Help: OTP Bank Loan > Real Purchase Price

[solarius]

Hi all,

Need your expert advice again!

My agent approached me and asked me to accept an offer for my unit e.g around 900K.

However in the OTP, the price that the buyer is paying for my unit is 1 Million.

The agent explained that this is done so that a higher bank loan can be obtained. Is this illegal or will cause problems? I don't feel right about this.

Do advise please!

[kane]

huh? this isn't allowed.

[bargain hunter]

clap clap. agent chut stunt liao. time to report to CEA to kick him out.

if this practice is not clamped down, it will simply lead to a spike in reported prices to new records and send the PPI surging instead. so much for cooling measures. PPI suddenly surges and causes a rush to buy instead.

[Regulators]

just report this agent to CEA, weed him out

[joelx]

A few things tht need to clarify..I thought bank will only loan say 60%of the VALAUTION and not base willing seller/buyer price?

2nd, if OTP is $1m will u incure higher agent fee or property gain tax or stamp duty? if Yes , who bear?

3rd, Since thts the arrangement can u actually ask for additional $30k so u also gain from the deal?win win win situation. All parties benefited.

4th, wat benefit u get if u reported the agent to authority?no benefit!! but breaking others rice bowl, if u feel not comfortable, just back out la.

5th, consult a lawyer on the case if authorities finnally find out. I guess u can always tell the authorities u decided to give $100k discount in last minutes because u need the $ fast and dun want the deal to call off.

6th who knows maybe in future u need such arrangement frm the agent too.

I AM NOT AN AGENT

[marc2050]

If you go ahead with such bogus contract, which is in black and white and legally binding, even if you get pass without authority knowing or saying anything, you will be living with it for the rest of your life. And this sort of under-the-table yet clearly in black and white is the most stupid thing anyone could do. It is like going to rob a bank with full CCTV recording all your actions. Even no one report and the bank still dont know, it is on record. Will you do that?

Stay clear of it. Live your life. Dont regret.

[orange]

Yeah, like getting filmed having oral pleasure with edison chen.

Even if the videos are not publicly released, there is a record of your oral gymnastics lying around somewhere in someone's computer.

[hopeful]

is your property still under mortgage?

putting ethics aside.
please tell the agent you agreed, and also tell him in order to keep up appearances, payments will be as if the transaction is $1mil.

when you have received the full payment of $1mil less bank loan, ignore phone calls from agents and buyer .
if agent complain, threaten him with CEA
if buyer threaten to take legal action, remember, it is all verbal

so you only win.

[proud owner]

to be fair to agent ...


this could be something suggested by buyer ...
agent might have warned buyer that its wrong, but if buyer wants to continue such trick, agent can only proceed as he wishes ..

we mustnt jump the gun and penalise the agent ...

[Laguna]

This is a very common practice where agents flipping the option to purchase.
U can report the case to CEA to clean up all these agents.
I know quite of number of agents doing this....

[thomastansb]

As an agent, you should know what is right, what is wrong. I assume an agent needs to go through some courses and includes an ethics module as well. The agent is at a bigger fault - for not rejecting the buyer outright and collaborating with the buyer to persuade the seller. He is the real devil if you ask me. 2 offences. This is ridiculous.

to be fair to agent ...


this could be something suggested by buyer ...
agent might have warned buyer that its wrong, but if buyer wants to continue such trick, agent can only proceed as he wishes ..

we mustnt jump the gun and penalise the agent ...

[proud owner]

As an agent, you should know what is right, what is wrong. I assume an agent needs to go through some courses and includes an ethics module as well. The agent is at a bigger fault - for not rejecting the buyer outright and collaborating with the buyer to persuade the seller. He is the real devil if you ask me. 2 offences. This is ridiculous.

i said before

a professional agent will advise both buyer and seller the real value of the property based on location, renovations, comparables in vicinity, etc

they know what is the right value and what is not

but our agents in spore NEVER do that .. why ?

becos the sellers all want to see FUTURE values

so that is also wrong but we never once said the agent is at fault ? why now ?

so in that aspects ALL AGENTS are unprofessional ...so are the sellers

[hopeful]

wah, people here so ethical.

if the seller go along the plan, and then later refuse to return the $100k, can he do so safely?

[thomastansb]

My advise is never do this. Reasons being:-

1. There are similar stories on such practices. You need to go jail if the authorities know about this. 100% go in. Why take the risk? There was this case where the agent, buyer, seller went to jail. The lawyer handling this case fought for 7 years and spend 1 million to clear his name.

2. If IRAS choose to tax you, you will be taxed on 1M. Not 900k. If you protest and say it is 900k, you are going jail as well.

3. You open yourself to all possible legal lawsuits. You have to know this is a scam to cheat the bank into releasing more $. The bank has the right to sue you, buyer and the agent to recover the cost + legal fees + damages + opportunity costs if this money is not disbursed. I believe this figure is not going to be small. 6 to 7 figures. Court fee alone will kill you. After you are made a bankrupt, you still need to go jail.

4. Agent fee is based on 1M, not 900k. 2% (or whatever that was agreed) x selling price. If you protest to CEA, you go jail too.


So you are putting yourself into a very disadvantaged position with a high probability of going to jail and be made a bankrupt. Unless you are paid a million to do that, if not, why are you taking such a BIG BIG risk? I hope this will discourage you to do that but you have to decide for yourself.

Hi all,

Need your expert advice again!

My agent approached me and asked me to accept an offer for my unit e.g around 900K.

However in the OTP, the price that the buyer is paying for my unit is 1 Million.

The agent explained that this is done so that a higher bank loan can be obtained. Is this illegal or will cause problems? I don't feel right about this.

Do advise please!

[thomastansb]

Head don't meet tail. I am just commenting on your statement "don't penalise the agent". In actual fact, the agent has committed a grave offence, TWICE.

i said before

a professional agent will advise both buyer and seller the real value of the property based on location, renovations, comparables in vicinity, etc

they know what is the right value and what is not

but our agents in spore NEVER do that .. why ?

becos the sellers all want to see FUTURE values

so that is also wrong but we never once said the agent is at fault ? why now ?

so in that aspects ALL AGENTS are unprofessional ...so are the sellers

[taggy]

wah, people here so ethical.

if the seller go along the plan, and then later refuse to return the $100k, can he do so safely?

is this call high risk high gain hahahahah

[hopeful]

My advise is never do this. Reasons being:-

1. There are similar stories on such practices. You need to go jail if the authorities know about this. 100% go in. Why take the risk? There was this case where the agent, buyer, seller went to jail. The lawyer handling this case fought for 7 years and spend 1 million to clear his name.

2. If IRAS choose to tax you, you will be taxed on 1M. Not 900k. If you protest and say it is 900k, you are going jail as well.

3. You open yourself to all possible legal lawsuits. You have to know this is a scam to cheat the bank into releasing more $. The bank has the right to sue you, buyer and the agent to recover the cost + legal fees + damages + opportunity costs if this money is not disbursed. I believe this figure is not going to be small. 6 to 7 figures. Court fee alone will kill you. After you are made a bankrupt, you still need to go jail.

4. Agent fee is based on 1M, not 900k. 2% (or whatever that was agreed) x selling price. If you protest to CEA, you go jail too.


So you are putting yourself into a very disadvantaged position with a high probability of going to jail and be made a bankrupt. Unless you are paid a million to do that, if not, why are you taking such a BIG BIG risk? I hope this will discourage you to do that but you have to decide for yourself.

so if seller insisted that the agreement was $1mil and not $900k? He can lie well through his teeth and no proof otherwise?
what are the options for buyer and agents?
report and all 3 go to jail? how to provide proof etc.

think only if seller is stupid and transfer 100k to buyer, then it maybe intepreted as the original intention is 900k

[thomastansb]

TS already said inflate price by 100k to reflect 1M in option. So where do you think this 100k will go? Pretty obvious isn't it?

As for proof, well, you can lie. All 3 can lie as a matter of fact. It just take 1 party out of 3 to give up after hours of grilling and all 3 can go jail.

Which is why I concluded, why take the BIG risk if you have nothing to gain?

so if seller insisted that the agreement was $1mil and not $900k? He can lie well through his teeth and no proof otherwise?
what are the options for buyer and agents?
report and all 3 go to jail? how to provide proof etc.

think only if seller is stupid and transfer 100k to buyer, then it maybe intepreted as the original intention is 900k

[hopeful]

TS already said inflate price by 100k to reflect 1M in option. So where do you think this 100k will go? Pretty obvious isn't it?

As for proof, well, you can lie. All 3 can lie as a matter of fact. It just take 1 party out of 3 to give up after hours of grilling and all 3 can go jail.

Which is why I concluded, why take the BIG risk if you have nothing to gain?

At the end, 100k go to seller's pocket la.
convince the buyer and agent that to make it convincing,have to transact as if the actual price is $1mil, stamp duty etc, agent fees etc. After done, then seller will put back the 100k less increase in 100k due stamp duty and agent fees.

does it look real enough?

and then after official transaction is completed, back out. If they want to sue, make them understand the possibility that all 3 will go to jail, buyer, seller and agent. Agent will fight on your behalf - so it is 2 against 1.

Give them a book on Game Theory, especially the example on Prisoner's Dilemma. Give them example of past cases where all 3 parties go to jail.
So if buyer want to cut his nose to spite his face, so be it.

Of course, I won't risk jail for a paltry $100k. The payoff is not enough. Perhaps $50million will do the trick for me

[focus]

is your property still under mortgage?

putting ethics aside.
please tell the agent you agreed, and also tell him in order to keep up appearances, payments will be as if the transaction is $1mil.

when you have received the full payment of $1mil less bank loan, ignore phone calls from agents and buyer .
if agent complain, threaten him with CEA
if buyer threaten to take legal action, remember, it is all verbal

so you only win.

CLAP CLAP! One moutain still got another higher moutain behind. Your scheme is doable and all within legal means.. Give them a taste of their own medicine.


Anyway, I would break the ricebowl of the agent for sure if i can get evidence he asked me to get only $900k when the contract is $1mil.

Whether the agent is forced to do it or not, it does not matter. The fact is he did it and he should be punished for it.

[kingkong1984]

Hi all,

Need your expert advice again!

My agent approached me and asked me to accept an offer for my unit e.g around 900K.

However in the OTP, the price that the buyer is paying for my unit is 1 Million.

The agent explained that this is done so that a higher bank loan can be obtained. Is this illegal or will cause problems? I don't feel right about this.

Do advise please!

Just grant the option at your selling price. Otherways let agent play with buyer. You should never grant two live options at the same time.

[Concours]

A few things tht need to clarify..I thought bank will only loan say 60%of the VALAUTION and not base willing seller/buyer price?

2nd, if OTP is $1m will u incure higher agent fee or property gain tax or stamp duty? if Yes , who bear?

3rd, Since thts the arrangement can u actually ask for additional $30k so u also gain from the deal?win win win situation. All parties benefited.

4th, wat benefit u get if u reported the agent to authority?no benefit!! but breaking others rice bowl, if u feel not comfortable, just back out la.

5th, consult a lawyer on the case if authorities finnally find out. I guess u can always tell the authorities u decided to give $100k discount in last minutes because u need the $ fast and dun want the deal to call off.

6th who knows maybe in future u need such arrangement frm the agent too.

I AM NOT AN AGENT

Complain. Complain to CEA.

Make sure this types of agent lose their ricebowl. Otherwise some other day he will con another gullible client.

If agent don't have the integrity, they should be jailed. Period.

Why go thru all that trouble with lawyers, police and banks? Quick! Expose that agent!

And yeah, you're not an agent....just questionable ethics.

[lifeline]

Just grant the option at your selling price. Otherways let agent play with buyer. You should never grant two live options at the same time.

agree that we should just follow the rules.

as pointed out already by many, there are so many implications to consider, many of which are beyond your control. also not worth the time and effort to complain about the agent - need evidence, get called up, and not much point trying to second-guess his real intentions.

be firm. tell the agent that you won't participate in this game; just take it or leave it.

do update us on your followup action, unless it cannot be posted.

[EBD]

4th, wat benefit u get if u reported the agent to authority?no benefit!! but breaking others rice bowl, if u feel not comfortable, just back out la.
I AM NOT AN AGENT

Taking criminals out of the system benefits others who may fall prey to them. I don't think anyone should feel bad about breaking the rice bowl of criminals. No one is forcing him to behave corruptly. He could just be honest like the rest of us. What strange thinking you have. What next, don't report murderers because they not killed me yet?

[hopeful]

Is it a crime if it does not happen?

quick, make the OTP $1million.

later you will deny everything and agent definitely will back you up. It is his own livelihood and freedom at stake so it will be 2 against 1.

[proud owner]

Head don't meet tail. I am just commenting on your statement "don't penalise the agent". In actual fact, the agent has committed a grave offence, TWICE.

we do not know for a fact if it was the agent's idea or the seller's



or i am saying is that seller is equally at fault ... agent is only the media between the buyer and seller ...

if the agent is SOLEly at fault then what about the seller ??

i did not say that scheme is right or wrong ,, i am only commenting that in many cases ..its the seller's idea ... amd agent here in spore are NOT professional even .. to advise them ... and to penalise or jump at agent without knowing if it was his or the seller's doing ... is wrong as well

[Wee Boon]

Hi all,

Need your expert advice again!

My agent approached me and asked me to accept an offer for my unit e.g around 900K.

However in the OTP, the price that the buyer is paying for my unit is 1 Million.

The agent explained that this is done so that a higher bank loan can be obtained. Is this illegal or will cause problems? I don't feel right about this.

Do advise please!

Since you don't feel it right then don't accept it, ask the agent revert back to actual selling price in the OTP. Why take risk?

[ay123]

is it the same method as car overtrade? is car overtrade illegal?

[thomastansb]

My point is - I don't really care seller ask or agent suggest. To me, the agent is breaching the law, TWICE. First by not rejecting the buyer (or suggesting to buyer, whichever is the case), second by persuading the seller.

I am just commenting on your statement - Don't penalise the agent. (second time I am saying this)

In short, I just rebutt why don't penalise the agent when he/she commit the offence TWICE?

I don't care if the seller or buyer at fault. Not my concern. My concern is about the agent all these while. Agent SHOULDN'T HAVE PROCEEDED AS HE WISHES !!!!!!

I hope I make myself clear this time round.




This is your post:-

Originally Posted by proud owner
to be fair to agent ...


this could be something suggested by buyer ...
agent might have warned buyer that its wrong, but if buyer wants to continue such trick, agent can only proceed as he wishes ..

we mustnt jump the gun and penalise the agent ...

we do not know for a fact if it was the agent's idea or the seller's



or i am saying is that seller is equally at fault ... agent is only the media between the buyer and seller ...

if the agent is SOLEly at fault then what about the seller ??

i did not say that scheme is right or wrong ,, i am only commenting that in many cases ..its the seller's idea ... amd agent here in spore are NOT professional even .. to advise them ... and to penalise or jump at agent without knowing if it was his or the seller's doing ... is wrong as well

[vip]

Why make a big fuss here? There are property deals concluded everyday not going by the books. While some are illegal, more are fall in grey areas.

After last August's cooling measures, I also received buyer offers for my properties suggesting a much higher offer than asking price, but with cash rebate or stamp duty paid by seller after handover.

The market was not that desperate at that time. I had other 'normal offers' coming in and I don't have to consider these 'special deals'.

With the new Jan 14 measures, the problems are:

1) Buyers don't have enough cash for 40% downpayment + stamp duty + legal fee;

2) Sellers getting difficult to find eager and eligible buyers; and

3) Agents cannot close that many deals.

So don't be surprised to see how people try to work around it to get the deals closed.