Previously we warned that a hot Singapore property marketwill lure dormant Singapore property agents into action. Catch words such as En-bloc are being mentioned to appeal to property buyer greed.
Between June to August 2009, despite the recession, Singapore property market has gone crazy and speculative.
Will you pay through your nose if you buy from a property developer?
Sometimes you can get a good deal. Many times you don’t. This is because the launches are timed to perfection with positive media spin, advertising campaigns, timing to launch in favourable economic cycle and rampant sentiments and feel good factor is strong.
Property agents also get in for the kill
When a condo is to be launched, these days the condominium developer will likely appoint 1 or 2 marketing property agents. These agencies then inform their property agents about the launches and they appoint agents to man the show rooms.
There is nothing too unfair about what the property agents do. They just want to sell the properties they market. Some are very honest, many just simply want to withhold information so that property buyers get hooked.
So do consumers get a choice to the best units and the best prices?
Most good deals are immediately snatched by agents.
For good property deals, Singapore property agents will buy it themselves. They may even ask their relatives to book the condo units and corner the development. These property agents then put up these property for sale again.
Genuine property buyers will have to pay more
Of course you as genuine property buyer, if you like the development, not only you have to pay the developer’s already high asking prices, you will also have to suffer paying easily 5 to 15% more because of these Singapore property speculators if you really like the condo.
This is still not the worst. Genuine Singapore Property buyers are convinced by these agents that banks can match the valuations and they place their 1% deposit.
Because developers have recently launched at very high prices already, coupled by an additional margin by Singapore property agent speculators, the asking prices cannot be matched. This means that genuine property buyers have to top up cash.
How Singapore Property Agent speculator can hold your dream home ransom.
New condo launch price = $850,000 (property loan valuation stretched to match $850,000)
Speculator buys at $850,000 and puts it up again at $920,000 (within days).
What is the true cost of speculation?
$850,000 + $20,100 (Stamp duty) – $8,500 (1% commission for selling property) = $861,600.
Speculator flips it and puts up at $920,000. (Bank cannot match $920,000 valuation)
Property agent speculator profit within a few days
Property agent flipper makes = $920,000 – $861,600 = $58,400.
These agents get wind of the launches and their timings. Sometimes they even go and talk directly to the developer to get a cheaper deal.Many people will fail to get a Singapore home loan and lose their 1% deposit. Luckily for some, they have come to us at www dot propertybuyer dot com dot sg Property buyer Singapore Mortgage consultants at SMS 9782 8606 to do an Approval in Principle for their potential purchase.
How much cash do you have to pay for the Condo?
$58,400 (extra) + $42,500 (5% cash) + $22,200 (Stamp duty) = $123,100
Suddenly you are out of budget by $80,600. Normally you can pay your stamp duty through Central provident fund (CPF), but because for sub-sale, there may not be enough time to complete the transaction and insufficient time for your lawyers to work with the CPF lawyers to disburse the funds. Instead of using your central provident fund (CPF) to pay for your stamp duty, you will have to first pay it through cash.
Do we have a choice when buying new launches?
It depends on how desperate you are to land that property. There are more than 280,000 condominiums in Singapore. If you are patient you can always find another one as good.
You can say NO to being held ransom by property agent-speculators.
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