Flat Post 2 - Cash You Need To Start With

Here's what you need to figure out financially when you're buying a HDB resale flat as a single buyer.

Cost of flat: $X (usually in the few hundreds of thousands). Let's use $470,000.
Cash over valuation: $Y (in the tens of thousands). Let's use $30,000.

So one can't really haggle over the valuation price. Apparently isn't been calculated by certified professionals who have no additional incentive to determine how prices fluctuate. Hard to believe but hey, I am a buyer, so I complain.

If you're keen, put down the option fee. That's $1,000. This amount goes along with signing the Option To Purchase form whereby a deposit of maximum of $5,000 inclusive of the option fee has to be paid in cash. Ultimately, the deposit goes to part of paying $X.

Do keep in mind that if you engage a property agent to handle matters, that's 1% of the valuation price that has to be paid for services rendered. Agent fees, sigh. (One can go at it alone, like I did, save the few thousand for the kick ass TV or kitchen makeover)

Now, you'll need to engage a lawyer to settle the legal backend work that has to happen when one buys a property. The lawyer, well the legal assistant more likely, will also arrange matters between the seller's lawyers, the bank (if any) and the CPF folks. Legal fees can come out of one's CPF so no upfront cash required there.

The next cash whammie that'll hit a resale buyer is the stamp duty. No one really understands what this is for but the tax guys love racking it in. At this point, I googled and found this:

"Stamp duty is a tax on executed documents relating to properties or interest in properties and shares or interest in shares. Stamp duty is payable only on documents described in the First Schedule to the Stamp Duties Act (Cap 312). These documents include a lease, sale and purchase, gift or mortgage of property. It is not a tax on transactions. If the agreement is verbal and no document is executed (signed) for that agreement, then no stamp duty is payable. Liability arises once the document is executed. Hence, even if the transaction has been aborted, stamp duty is still payable on the document." Taken from IRAS website.

For property purchases, the rate is based on steps of $180,000 - 1% on the first 180k, 2% on the next, and 3% on the balance thereafter. So if your property's sale price (that's $X + $Y folks) is let's say $500,000, the stamp duty is $5400 (for the first $360k) + $(500,000 - $360,000) x 3% = $9,600.

Technically, this amount can come out of your CPF but apparently you can't make that transaction till the CPF management approves things, and that can't happen till your lawyer puts in the paperwork for the stamp duty. A bit of a chicken-and-egg situation there. So one pays cash first, then it's reimbursed after the amount is deducted from the CPF.

Somewhere along the way, there's a HDB application processing fee that's based ridiculously on the size of the flat purchased rather than the admin work being done. I paid $60.

If a bank loan is the desired means of mortgage payments, there's probably a processing fee for that too. I can't remember what I dished out but I think it's 0.1% of the loan amount.

Alrighty, here's the mandatory cash component deal when it comes to actually paying for the flat. The almighty HDB dictates the 80-20 rule: 20% of $X upfront and 80% can come from a loan. Out of the 20% - 5% must be in cold hard cash. 15% can come from one's CPF. So with a flat that costs $470K, the cash portion is $23,500. This amount includes the deposit amount, so that's a balance of $18,500.

To sum up, the cash you need ready upfront before you can even think of getting a resale flat bought at $500,000 is :
- agent fees $5,000
- option to purchase fee and deposit $5,000
- stamp duty $9,600
- 5% of valuation price less deposit $18,500
- cash over valuation, let's say $30,000 - that's what's averaging now for 4rm and larger flats
- processing fees - variable, around $500 perhaps
--> TOTAL - $68,600

Yikes eh. Especially if you're going at it alone. And that doesn't include the cost of renovation, furniture and appliances.

Given that the COV is close to 50% in the example, I am sure many will understand my wrath at property agents for asking for the sky, sellers thinking their crap flats deserve monetary exaltation and the gahmen for letting this madness go on.

Go get hitched, at least the burden is shared. And you might qualify for housing grants to offset costs too. United in debt, ever after.

RIP Steve Jobs

I first got the news of Steve Job's passing in the lift on the way up to the office. It was about 845am. From conventional media - television. There is a 10inch screen embedded above the button panel at a rather uncomfortable height and on it plays Channel News Asia all day. The red text on the fixed white bar on the bottom of the screen announced the inevitable. He was 56, younger than my mum which freaked me out a little. But many of us knew that it had to happen sooner or later, Steve was looking awfully gaunt lately. Pancreatic cancer, goodness. It was a tough battle, and Steve won and lost.

Visionary is often used to describe this man. Perhaps he was just showing us what it meant to live by one's own prinicples. Undoubtedly his standards were high, and all of Apple's successes post kaledoscopic iMacs were jaw-droppingly game-changing. Ideas that worked, devices that looked beautiful and worked even more beautifully. Iconic stuff. Exacting standards, some painful, were set in place if one was to achieve glory under his watchful eye, I guess. He created the tech divide, the PC vs Mac eternal battle. And he had his army, legions faithful to this every word, loyal to the brand. If Mac is a religion, then Steve was Jesus. Or Buddha in black turtleneck and jeans.

We're all grateful in some form or other. I am typing this post on a Macbook. I own a iPod and had an iPhone. I don't think I have as many other electronic products from the same brand. Steve Jobs did more for the design and UX frame of thinking than perhaps anyone else.

Well, life goes on. We celebrate the man and his ideas and impact, and always will. Cheers.

Flat Post 1 - Intro

So I finally bought a flat.

It was a long road of searching and eventually committed to a 5 room flat in Sengkang. It's not perfect, no flat really is. This one checked a lot of boxes on my list - 3 bedrooms, 6 minutes' walk to the MRT, 5 bus stops from my nephew (My mum has to be daytime nanny, so close proximity was a consideration). All said and done it's sort of a rite of passage. Growing and getting into debt, like any other working class taxpayer. Admittedly, it still feels like a house, not yet a home. Too soon I guess, just a month since I moved in. To the day in fact.

There were quite a few ups and downs, well, one remembers the downs more, naturally. I'll give the lo-down on the how to get by without an agent and how to handle the damn finances in the next post. Now I'm coming to end of another Law & Order episode and then I intend to call it a night.

Big Bang Theory

So, many people were left quite stunned after a Norwegian 32-yr old left his guns rip at the youth camp outside Oslo. This blond and blue-eyed intellectual, now monster, decided to unleash his angst on innocents in an attempt to teach Europeans about the threat of Marxism and Islam on their homeland. He planned his attack, carefully and methodically. This is the type of guy who's the unsub on Criminal Minds. Creepy shit come true.

People angry with their own people. Not uncommon, with most differences are religious - Shia and Shiites have been at for centuries, British Protestants and Catholics at each other since the time of KIng Henry's VIII. Political and ideological differences are clearly cause for trouble too. Even Greenpeace has got itself into a fair share of scuffles to get their point of view across. We are not meant to get along it seems.

What stood out from this Norway incident is that no one really expected a local to run amok and armed with the intent to kill in a country that's generally very peaceful. That's the danger - not expecting things to go wrong. We had one example in the US with the Oklahoma bombings. Timothy McVeigh was one unhappy guy, upset with his government, their actions and hypocrisy. He apparently regretted not levelling the whole Federal Building (but also would have considered changing the target if he knew there was a day care center there.) Although many people knew about McVeigh's contentious views, they didn't think he would go so far. All those incidents of gun rage in US schools too stem from the same source - disgruntlement then violent action.

Going to far - why not? In this age of bigger and better, a terrorist act is only as big as it's effects. I blame the modern media and the way we consume it. We long for the special, theatrical, mega-super-uber, even explosive. We pay attention to Lady Gaga because she's made it a point to look different each time she's on camera. There are enough talent shows out there to turn any teen into a wannabe-anything. Even the losers and talentless like William Hung and Rebecca Black make people take notice, intentionally or otherwise, because they suck. Funny isn't it. So with money to purchase materials, scientific knowledge available on the Internet to put together an explosive device and enough balls to try something new, almost anyone in modern world can let go his own big bang. Anders Behring Breivik had an agenda to boot. His tweet "One person with a belief is equal to the force of 100,000 who have only interests" speak volumes about his thoughts and actions.

So what can we do about this? It could simply be asking someone if everything is ok. Talking about stuff helps. That's why the SG gahmen wants to be seen as consultative (to varying degrees of success and response) and inclusive. If everyone is treated fairly, or at least given a voice, then we'll likely not need to deal with such dramatic endings. Parents need to keep talking to their kids, friends need to be asking friends stuff, teachers need to be looking out for their students. We all need to appreciate universal good and bad, that some actions are just wrong morally. Opposing views and dissent have their avenues. We all need to keep a level head and eyes open. Please, for all our sakes.