neubie 2 Report post Posted October 24, 2010 http://sg.yfittopostblog.com/2010/10/24/hd...-illegal-deals/ Some HDB flat sellers are getting into illegal deals with their buyers to overstay in the sold flat, past the legal date that they have to vacate the flat. These sellers are forced into such deals due to the recent cooling measures introduced for the property market, reported The Sunday Times (ST). The new rules state that if HDB owners hope to get an 80 per cent home loan for a new flat, they have to prove sale of their previous flat through an official letter from the HDB. Otherwise, these sellers can only get 70 per cent financing for their new property and have to pay 10 per cent more in downpayment. However, the HDB letter is usually issued only some six weeks before the legal completion of the sale – a timeframe that is too tight for sellers to find another flat, renovate it and move in, noted the same paper. Property agents told ST more than half of resale transactions are affected. They also pointed to HDB upgraders as the most affected because they are not cash rich and cannot afford to pay the additional downpayment costs. To give themselves more time, some sellers then engage in verbal or written agreements to overstay in their sold flat, perhaps by renting it from the new owner. This move is illegal as under HDB rules, a buyer must live in this flat for at least five years before renting it out. Other HDB sellers may choose to look for short-term rentals of one to three months, but this means they not only have to move twice but also face difficulty securing such rentals since most contracts are for at least six months. PropNex chief executive Mohamed Ismail suggested allowing 80 per cent financing for all HDB home owners but they must sell their homes within three to six months. He argued that since no household is allowed to own more than one HDB flat, he doesn’t see why the new rules have to apply to HDB owners. Chairman of the Government Parliamentary Committee for National Development and Environment and West Coast GRC MP Cedric Foo agreed and told ST that HDB owners who move to other HDB flats are unlikely to be property speculators and added that it was worth raising this issue to HDB to see if there are alternatives. Share this post Link to post Share on other sites
therat 18 Report post Posted October 25, 2010 this practise has been in market for yrs. Why say 70% cause it? Share this post Link to post Share on other sites
bepgof 20 Report post Posted October 25, 2010 (edited) this practise has been in market for yrs. Why say 70% cause it? Don't quite understand: 1. Seller cannot buy house(cannot sign OTP) (say hdb resale) before receiving "this letter"? 2. Only receiving this letter meaning seller is "clear" from the loan? Thus can get new loan at 80%? 3. If "can afford" to get 80% loan only, but "can't affor" for 70% loan, why step into property sale? Backside itchy? Sleep at nights too peaceful liao? Edited October 25, 2010 by bepgof Share this post Link to post Share on other sites
therat 18 Report post Posted October 25, 2010 Don't quite understand: 1. Seller cannot buy house(cannot sign OTP) (say hdb resale) before receiving "this letter"? 2. Only receiving this letter meaning seller is "clear" from the loan? Thus can get new loan at 80%? 3. If "can afford" to get 80% loan only, but "can't affor" for 70% loan, why step into property sale? Backside itchy? Sleep at nights too peaceful liao? some ppl want to upgrade but not enough cash for the 30% deposit. Share this post Link to post Share on other sites
bepgof 20 Report post Posted October 25, 2010 (edited) some ppl want to upgrade but not enough cash for the 30% deposit. You don't get what I mean: 1. Can they(hdb resale seller)buy (sign OTP)another hdb resale without the letter, if they got money? Or, their existing loan also fully paid off. Edited October 25, 2010 by bepgof Share this post Link to post Share on other sites
therat 18 Report post Posted October 25, 2010 You don't get what I mean: 1. Can they(hdb resale seller)buy (sign OTP)another hdb resale without the letter, if they got money? Or, their existing loan also fully paid off. Can. I think this news is mainly referring to those cash limited or those try to wear a slightly bigger hat Share this post Link to post Share on other sites
bepgof 20 Report post Posted October 25, 2010 (edited) Can. I think this news is mainly referring to those cash limited or those try to wear a slightly bigger hat In other words, gov "forces" those with "smaller head but want to wear bigger hat" to: by/if they were 1. take 2nd HDB loan, 50% cash proceed back or $25,000 back. "No juice" for seller. 2. force them( still on to existing house)to take 70% loan by issuing the letter "late". Letter as cut off point for loan clear, so can proceed to take 80% for new purchase? 3. Like that the "bridging loan" mkt will boom already lah. Gov pushes left, ppls go right, push left & right sametime, ppls go top or bottom, seal the top & bottom - explosion liao. Edited October 25, 2010 by bepgof Share this post Link to post Share on other sites
Roflmaoxz 0 Report post Posted October 28, 2010 (edited) this practise has been in market for yrs. Why say 70% cause it? May I ask, is this due to poor time management? Edited October 28, 2010 by Rof|maoxz Share this post Link to post Share on other sites
Roflmaoxz 0 Report post Posted October 28, 2010 Don't quite understand: 1. Seller cannot buy house(cannot sign OTP) (say hdb resale) before receiving "this letter"? 2. Only receiving this letter meaning seller is "clear" from the loan? Thus can get new loan at 80%? 3. If "can afford" to get 80% loan only, but "can't affor" for 70% loan, why step into property sale? Backside itchy? Sleep at nights too peaceful liao? Hi bepgof, these recent new measures also got me confused. If let's say my BTO's Estimated Completion Date is 1Q 2014, Estimated Delivery Possession Date (EDPD) is 31 Mar 2015. So put it simply EDPD is the date of collection of keys? If I have an existing resale flat, by law when must I sell my resale flat? Thanks. Share this post Link to post Share on other sites
therat 18 Report post Posted October 28, 2010 May I ask, is this due to poor time management? not really. Different seller has their own story to tell. Most common is sell before buy. So in-between they need place to stay as waiting for their "buy" to be complete and renovation Those doing contra will have this problem Share this post Link to post Share on other sites
therat 18 Report post Posted October 28, 2010 If I have an existing resale flat, by law when must I sell my resale flat? Thanks. Within 6mth you receive your BTO key, you need to sell away the existing resale flat Share this post Link to post Share on other sites
Roflmaoxz 0 Report post Posted October 28, 2010 (edited) not really. Different seller has their own story to tell. Most common is sell before buy. So in-between they need place to stay as waiting for their "buy" to be complete and renovation Those doing contra will have this problem Most likely me will kana hit by this contra thingy, unless I move my whole gang to my parent's flat temporarily. Within 6mth you receive your BTO key, you need to sell away the existing resale flat Thanks for the information. Edited October 28, 2010 by Rof|maoxz Share this post Link to post Share on other sites
