seller tactics property

One advantage of buying a resale property is that you get to inspect the actual unit, rather than having to visualise it from a show flat.

However, this also brings some potential drawbacks – if you don’t spot a defect in a resale unit, for example, it’s up to you to fix it later (in a new launch, the developer is often on the hook for defects for at least 12 months after the purchase).

In this article, I’ll look at some seller’s tactics that can conceal serious issues, or leave you at a disadvantage. Take note of the following if you intend to buy a resale property:

  • Changing or using unusual contracts
  • Hiding changes to the property just before the date of vacant possession
  • Concealing existing damages
  • Using nearby listing prices to compare
  • Not mentioning they’re in arrears

1. Changing or using unusual contracts

Almost every transaction in Singapore will use the Law Society of Singapore’s Conditions of Sale (2012). If for some reason the seller won’t use this, or has a different version with changes, you should try to pinpoint the reason.

In particular, take note that the usual Conditions of Sale document has the following paragraph:

On Completion, the Vendor must deliver the Property in the same state and condition as it was at the date of the option or the date of the contract,whichever is earlier, (save for fair wear and tear) unless otherwise agreed to by the parties.

If you don’t have this clause, the seller isn’t obliged to fix any damages to the property at the point you receive it.

For example, if the kitchen pipes were fine when you signed the Option To Purchase (OTP), but are leaking when you get the keys, your seller wouldn’t be responsible to fix it; not unless your contract has the above clause.

Other contracts can also be amended to include unusual clauses. For example, some OTPs are written to have an even shorter validity period than the usual 14 to 21 days.

Always check whether your seller is using the conventional contracts (e.g. the template contracts on the CEA website). If not, pay attention to the reason, and the differences in wording.

2. Hiding changes to the property just before the date of vacant possession

In one of my earlier articles, I pointed out a situation where the property actually caught fire; but the seller had neglected to inform my client (if I hadn’t checked after the OTP was signed, we might not have known).

Now in point 1, I mentioned in the standard Conditions of Sale, a seller is obliged to hand over the property “in the same condition” as the date of option or contract. But some sellers are tempted to skimp on this, if they feel subsequent damages can be glossed over.

For example, if they damage the flooring in the process of moving out, they may argue the scratched marble was “already in that condition” when you signed the OTP.

As such, it’s best to take pictures of the property, before you sign any documents involving purchase. Take photographs of the kitchen, toilet, ceilings, etc. This is to prevent sellers from claiming that the damages were “there all along”.

If the seller agrees to certain fixes as part of the sale (e.g. they agree to fix a broken water heater if you buy), then this must always be communicated in writing; get them to email the statement to you. Otherwise, they might argue later that they made no such deal.

3. Concealing existing damages

Some sellers are quite skilled at covering up damages, and will have done so even from the initial viewing. This includes painting over cracks, taping together frayed wiring, or sometimes just pushing furniture up against problem areas (most viewers won’t tug at a big sofa to see what’s behind it).

This is especially problematic if the source of the damage is not within the unit itself. For example, you could be buying a unit where the neighbour’s leak is affecting your kitchen or ceiling; this is a major problem as it’s not in your control (it’s up to the other party to fix).

As I have a background in construction and interior design, I can usually help my clients to spot where temporary repairs have been made. Feel free to give me a shout-out if you need help!

4. Using nearby listing prices to compare

A common trick to justify the pricing is to show you the listing prices of nearby units / developments. However, this should not be taken as solid justification.

Remember the listing price doesn’t reflect the actual transaction price of those properties. Anyone can ask for $2 million for a property valued at $1.5 million; that doesn’t mean buyers are actually interested in paying it.

Sometimes a neighbour may just have unrealistic expectations and sets a high price; and the seller can try to take advantage of that.

This is not to say that knowing the surrounding listing prices is totally useless. It does have some use, in that you can see how the seller is pricing it relative to how others value their properties. But you must be conscious that the “surrounding prices” you’re seeing reflects the sentiments of those owners, which may be far off from the real prices.

(Incidentally, transaction prices tend to be lower than listing prices, since most prices are set with the expectation that buyers will bargain them down).

5. Not mentioning they’re in arrears

Some sellers don’t reveal that they owe a lot of back taxes to the government, or that they haven’t paid their condo maintenance fees in half a year. This is something that could cost you thousands in unexpected costs, if you “inherit” those arrears.

On top of that, the transaction could be complicated by the seller’s debts. The worst cases are when sellers have several months of unpaid home loans; the sale can be frustrated if the bank intervenes.

Nonetheless, some sellers who are desperate to offload the property – due to those financial issues – may decide to conceal them from you.

All of this will be a major waste of time for you, even if you manage to avoid being saddled with their arrears. It’s best to avoid dealing with these types of sellers if possible.

If something feels wrong about the property transaction, don’t force yourself to go ahead

Purchasing a property is a major commitment, and one that will carry on for the long term. If you just don’t feel right about the sale, it’s often better to move on; chances are that this particular property isn’t your only option.

There are thousands of properties available for you at any time; and whichever location you’re looking at, I can help you find an alternative.

Or if you prefer, drop me a message and I can take an informed look at the property you’re considering.

Do also follow me on RonChong.net for more news on Singapore’s unfolding real estate scene.

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