Urgent Advice needed

[beembeem]

Dear all,

I hope to seek advice urgently, concerning a yet to TOP unit I booked last weekend, due to some scheming sales tactics and my moment of folly. I've signed the Option to purchase on Sat, and surrender my cheque when the sales ppl followed me back to my hse to collect. I informed them on Tues that I'm cancelling the booking, and I'm told now that there's a penalty of 25% of the booking fee.

I'd mistakenly understood that I'd time to ponder over when both parties agreed upon that cheque will pnly be banked in on Wed. Of coz i failed to obtain in writing any agreement over this.

Is it the industry practice that even before cheque is banked in or once Option is signed there;s no turning back, and with a penalty.

Hope to get advice from the gurus here. Milllion thanks!

Beem

 

[Doodles]

Re: Urgent Advice needed

once you have signed option its a done deal.

 

[ACSCAB2]

Re: Urgent Advice needed

Dear all,

I hope to seek advice urgently, concerning a yet to TOP unit I booked last weekend, due to some scheming sales tactics and my moment of folly. I've signed the Option to purchase on Sat, and surrender my cheque when the sales ppl followed me back to my hse to collect. I informed them on Tues that I'm cancelling the booking, and I'm told now that there's a penalty of 25% of the booking fee.

I'd mistakenly understood that I'd time to ponder over when both parties agreed upon that cheque will pnly be banked in on Wed. Of coz i failed to obtain in writing any agreement over this.

Is it the industry practice that even before cheque is banked in or once Option is signed there;s no turning back, and with a penalty.

Hope to get advice from the gurus here. Milllion thanks!

Beem

I am not a lawyer.....juz a liar. bt wil try to help, u seem desparate.

I think the only way out for u is to sell this option; tis is on condition dat u hav a "and/or nominee" clause in yr OTP. if u dont, maybe u wanna tok to the developer to allow u to sell. Most allow, as there is no diff to them....n usually u hav the entire option period to try sell yr option.

The 25% forfeit is the norm for new projects. for resale units, if u fail an option, u lose the entire option money.

If u try to block the cheque, the developer can sue u for damages, failure of contract. lose lose situation.

Lesson here: muz b sure b4 u enter into a contact......esp OTP.

good luck.

 

[Mark_Twain]

Re: Urgent Advice needed

Signing the option is a legal contract and to be fair, it secures interest of both sides.

Assuming you are the seller, and you have 10 potential buyers on a weekend looking at your apartment. One of them very keen and offered you $10K above valuation and you decided to accept his offer and took his cheque. You lose out the opportunities straightaway from the other 9 potential buyers who may offer you even more.

2 days later, MAS change policies to loan quantum restriction, and implement additional stamp duty for purchases. The property prices started to fall. The buyer call you to request for the cancellation of the purchase as the price is now falling. Will you entertain this without charging him anything? You won't be able to get another buyer to buy at this price.

Same applies to property developers. If the market changes to their favour, i.e. the price starts to increase, they cannot cancel your purchase and ask you to pay more if you have put in your option money.

This option signing is in practice for many years and you cannot win the case.

Suggest that you look for another buyer to replace this, or sell it away after 1 year when the additional stamp duty clause is over.

Cheers,
Mark

 

[beembeem]

Re: Urgent Advice needed

Thanks for all yr replies. Yes, I'm in a desperate situation. When they suggested asking their GM for permission to 'book' the unit for the 'last' slot of rebate little do I know it's OTP. Honestly it's the 1st time i've ever buy n least do I know 'book' it means signed on OTP. When I asked them to bank in cheque
3 working days later, which they agreed, I naively thought I'd time to ponder. Seems like in SG laws there's no such thing as 'cooling period' in property, contrary yo most other transactions. And very soon after the Sales agreement were
delivered to me, 2 days later. How long a period do I ve to exercise or sell this option can I ve?

Appreciate all yr advice. Thanks!

 

[Alianta]

Re: Urgent Advice needed

From my minimal knowledge in my past property investments, typically the agents who represent the developer in a project sale, will require buyer to sign a LOI - Letter of Intent - that signifies buyer committment and intention to buy a unit, and they will also ask for a cheque deposit as a show of faith or actually construed as payment deposit, for that matter. Then few days later, there will be a OTP agreement to be signed which is the Option to Purchase agreement which is the actual agreement that must be signed by both seller and buyer to be considered as contractually legally binding. So, in fact, just handling over a cheque deposit without signing any OTP or LOI for that matter would not constitute as contract binding, although I would think that further indepth discussion with your appointed lawyers about the penalties and LOI/OTP agreement terms would determine if you may have a case to get out of the contract - not too sure about LOI but if the OTP is signed, then its a done deal and no turning back. The OTP turnaround is rather fast if we are talking about developer project sales, not same as buying into an existing condo project from an individual seller, which typically carries a 2 week duration period for the seller to 'consider' the buyer's offer to purchase for seller's unit, meaning if the seller has 2 weeks to consider to sign or not to sign the buyer's OTP.

 

[beembeem]

Re: Urgent Advice needed

Thanks Alianta for yr reply, when they offered to let me 'book' the unit, little did I know it's the OTP and it's binding clauses and obligations. Only after going back to read in details did I realise if I don't continue with the purchase, a certain proportion would be forfeited. But I called them a day before the cheque to be banked in of my intention. I'd thought that was the period whereby a buyer can turn back on his decision or in some cases termed cooling period. Shockingly I realized there's no such allowance in such high value deals.

Now only options are to pay them that amount or refuse to pay and settle in court?

 

[basker]

Re: Urgent Advice needed

Thanks Alianta for yr reply, when they offered to let me 'book' the unit, little did I know it's the OTP and it's binding clauses and obligations. Only after going back to read in details did I realise if I don't continue with the purchase, a certain proportion would be forfeited. But I called them a day before the cheque to be banked in of my intention. I'd thought that was the period whereby a buyer can turn back on his decision or in some cases termed cooling period. Shockingly I realized there's no such allowance in such high value deals.

Now only options are to pay them that amount or refuse to pay and settle in court?

Did u call the developer ? Who went through the option with u ? All clauses in the Option & side letters need to be explained when developer issue option so if this is not done properly, u can voice them out. U shld have ask for the cheque at the showflat the next day or soon as u found out what u r getting into. Calling them no point. U shld approach developer staff NOT the marketing agents u should be able to get back the cheque if they have not bank in (usually 2 days) of course if ur case is genuine i.e. no proper procedures done when they issue u the option. u won't be able to sell yr option cos developer's option - not allow to contain '& or nominee',

 

[pengful]

Re: Urgent Advice needed

beembeem, I read your story and sympathise with your situation. Only question I have is how can you part with your money so easily. You are talking about a big ticket item like property. Buying property is not buying insurance. There is no free look period, if this is what you are thinking about.

Either you forfeit 25% or carry on with the purchase, get a bank loan and do a sub-sale.

 

[Alianta]

Re: Urgent Advice needed

Concur with bro pengful, if you do not wish to lose the 25% penalty, then make lemonade out of lemons - engage another agent or do it yourself - put up that unit for sub-sale asap (even before you get bank loan approval) but make sure you have your calculations done before you close at the right price ie. make sure you are aware of your profit/losses and don't forget to cover the % commissions for the agent. Put ads in social media to save costs or put out a small ad in Classifieds in Saturday Straits Times. Focus on breaking even at least, cos' the current forecast on residential property pricing is that its stabilizing and probably trending horizontally, barring any further economic crisis ahead... most property investors are waiting for more bad news to come so when the prices start to dive, then we'll buy in....

 

[beembeem]

Re: Urgent Advice needed

Did u call the developer ? Who went through the option with u ? All clauses in the Option & side letters need to be explained when developer issue option so if this is not done properly, u can voice them out. U shld have ask for the cheque at the showflat the next day or soon as u found out what u r getting into. Calling them no point. U shld approach developer staff NOT the marketing agents u should be able to get back the cheque if they have not bank in (usually 2 days) of course if ur case is genuine i.e. no proper procedures done when they issue u the option. u won't be able to sell yr option cos developer's option - not allow to contain '& or nominee',

Yes, I'll called up the sales agent on Tue (I signed on Sat), 1
day before the day cheque was supposed to be banked in. We'd has assumed that before it's banked in I could revert my decision. From reading the options, we did nt see any penalty before the actual bank-in if cheque only forfeit of 25% after it's being paid. Guess this is a lesson to me not to assume even though it's not in black n white.

 

[beembeem]

Re: Urgent Advice needed

beembeem, I read your story and sympathise with your situation. Only question I have is how can you part with your money so easily. You are talking about a big ticket item like property. Buying property is not buying insurance. There is no free look period, if this is what you are thinking about.

Either you forfeit 25% or carry on with the purchase, get a bank loan and do a sub-sale.

Yes, I must admit my ears were jus too soft and got "bought into" by the painted prospects of the project. After going home and relook at my finances, I realised it's a tough one to finance it, only did i woke up to see what I'm into.

It's a lesson for me, and I'm hoping to get out of it with minimal loss, if possible. Just nvr in my life dream or thought that in such big ticket items like property, one doesn't have the luxury of a short period to reverse a decision. Carrying on with the purchase is not an option for me at the moment as honestly I'm unable to liquidate my assets at this point of time yet and incurr huge losses.

 

[beembeem]

Re: Urgent Advice needed

Concur with bro pengful, if you do not wish to lose the 25% penalty, then make lemonade out of lemons - engage another agent or do it yourself - put up that unit for sub-sale asap (even before you get bank loan approval) but make sure you have your calculations done before you close at the right price ie. make sure you are aware of your profit/losses and don't forget to cover the % commissions for the agent. Put ads in social media to save costs or put out a small ad in Classifieds in Saturday Straits Times. Focus on breaking even at least, cos' the current forecast on residential property pricing is that its stabilizing and probably trending horizontally, barring any further economic crisis ahead... most property investors are waiting for more bad news to come so when the prices start to dive, then we'll buy in....

I do agree it seem to be the best option, but sadly I'm unable to finance the downpayment, contrary to what I had calculated earlier, so it's not feasible for me, unless I take some personal loans and incur substantial interest.

Bad move on my part, I must really admit.

 

[basker]

Re: Urgent Advice needed

Make sure u do the sums right...cos if u exercise yr option then yr outlay for this property will be 20% and developer can sue u for specific performance. Sub sales may not be a good idea in the foreseeable future as i understand that buyers more willing to purchase direct from developer than from owner (they rather let developer make $ than 'property flippers') - of course if mkt turn bullish again than it will be a different story. Right now if u cut loss it's 25% of the 5% so it may be a better choice. However, all depends on yr financial status as in the long run property prices in Sg will still be trending up

 

[beembeem]

Re: Urgent Advice needed

Make sure u do the sums right...cos if u exercise yr option then yr outlay for this property will be 20% and developer can sue u for specific performance. Sub sales may not be a good idea in the foreseeable future as i understand that buyers more willing to purchase direct from developer than from owner (they rather let developer make $ than 'property flippers') - of course if mkt turn bullish again than it will be a different story. Right now if u cut loss it's 25% of the 5% so it may be a better choice. However, all depends on yr financial status as in the long run property prices in Sg will still be trending up

Yes, you are right in this sense. But being a greenhorn in this area and having 3 levels of sales staff, right up to the GM probably overwhelmed my sensible judgements. Yeah property prices are trending alright but how much further and when's the bubble gonna burst is everyone's guess. I'm caught in a dilema of liquidating assets, equities and an oversea property just to finance this mega investment.

 

[T6]

Re: Urgent Advice needed

Thanks for all yr replies. Yes, I'm in a desperate situation. When they suggested asking their GM for permission to 'book' the unit for the 'last' slot of rebate little do I know it's OTP. Honestly it's the 1st time i've ever buy n least do I know 'book' it means signed on OTP. When I asked them to bank in cheque
3 working days later, which they agreed, I naively thought I'd time to ponder. Seems like in SG laws there's no such thing as 'cooling period' in property, contrary yo most other transactions. And very soon after the Sales agreement were
delivered to me, 2 days later. How long a period do I ve to exercise or sell this option can I ve?

Appreciate all yr advice. Thanks!

U ask them to bank in cheque later they cld juz assume u are raising funds. Pls make an effort to scrutinize what you have signed and go seek professional advice. I think if we advise without seeing any black and white is definitely not in your interest.

I highly recommend you go see an experienced conveyancing lawyer instead of trying to find out an answer here that might be inconsistent with your contract.

 

[beembeem]

Re: Urgent Advice needed

U ask them to bank in cheque later they cld juz assume u are raising funds. Pls make an effort to scrutinize what you have signed and go seek professional advice. I think if we advise without seeing any black and white is definitely not in your interest.

I highly recommend you go see an experienced conveyancing lawyer instead of trying to find out an answer here that might be inconsistent with your contract.

Yes, I do understand that I cannot be holding anyone responsible for their words of advice or concern to me here. I'll be talking to a lawyer on Mon. Meanwhile, I'm hoping to gather some opinions and experiences from helpful souls here.

 

[basker]

Re: Urgent Advice needed

BB, the forfeiture of 25% of 5 % is stated in the option (i am pretty sure) and the one issuing u the option must highlight this (one of the more important clauses). If u go to a solicitor likely advise will be either u let option lapse or exercise. I think you should go to the developer office to try giving yr side of the story, did any banker work out the financial plan for you ? if not, how u know whether u can afford ? bringing back option without the sale agent helping u with the mortgage issue...this is not proper my friend.

 

[beembeem]

Re: Urgent Advice needed

BB, the forfeiture of 25% of 5 % is stated in the option (i am pretty sure) and the one issuing u the option must highlight this (one of the more important clauses). If u go to a solicitor likely advise will be either u let option lapse or exercise. I think you should go to the developer office to try giving yr side of the story, did any banker work out the financial plan for you ? if not, how u know whether u can afford ? bringing back option without the sale agent helping u with the mortgage issue...this is not proper my friend.

This is something new. There's no banker around when we signed OTP. In fact, we asked for a couple of hrs to discuss before we make a decision. The sales manager suggested if we are interested, he can try to call up his Boss to ask him if we could 'book' the unit first and enjoy the last of the limited cash rebate. Never did we realise it's OTP we are asked to sign and OTP constitue such a forfeit of 25%. Only upon the sales followed us home to collect our cheque and then my wife and myself looked through the OTP did we realised there's such a clause.

But again, it's not easy to prove what I'd said in court, and legally we are binded by this OTP, a cold hard fact.

 

[E92-Lighting]

Re: Urgent Advice needed

25% fee is a bit too much on a property sale, good luck with the outcome. it seems you can go with the deal or take a 25% loss. sorry to hear about your misfortune