How buying a condo unit with this agent resulted in a huge $380k loss for this buyer

After all these years, the Option To Purchase still terrifies me. 

If there's a reason I'll never be a property agent (besides having the persuasive power of a neurotic pigeon, that is), it will be the Option To Purchase (OTP). I've seen too many instances of things going wrong here: 

From someone dying just after signing the OTP (preventing the surviving spouse from obtaining the loan), to loans coming through a single day late (causing the deposit to be forfeited), to people who don't get in-principle approval before the OTP. 

And now, I see even being conned by a corrupt property agent doesn't excuse you from losing this deposit. 

Liu Siyu — a former realtor who pocketed money from her clients — caused the transaction of a $1.9 million property to fall through. And in the Court's ruling, it's confirmed the seller (in this case the developer) has the contractual right to retain the 20 per cent deposit. That's a loss of $380,000, on top of whatever damages were caused by the agent's embezzlement. Last I checked, I could sell both kidneys and still not cover that deposit. 

(Which, come to think of it, is quite the comment on runaway home prices)

But despite the serious financial consequences, I still meet people who treat the deposit like a minor formality. People who whip out cheque books before they even approach a bank, or wait until they have half-a-day left before finally exercising the OTP. Fortunately I'm not their property agent, because I feel a need for a Xanax prescription just watching them, let alone handling their transaction. 

Take the OTP seriously, people. Because I assure you, the seller is very serious about keeping it if they can. 

And as for corrupt property agents, once again, say it with me: don't give the money directly to your agent. They're not even supposed to handle it anyway. If cash for a transaction ends up in your agent's personal account, something isn't about to go wrong; something already has. 

Then again, for some people OTP issues may now be moot

That's because the number of HDB upgraders is dwindling. There are a number of factors behind this, but I think the last reader I spoke to described the situation in a very succinct way: 

"We can't afford your stupid condos anymore lah Ryan"

Hey, it's not as if I'm the developer. If I were, all my projects would be reasonably priced*. But I agree with most of the reasons in the linked article: tighter loan limits, higher private home prices, rising interest rates, etc. There's just one that's missing:

Greater financial maturity. 

I increasingly see people buying homes just to be, well, homes. Fewer retirement plans involve having a private property to sell — there's more interest in other options, from laddering bonds to stock dividends. These days, more people ask me what I think about annuities, endowments, etc. as well as just property. I can't actually answer that, as I'm not a financial planner (though as an unqualified non-expert, my retirement advice is to try and be born really rich). 

But in any case, I'm not against the notion of people seeing residential properties as plain old homes. 

Don't get me wrong, I still see a place for property investment; I just think it's nice that more people will look at old walk-ups, quirky boutique condos, or odd fringe areas, and see value in them. It's nice when not every property buyer's plan ends with "… and then I will be a zillionaire".

*And in Malaysia. 

Meanwhile in other serious property news…

• After Ridout Road, a lot more people are curious about what SLA rents out. We spoke to someone who has rented a walk-up from them. 
• We have some latest findings on leasehold versus freehold property. It works quite differently for landed than it does for condos; check this out. 
• HDB maisonettes often make the million-dollar list; but we still find some owners who wish they’d bought something else. 
• Can you still get a three-bedroom condo for $1.6 million or under in this day and age? Yes, yes you can. (And just like that, we brought back all the HDB upgraders).
• Some great new land plots are coming up, in this article where I previously made the mistake of writing “MacPherson” instead of Mountbatten. (I think I accidentally said that on the radio once too, so if you heard it, sorry. I don’t know why I keep making that mistake. Apologies). 

Weekly sales roundup (Sept 4 – Sept 10)

Top 5 most expensive new sales (by project)

Top 5 cheapest new sales (by project)

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	TENURE
THE LAKEGARDEN RESIDENCES	$1,088,600	527	$2,064	99 yrs (2023)
THE ARDEN	$1,304,000	721	$1,808	99 yrs (1969)
GRAND DUNMAN	$1,404,000	549	$2,558	99 yrs (2022)
THE MYST	$1,431,000	678	$2,110	99 yrs (2023)
LENTOR HILLS RESIDENCES	$1,573,000	689	$2,283	99 yrs (2022)

Top 5 most expensive resale

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	TENURE
NASSIM PARK RESIDENCES	$14,000,000	3477	$4,027	FH
ELIZABETH TOWER	$5,250,000	2928	$1,793	FH
THE SHELFORD	$5,100,000	2411	$2,115	FH
THE IMPERIAL	$3,930,000	1733	$2,268	FH
CAIRNHILL CREST	$3,910,000	1733	$2,256	FH

Top 5 cheapest resale

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	TENURE
PRESTIGE LOFT	$608,000	377	$1,614	FH
SUITES @ PAYA LEBAR	$620,000	398	$1,557	FH
EDENZ LOFT	$660,000	420	$1,572	FH
THE INFLORA	$668,000	463	$1,443	99 yrs (2012)
SELETAR PARK RESIDENCE	$708,000	527	$1,342	99 yrs (2011)

Top 5 biggest winners

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	RETURNS	HOLDING PERIOD
NASSIM PARK RESIDENCES	$14,000,000	3477	$4,027	$3,993,000	15 Years
THE SHELFORD	$5,100,000	2411	$2,115	$3,588,248	21 Years
COUNTRY GRANDEUR	$2,720,000	1442	$1,886	$1,800,000	28 Years
THE REGENCY AT TIONG BAHRU	$3,088,000	1281	$2,411	$1,688,000	14 Years
ONE DEVONSHIRE	$3,680,000	1216	$3,025	$1,440,720	14 Years

Top 5 biggest losers

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	RETURNS	HOLDING PERIOD
URBAN VISTA	$810,000	549	$1,476	-$9,482	10 Years
SELETAR PARK RESIDENCE	$708,000	527	$1,342	$50,875	11 Years
PRESTIGE LOFT	$608,000	377	$1,614	$70,500	9 Years
KENSINGTON SQUARE	$950,000	614	$1,548	$77,000	10 Years
J GATEWAY	$950,000	517	$1,839	$81,000	10 Years

Transaction breakdown

ALSO READ: We own a Normanton Park condo and make $285k per year: Should we sell to invest in stocks and rent or buy a resale unit?

This article was first published in Stackedhomes.