Pay >$100K Cov Or Rent & Wait Out?

[gimz63251073 0]

well, HDB is partly at fault la. U see when they sell BTO, they always put there "instalment per month" which is calculated on 30yr old.

this gives a false impression on whether u can or cannot afford.

Affordability to me means u can pay in full with sufficient funds to retire. So if u spend 30yrs paying for HDB then how to save for retirement? That puzzles me.

When u take a loan, u are spending future $. This simply means u have less $ in future when u retire. Just whip out a calculator and punch in some numbers:

e.g. say u need $300k for retirement.

Say u spend 30yrs to pay for flat, so CPF = 0.

The 300k gonna be cash.

So where is that cash going to come from?

When evaluating affordability, we need to see many years ahead and not just the next few yrs.

[jammo89 0]

Hi people..

Just to share.. It really takes quite a bit of hunting..

Me and my wife hunted for around 2 - 3 months before getting our ideal unit.

We looked at a few requirements (We're a very young couple, with a 1.5 year old daughter =)

1) Valuation Below $300k.

2) Near a good school

3) Location ideal for my and my wife's work travelling.

We finally settled down with a Ang Mo Kio, 3 room flat.

Val: $310k

Cov: $12k

We're collecting our keys on 19th July 2011! =) Next tuesday..

Initially it was all high cov.. all asking minimum 20k - 40k.

We were looking at toa payoh / Ang Mo Kio area..

Well, our flat is at bloack 110, amk ave 4.

Within 1km to chij st nichs.

Oh ya! Going through every saturday's paper will help you a lot.

Wish you the best of luck!

[incubator 0]

Hi people..

Just to share.. It really takes quite a bit of hunting..

Me and my wife hunted for around 2 - 3 months before getting our ideal unit.

We looked at a few requirements (We're a very young couple, with a 1.5 year old daughter =)

1) Valuation Below $300k.

2) Near a good school

3) Location ideal for my and my wife's work travelling.

We finally settled down with a Ang Mo Kio, 3 room flat.

Val: $310k

Cov: $12k

We're collecting our keys on 19th July 2011! =) Next tuesday..

Initially it was all high cov.. all asking minimum 20k - 40k.

We were looking at toa payoh / Ang Mo Kio area..

Well, our flat is at bloack 110, amk ave 4.

Within 1km to chij st nichs.

Oh ya! Going through every saturday's paper will help you a lot.

Wish you the best of luck!

Congrats! =)

Was the COV already this amount or you had to bargain it down? You see, my hubby and I are the straightforward type. We see an unit, told the price, if we can afford we consider, if cannot, we walk away. So far, the COVs have been rather ridiculous, I must add.

[bepgof 20]

Congrats! =)

Was the COV already this amount or you had to bargain it down? You see, my hubby and I are the straightforward type. We see an unit, told the price, if we can afford we consider, if cannot, we walk away. So far, the COVs have been rather ridiculous, I must add.

Where got as ridiculous as this Pasir ris Blk 780, 1528sqft, asking for $900,000. COV???

[jammo89 0]

Oh.. We bargained it down from 15k.. Not much to bargain cause it was very low to begin with..

We were constantly on a lookout for urgent flats for sale, thats where the low cov is.

Bear in mind, have your loan apporved (if any).

When you see a urgent one for sale, suits your requirements, gun it down that night.

In today's market, don't really have the time to go home and consider, imho.

Next morning? Someone is on the way to put deposit.

A tip: use property guru's keyword search.

http://www.propertyguru.com.sg/singapore-property-listing?listing_type=sale&search_type=hdb&property_type=H&property_type_code%5B%5D=HDB&school=&mrt=&address=&distance=0.5&latitude=&longitude=&interest=&hdb_type_group=&minprice=&maxprice=&minbed=&maxbed=&minsize=&maxsize=&minsize_land=&maxsize_land=&freetext=urgent&minpsf=&maxpsf=&listing_posted=&mintop=&maxtop=&sort=&order=&min_latitude=&max_latitude=&min_longitude=&max_longitude=&submit=

Look at the left side, keyword is "urgent"

We got our flat at a rather low cov cause the previous owner needed to sell urgently due to divorcing reasons..

[gimz63251073 0]

most will ask for high COV as they expect buyers to bargain.

one thing i learnt: just make an offer. though it may seem far from the asking, who knows u might get a deal?

if you get outbid, then move on. There are similar units around.

[therat 18]

We got our flat at a rather low cov cause the previous owner needed to sell urgently due to divorcing reasons..

My colleague told me his cousin bought a HDB with $3K COV , also due to seller divorcing.

Low COV partly due to low floor and next to dustbin

[incubator 0]

Must bargain then jialat already. So far we only made an offer at the asking price and guess what, the owner said raise up to another $5K and then before we could make a decision, the owner decided not to sell anymore. CAN DIE.

Am going to try to make an offer anyway, the next time I see an unit that I can imagine myself living in. Sidetrack abit, how do we find out if the previous owner owed loansharks or someone died in the flat before etc? Will neighbours be truthful enough?

[Plastic3 0]

Hi Plastic3,

We are looking at Hougang (Lor Ah Soo)/Serangoon area. Will likely to redo everything so very original (or "lok") condition is ideal. The only requirement is that it has to be mid-high floor. So far the cheapest one asked for $50K COV but before you could even discuss and think about it, it was gone.

My concern is when we manage to sell this apt off and still unable to find a suitable EM, should we rent a flat (hoping that COV will drop in the next quarter) or by paying ridiculously high COV.

I heard there will be cooling measures for the COVs but looks like they are going up instead of coming down.

my personal opinion, COV is unlikely to come down much within a year (unless Mr. Khaw does something drastic),

it did dip abit around Dec to Jan period (iirc), where I managed to help a buyer buy a place for 12k COV, after that COV went up again within weeks.

Although there is a lot of talk about the govt releasing more land & BTOs, it is not going to solve the current supply & demand imbalance.

Best,

Mark

[HappyHouse88 0]

hi just to share my experience.

We decided to take the option to sell & wait/rent few mths back. here's the issues that we faced.

But the reason for us to sell and wait is not the COV but the overall prices of pty i.e. hdb as well as private.

1) Overall pte pty prices. We see the possibilities the prices will fall ~5%. 5% of 500k pty is ard $25k.

2) Sell slowly , buy slowly.

You could get a better selling price and a buying price. With time on our side, we waited 2 more wks and we managed to sell our flat for 20k more. As for buying, we saw 1 unit where the seller was first asking for 1.05mil , 1 mth back and when we asked for the best price, they wanted 1.03mil. Just yesterday, the same unit is asking only 1.02mil. Importantly thing, is not to rush in to any pty transaction. But you muz be fully aware of the mkt rate, so that you wont missed a good deal.

3) Rental expenses.

You need to calculate this carefully, assume that the cpf/cash that you free up by selling your flat, earns you $10-15k a year.

And if you add in the 5% fall in price. Your rental expenses may be covered totally.

4) Cash at hand and COV. If you are concern abt COV only, I assumed that you do not have much cash now. If by selling your flat you are not able to get >200k in cash. I advise you not to sell. Why? Rental a year is ~30k in cash. And renovation for your new house is ard 60k. And 20-60k cov. It really does not left you much cash by selling your flat. You need to re-consider your motivation to sell then.

5) HDB prices to fall.. hmmm if the price of new flat continue to be acceptable and supply increases. There is a possibility that prices may go down but not immediately. Maybe 2-3 yrs time. Remember that 1999 crisis, the prices of housing only become rock-bottom in 2002-4. So if you need the new address in 1-2 yrs time, you def be buying on the high side.

[incubator 0]

Thanks everyone for your invaluable insights.

I think I might have bought an old resale EM. I "think" because the agent (who is also marketing my apt) assured us that since we kinda like that EM, we can put the $1K option fee first. If we were to regret later and need to forgo the $1K, he will definitely "earn it back for us" when he sells our apt.

I guess it is not a 100% because the valuation is not out yet and we are staking our bet on the baseline of our agreement with the sellers. So if we estimate wrongly, we could well be paying $100K COV! *shudders* Fingers and toes crossed for now!

On the other hand, we've been enjoying the peacefulness and exclusivity of our current 999yrs apt and exchanging that for a 26-yr old HDB EM, takes a while to get used to, honestly. We don't have financial difficulty, it's just that I've quitted my job to stay at home and the thought of having money put aside for my children's education, puts my mind more at ease. I definitely do not wish to see my hubby slog so hard to allow me to spend more time with the children and still have to worry about educational funds.

OK! Positive thoughts! Now I can finally design a home with plenty of space for our little family. When that happens, I shall share my home on the T-blog chat.

Hopefully we can also stretch the time a little in selling the apt so that we do NOT need to rent that 2-3 mths to wait for the renovation to be done!

[Roflmaoxz 0]

Initially it was all high cov.. all asking minimum 20k - 40k.

We were looking at toa payoh / Ang Mo Kio area..

Well, our flat is at bloack 110, amk ave 4.

Within 1km to chij st nichs.

Oh ya! Going through every saturday's paper will help you a lot.

Wish you the best of luck!

Good buy, jammo89. A quiet neighborhood with good schools around there. Although my place is 5 mins walk to AMK hub. I still prefer your area.

322k is a reasonable price, including COV.

Can bring your girl to Melben eat sri lanka crabs, haha.

Is your blk selected for the MUP?

Edited July 19, 2011 by Roflmaoxz

[incubator 0]

Sorry! Double posting.

Edited July 19, 2011 by incubator

[incubator 0]

Sigh. Guess I have no luck to buy an EM. We must have been too excited about seeing a flat we liked and we (actually our agent) made an offer even though the valuation was not out. During the OTP period, the valuation came up to be much lower than what the seller's agent told us. Basically, we lost $1K OTP but still much better than appear on some local newspapers for paying a sky-high COV for an old flat.

So, we are back to flat hunting. And......to stick to my original plan of renting a small place first after selling my current place. SIAN x10000000000.

[whisper 0]

Hi incubator, we were also hunting for resale EM/EA/5RM since Feb until we got one in May. This is my 2nd time buying resale hdb & the current purchase experience is so much different with our first time when there was no COV exist.

It is true that nowadays resale flat sold on the same day of the open house except those at low floor. You just can't have enough time to go home to think whether you shld or not to buy it. It is so much like an auction to me. What made us really frustrated was the unrealistic COV. The figure (average $20k/25k) published officially on web and newspaper is never reflecting the true appetite of sellers. EM/EA that we viewed for the past few months requested COV of $50k/60k or even $80k!! I feel myself like a carrot with thin pocket. We ever stop viewing for more than one mth bcos we felt really disappointed by the market fever.

We then decided to stick on buying 5RM only. Save our $$ for future, either for kids or second property.

But we still fail to find one so we thought something must be wrong with our strategy. We then decided to try our luck at other areas. I understand the reason why you want to stick to that particular area. We had strong reason to choose our preference too. But the resale market may not cater the right place just to our desire. Perhaps you want to try make a change. Maybe you will find something different. Good luck!