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

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

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)

THE RESERVE RESIDENCES $4,215,000 1625 $2,593 99 yrs (2021)
PULLMAN RESIDENCES NEWTON $3,623,400 1163 $3,117 FH
ONE BERNAM $3,532,000 1421 $2,486 99 yrs (2019)
NEU AT NOVENA $3,333,120 1302 $2,559 FH
ENCHANT $3,133,300 1087 $2,882 FH

Top 5 cheapest new sales (by project)

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

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

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

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

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.

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