Agree price, then get valuation

[Jman888]

Agree price, then get valuation for HDB resale deals

Published on Mar 10, 2014

By Janice Heng

Cash-over-valuation (COV) figures will no longer be part of the negotiating process for Housing Board resale deals, as buyers and sellers will now have to agree upon a price first before getting an official valuation, National Development Minister Khaw Boon Wan said in Parliament on Monday.

Previously, sellers usually got valuations first, and then negotiated with buyers over how much more - or less - should be paid. But negotiations should "rightly" be based on recent transaction prices, not the additional cash premium or COV, said Mr Khaw.

So from 5 pm on Monday, a price must first be agreed upon and the Option to Purchase (OTP) granted, before buyers can request a valuation from the HDB. HDB will no longer give valuations to sellers, although existing OTPs and valuations will still be honoured until their expiry.

This move will "restore the original intention of valuation, which is to help buyers get a housing loan," said Mr Khaw.

 

 

 

workable?

 

 

[Little_prince]

If agreed price too high. Valuation too low. Cant get loan then how?

[Tigerwoods]

Rule should apply to all properties

[Jman888]

If agreed price too high. Valuation too low. Cant get loan then how?

 

 

err.... any different even with valuation and yet you commit a high price/COV?

[Darryn]

Seems backwards to me - unless there is something I am missing?

 

Can still get valuation from private valuer or not? Then "official" valuation from HDB?

 

What will the bank loan be based on - private valuer or HDB?

 

But yeah - seems to be inviting problems to me, what if the loan approval and the valuation don't "match"?

 

And also - how can we agree on a price, if we don't know the value? This is a house you are buying, not a pasir malam set of pyjamas where you can tikam tikam hoot price.

 

 

 

 

workable?

 

 

 

 

[Wyfitms]

If agreed price too high. Valuation too low. Cant get loan then how?

 

kana screwed backside lah

[Little_prince]

 

 

err.... any different even with valuation and yet you commit a high price/COV?

of course. U already know the valuation and hence u can commit to the cov with eyes wide open

[Jman888]

Seems backwards to me - unless there is something I am missing?

 

Can still get valuation from private valuer or not? Then "official" valuation from HDB?

 

What will the bank loan be based on - private valuer or HDB?

 

But yeah - seems to be inviting problems to me, what if the loan approval and the valuation don't "match"?

 

And also - how can we agree on a price, if we don't know the value? This is a house you are buying, not a pasir malam set of pyjamas where you can tikam tikam hoot price.

 

 

 

 

many a time the seller decide on the COV first before the valuation is out, hence they die die want $100K COV regardless. If without valuation you will only look at what you can afford. Better this way?

of course. U already know the valuation and hence u can commit to the cov with eyes wide open

 

 

some buyers dun like COV will only look at the final price, if i think it worth $600K and that will be my final.

[Darryn]

But you're mixing buyer and seller here.

 

In any case - am I misunderstanding the system? Why does COV matter to SELLER? For him, shouldn't it be total price?

 

Isn't that total price - whatever pay back to CPF, then balance to my pocket? COV makes no difference to this right? (or am I wrong?)

 

On the other hand, for BUYER - the COV cannot be purchased - it must be the purple folding stuff regardless? So he would have a max COV he is comfortable with.

So my question becomes - lets say we agree price of $550k, based on $500k value + $50k COV.

But then valuation comes in at $480k - so now COV is $70k -

 

Solly lah!! I not enough cash for $70k COV - So transaction falls through? How like that?

 

 

 

many a time the seller decide on the COV first before the valuation is out, hence they die die want $100K COV regardless. If without valuation you will only look at what you can afford. Better this way?

 

[Soya]

Rule should apply to all properties

 

 

private property where got COV one?

[Jman888]

 

 

private property where got COV one?

hdb should do away with cov, strictly no cov.

[OmOm]

I feel that not enough thought has been put into this and it reeks of being a knee-jerk reactionary policy change.

 

There will a lot of operational problems popping up from this which will warrant further tweaking.

 

As a buyer, I would not commit to a property without knowing whether it is affordable. This includes the financing availability, cash payable, payment milestones, etc. Erring on the side of caution due to this factor means that my offer price would be very much lower than prevailing market pricing due to the down-trend.

 

As a seller, I would use the latest transaction amounts of similar properties in the vicinity as a benchmark for my expected sale price. In a down-trend, successive valuations would be decreasing over time. This widens the gap between buyer and seller expectations, resulting in a further reduction in transaction volume.

 

This will exacerbate the present down-trend for HDB prices because potential buyers will delay their purchases due to uncertainties in the above aspects (resulting in lowered demand), creating a vicious cycle in which both volumes and prices fall.

 

 

 

 

 

workable?

 

 

 

 

[Wyfitms]

 

This will exacerbate the present down-trend for HDB prices because potential buyers will delay their purchases due to uncertainties in the above aspects (resulting in lowered demand), creating a vicious cycle in which both volumes and prices fall.

 

 

 

 

perhaps this is their intention? Price havent fall fast enough yet with election date drawing nearer by the day LOL

[Jman888]

I feel that not enough thought has been put into this and it reeks of being a knee-jerk reactionary policy change.

 

There will a lot of operational problems popping up from this which will warrant further tweaking.

 

As a buyer, I would not commit to a property without knowing whether it is affordable. This includes the financing availability, cash payable, payment milestones, etc. Erring on the side of caution due to this factor means that my offer price would be very much lower than prevailing market pricing due to the down-trend.

 

As a seller, I would use the latest transaction amounts of similar properties in the vicinity as a benchmark for my expected sale price. In a down-trend, successive valuations would be decreasing over time. This widens the gap between buyer and seller expectations, resulting in a further reduction in transaction volume.

 

This will exacerbate the present down-trend for HDB prices because potential buyers will delay their purchases due to uncertainties in the above aspects (resulting in lowered demand), creating a vicious cycle in which both volumes and prices fall.

 

 

 

 

I thought all information is in the hdb website on previous transacted price (no disclosure of cov amount)?

[Xefera]

perhaps this is a ploy to get buyer to push down the prices on seller?

 

no need HDB intervention and prices will get depressed by market forces. if seller tries too many times to sell but all are unsuccessful, then he will be forced to relent and lower his price.

[Ahgong]

 

 

 

workable?

 

 

 

 

ho ho ho... another spanner in the works liow.

this time the scales lean towards the buyer rather than the seller.

 

typical~! now those wanting to sell is gonna be having a hard time~!

[Ichibawa]

Changing and bending rules just to keep price afloat.

[Little_prince]

 

 

err.... any different even with valuation and yet you commit a high price/COV?

of course. U already know the valuation and hence u can commit to the cov with eyes wide open