Flat buyers turn cautious on new resale rules

The implementation of the housing board's new resale procedure saw home buyers becoming more cautious, according to property agents quoted in the media.

As of March 10, HDB only accepts valuation requests from buyers after the price has been agreed upon. Prior to that, sellers could obtain an official valuation from HDB, which they used as a benchmark price to negotiate with buyers.

PropNex Realty agent Michelle Lai noted that there had been confusion for a couple of weeks.

While buyers have a better understanding of the new policy now, they are still reluctant to make a decision because they are hoping for better deals to come.

"I believe that buyers are still holding on, waiting for the market to drop further," said Dennis Wee Realty agent Priscilla Pang.

Aside from this, buyers are also worried about unforeseen surprises.

Notably, the HDB valuation determines the amount of Central Provident Fund (CPF) savings that they can use to finance their acquisition as well as the maximum housing loan.

So if the agreed price is higher than the HDB valuation, buyers would have to pay the excess in cash, also known as cash-over-valuation (COV).

Buyers are now more cautious with their offers because, unlike in the past, they do not know the cash premium when they agree on a price.

"It's a guessing game. If their finances are tight, they bear the risk (of a high cash outlay)," Singapore Estate Agency agent David Ang said.

Moreover, backing out of the deal means losing the money they paid the seller for an Option to Purchase, which is usually around $1,000.

Dennis Wee Realty agent Judy Tan advises buyers to set aside enough cash – at least $10,000 – to avoid getting caught out.

Muneerah Bee, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email muneerah@propertyguru.com.sg

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