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Price has been agreed upon between seller and buyer.

Buyer and seller then register Intent to Buy / Sell.

During the 7 day cooling period, Seller wants to increase the price because he received another higher offer. Buyer does not want to outbid the higher offer.

Can buyer back out since cooling period is not over, and OTP has not been issued / granted?

Another question. The $1000 Option fee is paid only when the OTP is granted / issued by seller, am I right to say that?
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5 Answers

YT Tan (陈永达)
Replied
Good morning Sir/ Mdm,

Yes you are right that option fee $1000 should only be paid when sellers are ready to issue option to purchase.

As OTP is not being issued, you can choose not to proceed with your verbal offer and since seller prefer another higher offer as well.

Even you decide to outbid the offer and get the OTP eventually, you can choose to forfeit option fee and let the OTP expires.

Hope my sharing helps in aiding in your enquiry. May I know how can I value add further in your property needs?

Best regards,

YT Tan
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Gavin Ng
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Hi

Buying a HDB resale may seen to be simple. However, such incidence is unlikely to happen if you have a representing agent.

You may text 9620 0827  for a casual chat if you decide to have a representing agent.

Warmest regards

Gavin Read More
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Geryl Lim
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It will only be legal binding when Option To Purchase has been granted, with option money (between $1-$1,000) received, and seller will be legally bound to sell the unit to that buyer. Option To Purchase can only be granted 7 days after registering the Intent To Sell. For any agreement pertaining to the sale of HDB prior to this are under-table arrangement and is usually not recognised, therefore any parties can back out of the pre-agreed price or conditions. It just does not look nice on the parties for backing off what they have agreed upon.

The Option money is paid in exchange of the OTP to be granted by the seller.

From the above, it is quite likely that there is no agent involved on your end or if you are the agent involved, you are not familiar with HDB resale procedures.

I have been in the real estate business since 2009, with more than 13 years of experience serving the Singapore real estate market.

I am very active in the residential segment of Singapore real estate market, having transacted hundreds of deals from HDBs to private condominiums and landed properties in Singapore, and have handled many unique cases in sales and purchases as well as rental deals.

Over the years, I have also established a network reaching out to more than 9,400 expatriates, bringing my market presence to both in and outside of Singapore. This has created an additional exposure when I manage my client's portfolios, on top of the conventional on and offline platforms, where other estate agents are relying on. This has allowed me to consistently convert leads into results.

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  • Geryl Lim
    Replied
    Regards to your question, if cheque issued is to the name of owner, it is ok. Agents are not allowed to handle cash money for transactions. there are many agents who are still working the wrong way, where 1 is representing the listing agent and another agent who advertises will claim to be representing the buyer and ask to collect comms from the buyer. Option fees collected in form of cheque before the intent to sell cooling period is up is ok as sometimes time is required to for seller to discuss with the seller, however, the buyer has all the right to back out of the offer given that the Option To Purchase still cannot be granted so no format deal is entered into.
  • Geryl Lim
    Replied
    Hi Lawrence, high probability that this is a technique the seller agent has engaged to try push up the price. If indeed you are not keen in going after this deal, you have every right to back out the deal since OTP cannot even be granted. There is no logical sense that why owner can accept higher offer when you have agreed on the price and collected the cheque but you cannot walk away with the cheque when OTP is not being issued. It is an obvious case of misrepresentation by the agent and you can actually let the agent know that you will escalate the case to CEA (which I hope you do for serious breach of ethical practise) if you do not get your cheque back. Anyway, while the sum of professional fees to engage an agent for the purchase may not be cheap, I still feel that it could be to your benefit to prevent such incidents from happening and your purchasing interest can be covered.
  • DS
    Replied
    Thank you for your answer.

    No. I am not an agent. First time buyer. So, yes I am extremely inexperienced.

    This is the situation.

    I was asked by the agent to pay $1000 option fee by cheque (Cheque was passed to agent) after seller verbally accepted my offer (according to agent) but seller has not yet registered intent to sell. And during cooling period, seller received a higher offer (again according to agent).

    Agent offered to negotiate with seller to accept the pre agreed offer from me instead of accepting the higher offer after I refused to up my offer.

    I smelt something fishy and want to back out, but agent said if this is the case, my option fee of 1k is gone. However OTP has not been granted. Cooling period is not over.

    Some background context. I found a property from propertyguru. Seller agent met me WITH his colleague, and said one of them will be seller agent, and the colleague would be my buyer agent so there is no conflict of interest.

    So my followup questions are:
    1. According to CEA, agents are NOT allowed to handle transaction monies related to buying and selling of property.

    Does this include the Option Fee? Does that mean agent should not take cheque from buyer?

    2) 2 agents working together, one offered to be the buyer agent, and another the seller agent.

    Is this legal?

    3. Option fee of 1k collected by agent before intent to sell has been registered and before HDB prescribed Option to Purchase agreement has been granted and signed by both buyer and seller.

    Is this legal?
Aaron Chong
Replied
Hi,

I would be most glad to assist you further and please feel free to let me know if you need any assistance. Have a good day ahead. By the way, yes as a buyer, as long as you have not paid the option fee or receive the signed OTP, you could back out/ withdraw anytime.

Regards
Aaron Chong
 9730 8455 
aaronchong2774@yahoo.com.sg Read More
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Ling CK
Replied
Hi,

1) The seller agent should have assisted the seller to register the intent to sell before marketing the unit to avoid such a situation.
2) The sellers have all the right not to keep their promise before issuing the OTP.
3) The verbal agreement between the sellers and buyers did not form a contract without the element of consideration.
4) OTP should not be post-dated as this is not legal to do so.
5) If the buyer had issued a cheque or made a bank transfer as the option fee before the OTP is issued then although it is only a verbal agreement between the sellers and buyers, it formed a contract between the sellers and the buyers.
6) Even though this was agreed upon before the completion of the cooling period and OTP was not issued. You may still challenge the sellers in court.
7) So eventually you may win the case many months or years later but your plan of buying a home now will be jeopardized.
8) If the sellers do not want to keep their promise and wanted to increase their selling price. I would recommend you walk away from the purchase and demand to refund of any option fees paid.

Please give me a thumbs-up if the answer provided is relevant to your main concern. Thanks!!!

Hope the above answer your main concerns, but if there are more query, please feel free to contact me at 90110636  , or email: ling.ck7@gmail.com if more information is needed.
I'll be glad to assist.

Best regards
Ling CK
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https://R056727F.propnex.net/
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