Complete Property Market Updates of Singapore

March 30, 2008

Checklist of must-dos for HDB resale flats

Filed under: General — Propertymarketupdates @ 4:09 pm

Housing agents will soon have to walk buyers and sellers through the rules before a deal

THE process of buying a resale HDB flat will soon become more stringent before a deal can be struck.

Buyers and sellers will have to sit down with the housing agent and go through a checklist that details all the dos and don’ts, financial ins and outs, and other rules that are involved in a sale.

The aim is to ensure everyone in the process knows what he is getting into, what his obligations are and that dodgy behaviour like under-declaring prices is illegal.

‘It would also prevent situations whereby the resale transaction has to be cancelled or delayed due to miscommunication and ignorance about policies,’ said an HDB spokesman yesterday.

Last year, about 2.5 per cent of resale applications registered, or about 750 cases, ended up being cancelled.

This may not seem substantial but it shows that there could be potential buyers and sellers who need more help.

Indeed, the HDB said yesterday that it started preparing the checklist last year, a process that included consultations with industry bodies such as the Institute of Estate Agents (IEA). It also had public feedback suggesting that agents should highlight certain points to their clients.

ERA Realty Network’s assistant vice-president, Mr Eugene Lim, agreed that there was a knowledge gap: ‘A lot of buyers and sellers are quite ignorant of the whole sale process.’

The mandatory checklist will kick in on May 1. Sellers will be taken through the list before they grant an Option to Purchase to a buyer.

An agent will advise them on their eligibility to sell and the need for accurate data on things such as price, and ensure that they understand what the Option to Purchase entails.

They might not realise, for example, that once they grant a buyer an option to purchase, they cannot revoke the offer within a 14-day period.

Agents will explain the checklist to buyers before they exercise the option to purchase, such as making sure they can service the loan.

Buyers intending to take out an HDB loan, for instance, must ensure they meet loan eligibility conditions and obtain an HDB loan eligibility letter.

Although the new checklist is not in response to the recent ‘magic dollars’ scam involving sellers reporting falsely low prices, PropNex chief executive Mohamed Ismail said it will help curb the practice. It will force agents to tell buyers and sellers that false price declarations and other scams are crimes.

Housing agents already have to declare that the sale price is the true one, which means they would be aware that the scams are illegal, said ERA’s Mr Lim.

Buyers or sellers who make false declarations also face fines and/or jail time.

Agents said problems arise when buyers and sellers deal with inexperienced agents unfamiliar with HDB policies and rules.

‘More than half of the agents here are already practising what is in the checklist,’ said Mr Ismail, who is also IEA’s first vice-president.

‘It is expected of any good agent. But in this industry, a lot of them come and go, especially in a good market. And …there are many policies involved.’

There are around 30,000 agents in Singapore and the industry is largely unregulated.

Mr Darrell Chua, 32, who bought a resale flat last year, welcomes the checklist: ‘It will help those who are not familiar with HDB rules but, hopefully, lazy agents won’t turn it into some routine list that they tick off without really checking.’

Agents will have to submit the completed checklist to HDB together with the resale application. Applications that do not meet the new requirement will be rejected.

The checklist is also available in Chinese, Malay and Tamil. Agents will have to indicate what language they used to explain the information.

Source : Straits Times – 25 Mar 2008


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