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Thread: 107 new home buyers backed out in March

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    Default 107 new home buyers backed out in March

    The Straits Times
    Apr 23, 2012
    107 new home buyers backed out in March
    Most who forfeited option fee bought mass market units

    BUYERS of 107 new private homes had a change of heart last month and returned their units to developers.

    The numbers, contained in a report from Goldman Sachs, show that even in a hot market, some people get cold feet. The same report also stated that 100 homes were returned the month before.

    That means these buyers have paid an option fee but have chosen not to exercise the option and go ahead to complete the purchase.

    When someone buys a new condominium, they put down an initial option fee of 5 per cent to 'reserve' the unit.

    After that fee is paid, the developer of the project has 14 days or more to issue the sales and purchase documents as well as the title deed. From then, the buyer has three weeks to exercise the option to purchase the unit.

    In some cases, this whole process could take up to eight to nine weeks.

    If the buyer chooses to back out, he forfeits a quarter of the option fee, or 1.25 per cent of the purchase price.

    That could mean forfeiting $12,500 on a $1 million unit, or a $75,000 for a high-end one costing $6 million.

    The 107 units returned in March could have been bought in either January or February.

    Analysts were not surprised by the high number of options lapsing, as the number of options lapsing tends to be correlated to the number of sales made.

    Buyers bought 4,289 units in the first two months of the year.

    In March, most of the returned units came from the mass market, but this could be because more projects were launched within the sector.

    The Straits Times looked at a sample of 15 upcoming projects and found, for instance, 11 units were returned at the 689-unit Parc Rosewood in Woodlands.

    Apartments at the 99-year condominium were sold for a median per sq ft (psf) price of $994.

    Watertown, a 992-unit mixed-use development in Punggol, had 17 units returned. Units were sold for a median psf of $1,341.

    Bartley Residences, with average prices of $1,240 psf after discounts, and The Hillier, priced at about $1,289 psf, both had nine units returned.

    The luxury homes sector, which is in the doldrums, also saw some units being returned.

    For example, Skyline@Orchard Boulevard, where an apartment recently went for $4,442 psf, had one unit returned.

    Prices there could easily exceed $6.5million, as the smallest unit is 1,744 sq ft in size.

    The Scotts Tower also faced one cancellation. Earlier this year, a unit there fetched $3,567 psf.

    A property developer also said that it was normal to see some units returned every time a project is sold.

    Likewise, PropNex chief executive Mohamed Ismail noted that no new cooling measures have been introduced in the market since last December, which means many buyers could be pulling out because of personal reasons.

    'It's a glaring number but there's nothing to worry about. It's common to have a handful of units being returned every month of each project,' he said.

    Mr Nicholas Mak, head of research at SLP International Property Consultancy, also noted that the projects with the most units returned - Watertown, The Hillier and Parc Rosewood - included shoebox apartments.

    'Sometimes, people are under 'peer pressure' at crowded showflats... They go home and speak to more people and decide not to buy it. They'd rather forfeit the 1.25 per cent than regret buying it,' he said.

    Mr Ong Kah Seng, director at R'ST Research, shared similar sentiments, adding that some may have bought in haste.

    Other buyers might have been attracted to better choices elsewhere, he added.

    [email protected]

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    Return The Hillier / Watertown is the right thing to do ...
    Ride at your own risk !!!

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    Quote Originally Posted by maisonjai
    The Straits Times
    Apr 23, 2012
    107 new home buyers backed out in March
    Most who forfeited option fee bought mass market units

    Mr Nicholas Mak, head of research at SLP International Property Consultancy, also noted that the projects with the most units returned - Watertown, The Hillier and Parc Rosewood - included shoebox apartments.

    'Sometimes, people are under 'peer pressure' at crowded showflats... They go home and speak to more people and decide not to buy it. They'd rather forfeit the 1.25 per cent than regret buying it,' he said.

    [email protected]
    Should be "They go home, logged onto CONDOsingapore.com and decided not to buy it after hearing all the negative comments".

    People return units for various reasons, one of which is unable to obtain the bank loan. Not necessarily because they have changed their minds.

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    Quote Originally Posted by maisonjai
    That could mean forfeiting $12,500 on a $1 million unit, or a $75,000 for a high-end one costing $6 million.
    Wow that is a pretty significant amount even for an investor.

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    these are the same grp of ppl who in 97 bot parc oasis then realised something amiss after the went back home...

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    "October saw a total of 14 units returned at Concourse Skyline at Beach Road, 11 units at The Peak @ Balmeg in the Pasir Panjang area and five units each at Silversea at Amber Road, Tresalveo at Marymount Terrace and VIVA at Thomson Road/Suffolk Walk. Nonetheless, all these projects still saw units being sold in October."

    This happened in Oct 2008.....they must have wished they can turn back the clock. Price bottomed they return units, price hitting new peak also return....wahaha Quite a lot of emotional buyers.
    Last edited by maisonjai; 23-04-12 at 13:41.

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    Quote Originally Posted by Lovelle
    these are the same grp of ppl who in 97 bot parc oasis then realised something amiss after the went back home...
    What happened?

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    The ones having the most regret are those returned HDB flat at Duxton.
    When it was first launched in 2005/4, only $400,000, and the balance units now at $600,000+

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    Buyer's Remorse and Seller's Repentance ...

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    Quote Originally Posted by maisonjai
    "October saw a total of 14 units returned at Concourse Skyline at Beach Road, 11 units at The Peak @ Balmeg in the Pasir Panjang area and five units each at Silversea at Amber Road, Tresalveo at Marymount Terrace and VIVA at Thomson Road/Suffolk Walk. Nonetheless, all these projects still saw units being sold in October."

    This happened in Oct 2008.....they must have wished they can turn back the clock. Price bottomed they return units, price hitting new peak also return....wahaha Quite a lot of emotional buyers.
    These people who forfeit their option fee really

    Probably one of those now shouting for crash. haha...

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    Quote Originally Posted by fclim
    Should be "They go home, logged onto CONDOsingapore.com and decided not to buy it after hearing all the negative comments".

    People return units for various reasons, one of which is unable to obtain the bank loan. Not necessarily because they have changed their minds.
    DOUBLE LIKE

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    These buyers are the same kind who will after purchasing something at the shop still go around other shops to compare price to assure themselves they bought right price... When proven otherwise, they will demand a refund. COURTS is best retailer suited for them since they often have meet/match lowest prices guarantee... Well guess they can wait till COURTS also venture into property development. Never say never. Even POPULAR did. Wonder when is 7-11 turn.

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    Quote Originally Posted by phantom_opera
    Return The Hillier / Watertown is the right thing to do ...
    Yup.. both Hillier and Watertown are asking higher psf than Bartley Residences!

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    Quote Originally Posted by fclim
    Should be "They go home, logged onto CONDOsingapore.com and decided not to buy it after hearing all the negative comments".

    People return units for various reasons, one of which is unable to obtain the bank loan. Not necessarily because they have changed their minds.
    Then this group of buyers are not careful to check the bank loans they qualify before committing to a unit. Possibly they might be over-committing..

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    They might be worried that the future price that they have committed may not be able to achieve for a long while.
    Quote Originally Posted by ysyap
    Then this group of buyers are not careful to check the bank loans they qualify before committing to a unit. Possibly they might be over-committing..

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    Quote Originally Posted by ysyap
    Then this group of buyers are not careful to check the bank loans they qualify before committing to a unit. Possibly they might be over-committing..
    One thing. Kiasuism. If they don't snap up the unit in a crowded showflat, others will. 先斩后奏.

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    Quote Originally Posted by maisonjai
    "October saw a total of 14 units returned at Concourse Skyline at Beach Road, 11 units at The Peak @ Balmeg in the Pasir Panjang area and five units each at Silversea at Amber Road, Tresalveo at Marymount Terrace and VIVA at Thomson Road/Suffolk Walk. Nonetheless, all these projects still saw units being sold in October."

    This happened in Oct 2008.....they must have wished they can turn back the clock. Price bottomed they return units, price hitting new peak also return....wahaha Quite a lot of emotional buyers.
    SILVERSEA? nah never turn back. they must be shouting Heng ah! after seeing how close it is to the ECP now.

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    Quote Originally Posted by phantom_opera
    Return The Hillier / Watertown is the right thing to do ...

    Well they should not have been pressured to buy in the 1st place by peer pressure.

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    Everybody sign OTP at the crowded showroom they also want to sign.

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    Quote Originally Posted by kane
    Everybody sign OTP at the crowded showroom they also want to sign.
    eh, property agents aren't working for timeshare companies leh......no pressure tactics

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