Tips on buying a flat

1. Get armed -- read up on the facts. Go online to HDB website & study the market statistics and find out the median resale prices and cash-over-value for flats in your targeted area. Visit the location at different times of the day to get a feel of what it's like to live there.

2. Set the rules of the game -- decide if you want to hire a housing agent to help you. If you're doing it yourself, check out the HDB website to find out the procedures involved or attend its monthly resale seminar. Most agents representing sellers charge buyers the 1% fee if they're not represented by another broker. Some agents turn down requests from independent buyers to view the flats. Whatever you decide, it's best to make it clear upfront by stating clearly when first contact with the brokers marketing the flats.

3. Act the Sherlock -- living in high-rise, densely packed public apartments has its own quirks. You never know, for example, if an owner is selling the flat because he has been harassed for repayment by loansharks at his home. If you buy this flat, you may end up being harassed yourself even if you had nothing to do with the debt. Take a walk down the staircase closest to that flat and pay attention to the flat door. If graffiti is found or the door is damaged, it could indicate that the flat is being targeted.

Another problem, more common in older resale flats, is leaky ceilings. This happens when shoddy renovation upstairs or age creates kinks in the water-proofing layer in your ceiling. To spare yourself the hassle of living with this or trying to fix the leak, look out for watermarks on the ceiling when viewing flats.

4. Be shameless -- don't give up if one agent turns down the price you offer for a flat. You may get lucky with another agent marketing the same flat. Some flat owners do not give exclusive marketing rights to one agent, prefer to pay a commission to whoever gets them a deal. Agents are unlikely to disclose that they are marketing a flat which they have no exclusive rights over. If agent A thinks that your offer is too low, agent B might find it a worthy offer to discuss with the owner.

5. Keep your cool -- it is common for agents to arrange viewings for an many as 10 interested parties within a half-hour slot, to heighten the sense of competition among buyers. Some agents will tell you they already have offers for the flat - when they don't - just to get you interested. If an agent tells you that someone has already offered $480K for a flat, make him an offer of, say, $460K on the spot. If he tries to negotiate with you, that $480K offer is most likely a fake.

6. Watch out for upgrades -- if a flat you are interested in is being upgraded, find out who is paying for the work. HDB fills owners for upgrading after the work is done, and the owner at the point of billing is responsible for payment. Ask for a receipt to show that he has paid the upgrading bill or check with the relevant HDB office if the seller wants to factor the upgrading cost in the price.

7. Take your time -- buyers & sellers of HDB flats must use the standard HDB Option to Purchase form. Under this arrangement, the buyer gets 14 days to consider his purchase after paying a non-refundable option fee. Don't rush to sign the option on the spot.

8. Don't' even think about it! -- don't go under the table practice, either cashback (artificially inflate the purchase price to get a bigger housing loan) or cash-down (underdeclare the full purchase price). Avoid getting entangled in such illegal arrangement; you may be fined up to %5,000 and jailed up to 6 months for giving such false information.

9. Be a busybody -- don't' be afraid to ask all the questions you have.

The Parc condo

The Parc condo in West Coast Walk got exceptional good response and was snapped up in less than a fortnight early this month. The 659-unit FH project consists of seven 24-storey buildings and were sold at $880 psf on average, rising from about $820 initially. There are a lot of complaints and public anger for its selling out without proper public launch (heard that 70% are sold to its employees & business associates -- not sure how true it is though). I hate to admit that CES and its marketing agent (Savills) have done a great job in selling such a project at record-high price in the area, though I think they're unethical in their encouraging flippers that the developer offered the most favorable deferred payment scheme to-date (only 10% net before TOP) and agents informally guarantee for ready buyers to take over their loads.

Well, with the current uncertainty of the US subprime impacting financial markets, these flippers take very high risks this time and are real fools in my opinion. The Parc is sandwiched between express way and HDB buildings around it. Though a little closer to town area and facilities (by at most 1km), it is priced $100 to $200 psf higher than the nearly condos which are quieter and of significantly lower density. Let's see, I bet the flippers will get burnt soon.