No Success for Auctions, Distressed Property Sold Via Private Treaty

Auctioneer Joy Tan hasn’t stopped even after auctions didn’t gained success. Ms Tan, Edmund Tie’s head of auction and sales, managed to sell 7 distressed properties via private treaty during the two months of circuit breaker. The properties’ worth was S$10.6 million in total.

Ms Tan is further planning to arrange a webinar in order to show more such properties to interested prospects as arranging auctions is still not allowed after the ease in circuit breaker announced by the government.

There were a few mortgagee listings in the second quarter of 2020 as banks put the re-possession activities paused as courts weren’t open during the circuit breaker.

Homeowners were granted huge relief by the government in the form of mortgage deferment till the end of the year.
However, the second quarter of 2020 saw sales via private treaty from auction listings in Q1 2020 and earlier.

While mortgagee and bank sales are the most common form of property listings in auctions, there are owner listings too. However owner listings aren’t a good deal by the time they reach the auctions.

As per Ms Tan, there have been instances where owners themselves have exhausted the traditional means of selling and then move to people like her for assistance.

Auctions reach to a bigger market through new and unique strategies, she added.

To add to that, sellers who are committed to a second property and who don’t want to pay additional charges for stamp duty can list their properties on sale via private treaty.

In a private treaty, the buyer and seller agree on the pricing and negotiation is made on the contract terms while the deal is finalized by paying one percent option money.

There was a 32% discount in prices of the 7 properties sold in Q2 2020 via private treaty when compared to the price guide.

A factory at Tuas Avenue 4 with a 28-year lease period was sold on 32% discount for S$3.7 million instead of its S$5 million guide price.

A 2-bedroom residence at Marina bay was sold for S$1.95 million while the guide price was S$2.05 million.
The buyers aren’t keen on purchasing properties with higher price tags due to Covid-19 and that led the sellers to accept lower offers, said Ms Tan.

Almost all the buyers are locals and they were waiting for the right time to enter the market and sealed that opportunity during the circuit breaker period added, Ms Tan.

However, the foreign interest in Singapore’s real estate market is getting back on track as Ms Tan has received enquiries from Hong Kong and China for the upcoming webinars.

There are at least 50 registrations for the Webinar till now and ample amount of foreign buyers have registered.

The webinar will showcase 10 to 15 properties including banks’ and owners’ sales both. Properties include two penthouses in the Helios residences and a bungalow on Sentosa’s Coral Island.

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