienced people to find out what ‘tricks’ these housing agents have so that you will not be ‘tricked’. All in all, just keep your sense of perspective which is your prevailing market price of the flat you have in mind.
HDB Upgrading
As the Singapore government is intending to upgrade many old HDB flats, it would be advisable to check out when the billing of these upgrades occur, for instance does the billing comes after the upgrades have been done and what are the upgrades.
Take your Time
Buyers and sellers of HDB flats must use the standard HDB Option of Purchase form for resale transactions. Under this arrangement, the buyers will get 14 days to consider purchase after paying the seller a non-refundable option fees less than or equal to $1000.
Once the seller has granted the option, he cannot sell his flats to another party within that 14 days period. If after 14 days, the buyer decides not to go with the transaction, he will not receive back his option fees. If he goes ahead with the transaction, he signs the same form and pays another fee to the seller to exercise his options.
Do not feel pressured to exercise your option on the spot. Use the 14 days to check your ability to finance the housing loan and having a second look at the house. When you have decide to exercise your options and then decide to back out of the transactions, the seller can claim damages against you.
