Hi all, being a first time seller, I need advice from you sifus out there.

I had received the keys to an apartment last year and put it up for sale for almost 8 months to date.

2 months ago, I applied to refinance it as the previous bank (local) gave higher rates and also, terrible service as they were not very helpful with my questions. I actually banked in more money (around 10k) as repayment but they hadn't noticed and hadn't contacted me with options for me. I then wanted to withdraw that extra money but they won't let me even though I appealed.

I realized nothing was done by the bank when I received the keys and so I decided to refinance it with another bank 2 months ago.

Out of the blue, a buyer contacted me almost a month ago and had a look at the apartment, liked what he saw and we agreed at 1XXk. Please note that, being a noob, I didn't ask for any deposit as the buyer said he wanted to apply for a home loan first and if he got it, then he will buy the apartment off me. I then intro-ed my homeloan banker friend to him and he applied for the homeloan via my banker friend.

While the buyer was waiting for response on his application of home loan, my refinancing bank lawyer contacted me and said that there was 2.5% left which my developer had not billed to the previous bank. I am not too sure what this 2.5% is but the lawyer explained that it won't be billed before 12-18 months after handover of keys as this is a move to protect the owner from defects and the developer can use that 2.5% to repair those defects. So that 12-18 months is some sort of protection/warranty for owners against the developer. My 1st question: Can someone explain this?

Anyway, back to my scenario, my 2nd question: can I request the buyer to add 2.5% to the 1xxk since I do not want to fork this out on my own? * I am surprised that even I want to sell the property, I have to pay to sell...*

A day after my refinancing bank lawyer's call, the buyer called me to say that his homeloan is approved and we should meet up soon to draw a SnP.

I've been reading this forum so I know I can use his lawyer to arrange this and save cost on my side here.

Also, today, another person called me to ask to view my apartment and I've set it within the next 7 days.

My 3rd question is: if this person offers me a higher price, do I have the right to cancel my initial arrangement with the other buyer who applied for the homeloan since this buyer may offer me a higher price? Technically, I hadn't accepted any $ booking/deposit from the other buyer and the only paper drawn was the agreement paper which the buyer and I signed which indicates who and where we both are staying and the selling price agreed on :1XXk so that he can apply for that homeloan.

I wish to minimize my loss as I have only aimed 5% more than my purchase price as the selling price initially so that I won't have such a hard time attracting buyers. 5% is to cover interests and all those additional $ to pay to buy it back then. So, I really not making anything from this. I may even be making a loss. But I am willing to go through this with that as long as I do not have to fork out this 2.5% by myself.

What will you all advise? Please respond ASAP. I am losing sleep over this being a first time seller. Many thanks in advance.

the 2.5% is the last payment of your house price. Usually the bank will not release it to the developer until strata title is out. If u were to sell or refinance the house, u have to pay up the 2.5% to the developer to enable u to sell or refinance the house (only if the bank have not finish releaseing the amount u loan). If u dont pay, the developer will not let u sell the hse or rather will not release the documents for further processing. Since u refinance, besides paying the 2.5%, are u aware that u might have to pay penalty to the existing bank becoz of early release? (but of coz some loans do not have to pay the penalty but i think u better check yours)

Hmm...yes you can choose to charge your buyer higher geh....but u will have to fork out the money 1st to pay it else u cannot sell the house in the 1st place. Maybe u can nego with the buyer to pay u 1st, but usually nobody will give u the money unless S&P is signed, where u can collect 10% of your asking price from your buyer. But bare in mind, when S&P is signed, u must pay all outstandings to the bank oredi.

This post has been edited by mIssfROGY: Jul 1 2008, 02:31 AM

Tq mIssfROGY for the response. I checked with the existing bank already- it's out of the drawdown period *that's how the bank term it but the bank officer didn't want to spend a lot of time explaining that to me* Hence, my bad impression of them. So, no penalty she said..unless got hidden charges la.

Ok, I will try to nego as you advised. If that buyer doesn't want to help pay that 2.5%, should/can I layan the latest buyer for viewing and if he offer me a higher price, can I choose to cancel that agreement I had with the initial buyer who I didn't ask for booking/deposit $? I really don't want to pay that 2.5% as my cash is low.

Also, you mentioned: "when S&P is signed, u must pay all outstandings to the bank oredi. "Meaning, whether or not the buyer got the loan, on my side, say if I borrowed as an example, 100k from the bank earlier to buy this property, I have to have paid the bank 100k and then only I can sell this property by signing the S&P with the buyer? Is that what you mean?

Yes, I am still awake thinking about this matter.

actually u cannot tell the buyer to pay for u that 2.5% (not nice to hear from buyer view becoz its your cost of the house)....but u can raise your selling price instead. Hmm..i m not sure how is your agreement like with the buyer so i cannot advise u whether u can just canx it like that. But since you didnt accept any booking money, i think its ok kua, but u better check.

Hmm..
how to put it....

Lets say your house price is 200k
You paid 100k downpayment to the developer

Bank Loan is 100k
Bank released to developer = 95000
Bank Havent release (2.5% of 200k) = 5000

So meaning, if u havent settle this 2.5%, u cannot refinance or sell your house. Even if u think u can sell, in the end, your developer will ask u for that 2.5% in order for them to provide the documents for processing becoz you are still owing them that 2.5%. (It can be more, but in your case its 2.5%)

U can also ask your bank to settle that 2.5% geh (becoz its the loan u took from them but they havent pay to developer yet).....but usually they wont do it. But depends la....try to nego.

And another thing.....your loan not drawdown yet (becoz u said bank still havent release the 2.5%)....
SO, in your s&p stated penalty on 1st drawdown or last drawdown? It varies from bank to bank.
And how many years is your loan with the bank oredi? Usually within 3-5 years will kena penalty.

I also understand your situation geh....hahah coz i also stucked in refinancing the last time. I only prepared money for penalty (few Kksss).....then suddenly come letter ask me to pay the final 2.5%. I oredi told my new bank....they say no prob can one, no need to worry. Then when everything's done, they come tell me they overlooked that part eventho i reminded them several times, so in the end gotto fork out another few ksss. Sometimes, there r alot of things they duwan to tell u until last min. SO better check everything especially the additional payments part.

This post has been edited by mIssfROGY: Jul 1 2008, 03:31 AM

If I tell the buyer that I increase the seller price and he doesn't want it at that, will he lose his home loan? Since he did apply for that homeloan for my apartment? I will go with your suggestion of increasing the seller price coz I really cannot fork out that 2.5% in cash.. cash flow very low at the moment. Hate to increase but I have to. The buyer wants to buy my place to get married to his fiancee...feel a bit bad!

Sigh, I called the bank so many times (most of the times, I couldn't get through..the lines are always engaged - I don't like that bank - local..) and asked and they keep telling me drawdown period over. I took the loan from 2003 so it is possible that it really is out out the drawdown period as the bank told me. That's why I was so surprised that the final 2.5% is not out yet. So technically, need to add another 12-18 months to that 3-5 years drawdown period for that developer to settle the defects and all? So much to learn. Lucky this property is not super expensive else, I have more to risk!

Anyway, thanks so much for the advice. I will also meet this new potential buyer in case the initial buyer pulls out if I increase my seller price..

If I choose to cancel my refinancing, will I still need to pay few k for cancellation (penalty perhaps)?

his loan is just approved, not signed, so he won't lose.

the 10K extra u paid u have to write in to withdraw, if ur loan is the real flexi loan where u can withdraw thru ATM card / cheque.

I just sold mine while the final 2.5% is not out yet, SnP signed.

u havent signed anything for refinancing, so u don't have to pay anything.

About that 10k, I have written in and appealed 2x. That local bank still refuse to give it back to me because they said they assumed I put in extra for advance payment. I was a bit angry They didn't even ask me why I put in extra when extra zeros appeared on my bank statement for almost 9 months. This prompted me to refinance and being a loan drawn almost 5 years ago, today's rates are more flexi and lower as compared to mine (since almost 5 years old). My loan isn't a flexi one. Something about calculated on monthly rest..or something like that.

How did you sell it without paying the final 2.5%? The bank you loaned from allow?

I had submitted my application document and a huge stack of signed SnP copies to the bank's lawyer's office wor. Does that mean I haven't signed for refinancing since the refinancing bank lawyer is telling me my original loan bank from 5 years back hasn't paid the developer the last 2.5%?

Please advise.

have u asked ur current loan provider to revise ur rate by writting in ? u can do so actually to save cost n effort.

I have just signed SnP to sell, my bank haven't advised me on 2.5% yet, most likely will ask me to pay 1st but i have some advanced payment in my loan, so i will ask them to offset with my advanced payment. u can ask to utitlise ur 10K to offset ur 2.5% n see.

may i know which bank tht refuse to give back ur 10K ?

1 question here, if the bank did not release the final 2.5% to developer, does that mean when you want to settle or refinance your loan, your loan amount is less 2.5 % ?
the only hassle i think, is you have to pay up front the 2.5% which you will eventually get back from your sale of your house right ?

all loan has to be fully disbursed b4 refinancing, so u have to fork out ur own money 1st. then refinance. better way is refinance with the same bank by requesting a better rate.

So does that mean, let say I still have 100k loan remaining, I need to fork out 100k in order for me to refinance the home?

nope, i mean the loan has to be fully disbursed to the developer, in her case, the final 2.5% is not disbursed yet.

OHhh, then most proly be4 S&P signed also can sell then.
Please do update us on whether u need to pay the 2.5% or the bank auto release the money to the developer?
HAhaha really need to b well-equip with this info oredi

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Added on July 1, 2008, 11:26 amhmmm ya i think so.
So far our scenario is all the last 2.5%....what about if the bank havent disburse lets say 75% of the loan?

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Added on July 1, 2008, 11:37 amyeah if u settle the 2.5% with developer, then your loan wif bank will less 2.5%.

In my case of refinancing, i have to settle the 2.5% to developer. Then because refinancing takes MONTHS.....eventho i have already paid (and the developer obviously knows), the developer go ask bank to disburse summore the 2.5%!!

Then i wrote in letter to bank to stop payment becoz oredi paid. But the bank disbursed the money oredi. Then gotto write in to developer to refund. Then later developer call and say cannot refund becoz bank asking them back for the refund to refund me back one big circle.....

So....moral fo the story.....no matter wat, u still get back the 2.5% u paid, but later on.

Whereelse in sales of house, ya, u will get back if you sell your house at a higher price than your initial price or same.

This post has been edited by mIssfROGY: Jul 1 2008, 11:37 AM

Wat I thinks is PROMISE is PROMISE. From the 1st stage, both of you are agreed that you will sell your property to him wihout get the deposit from him.
If in first stage, you had explained to him that you might sell to other people or increase your property price in time without deposit, and IF the buyer agree this statement, should be fine. But if not, that is "BROKEN PROMISE".
Just thinks, when this kind of issue happen on you, what do you fear?
If 1st stage, you want the deposit from him, I thinks most people will agree it and bear their own risk.
That is what I thinks....just my PO..

Hi hi, I didn't know there is an update as there were no email notifications. So I didn't check.

Anyway, thanks to everyone who responded.

Yew Khuay, I didn't ask the current loan provider to revise my rate as I had already appealed 4 times via letter/write in to ask for that 10k back and even that, takes a month for one reply to come back to my appeal each time. So I kind of gave up with them and went to look for another bank to refinance. The refinancing bank is a foreign one. This bank which refused to give back 10k is H*.

n73me, technically yes, the bank should deduct that 2.5% from the loan amount , according to the refinancing bank which I've engaged to help out with the sale as well as I knew the bank officer there who was kind enough to guide me and advice all the technical things. But looking at mIssfROGy's response, the developer got that 2.5% which still is a 100% of that loan.

And to yewkhuay's response saying that I have to fork out own money 1st before I want to either sell/refinance, that is true. The refinancing bank which is handling the selling too says so.

YewKhuay, I wrote in 4 times to withdraw but that bank still don't give. Also, you said his loan is just approved, not signed, so he won't losel. I don't know if he had signed or approved or not but the bank which loaned him his money is sending a valuer to my property for viewing tomorrow. What stage is that at, if you can tell:?

You mentioned you sold yours before the 2.5% is not out? The refinancing bank which I asked to help approve that loan for the buyer mentioned I have to bear the 2.5% before I can sell it. And the same person said that if the original bank did not release the final 2.5% to the developer, it will deduct from my loan amount.

I hadn't set the selling price of my aparment higher than 5% of the buying price. I think I will rugi from this one. As I said, I am 1st time seller. I hope I will get at least that 2.5% back when ding dong ding dong over between the developer and original bank in time to come.

And Eagle.ng, I haven't cancelled the agreement with the buyer. It's just that I do not have the cashflow to come up with that 2.5% which I hadn't expected (who needs to pay when selling things la...my initial reaction!) . 1st stage, he said he didn't want to give deposit incase his bank loan that he's applying for my property doesn't get approved. Then he will lose his deposit. Being a kind hearted person, I agreed. Maybe I need to learn my lesson here and not be such a kind hearted person lor..

But I will tell the buyer that I am actually forking out the 2.5% out of my own pocket so that he can have my property. I really feel upset about this. As a seller, it is unfair to me as well! I am getting a very bitter experience through this selling..

What say you all?

if the bank send valuer, the loan is not approved yet.

have u signed S&P ? if u havent, u can choose not to sell anytime. don't worry about the 2.5%, if u fork out, u get back from buyer, otherwise add into ur loan also no difference, it's ur loan anyway.

OK, so in that case, the loan is not approved yet for my buyer.

I haven't signed the S&P. If I choose not to sell now, will a) the buyer lose his loan b) will I be blacklisted from the bank since I made them go through so much trouble to apply for the buyer to apply loan c) will I be blacklisted from the bank since they assisted in getting the buyer's housing loan approved and I'm calling it off.

I cannot ask the buyer to pay the 2.5% right. Do you mean I get back from buyer via the deposit 10% that is usually given during the S&P signing?

Loan cant be approved legally if no S&P and receipt for 10% deposit. Dont worry about your buyer too much

Dont overanalyze things. He wont lose the non-existing loan. You wont get blacklisted for giving the bank trouble (you'll only get blacklisted if you default your payment) and it's ok to change your mind.

don worry, he won't lose anything yet. and u will not be blacklisted, last minute back out happens quite often...

yes, u get the 10% from the buyer upon signing S&P b4 u have to pay the 2.5% loan.