"I am a BLOGGER NOT an expert. This is a BLOG not a 'go-to' website for official information. I represent no one's view save my own. I have neither legal nor financial training, nor do I have anything to do with the real estate industry. My understanding of the Collective Sale Process is from a layman's position only. My calculations, computations and tables are homespun and may contain errors. Please note that nothing in this blog constitutes any legal or financial advice to anyone reading it. You should refer to your lawyer, CSC or financial adviser for expert advice before making any decision. This disclaimer is applicable to every post and comment on the blog. Read at your own risk."
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There is one thing worse than an Enbloc ----- and that is an Enbloc done badly. Since the majority have the necessary mandate to sell, then they owe it to all SPs to make a success of it. Minority SPs can only watch and wait, if they sell then lets pray it's at a price we can move on with, if they don't sell, then we are happy to stay for a few more years.

Why an Independent Valuation is necessary.....

Anonymous said:
"Those who suggest independent valuation before setting the RP are naive. You get 10 different valuers, you will get 10 very different valuations. I can tell you now that you will get 10 different figures ranging from $1.2m to $2m for each unit. Those who have work with valuers will know. Valuation is not science but very much an art. Do not waste our money(probably cost from $20k to $100k, again different valuers charge differently) going for valuations!!!"

Those who suggest independent valuation before setting the RP are naive.
No, those who suggest an independent valuation do so from first hand experience of a failed en bloc, having been to court, having sat and listened to how a valuation can be scrutinized and dissected into it's smaller parts. Having watched a valuer from a 'top' company squirm in his seat trying to justify the unjustifiable.  

An independent valuation is the only way to counter an improper marketing agent proposal, it will definitely make him squirm first. An independent Valuer (at the beginning of the process) is paid for his services and has no vested interest in setting the price at other than the computed amount. A marketing agent has a vested interest in setting the price low enough for his commission. He will fight  to stop owners from getting a valuation done.

It is the owners who feel they can trust a marketing agent to set the reserve price are the ones being  naive - doubly naive for being fooled twice with the same trick.

Valuation is not science but very much an art.
Yet, it is still imperative that one be done because no one  buys, sells or builds anything without doing a valuation first. Has a developer ever said  "let's dispense with this arty valuation and bid any price we feel like? " or" Let's just build without checking the valuation figures, it's not science'.  Will a marketing agent dare approach a developer with a piece of land without having worked out  the figures to show in advance (not the ones shown to us 'naive' owners) ...Noooo!  Developers and Agents apply this 'art' very well (and they have the means and personnel to do it in-house ) and it is an indispensable part of the construction and real estate industries. We, in Tampines Court, require this art, too. We need to know what our land is worth to these other 'artists'. We are not content with just the marketing agent's own  'artistic' valuation.

The Residual Land Value method is the trusted method used by the developers themselves to work out costs.  
It is based on IMMUTABLE FIGURES such as site area, plot ratio, development baseline.
It is based on KNOWABLE  figures for Tax, Stamp Duty, Government levies and other Financial costs. Without the RLV no developer could ever tender for land or put one stone on top of another. Agents want this RLV to be hidden from owners. They want you to look at their computations only. 
  • No formal valuation means owners have nothing with which to challenge Agent figures 
  • No formal valuation means no basis on which to  compare  the Valuation done at tender closing.
They want you to wait 2 years to do the compulsory Valuation by which time no valuer can be truly independent knowing that a big developer is waiting for his prize and a valuer cannot afford to offend the big boys and jeopardize his business in the long run. (It took MONTHS for the minority in round 1 to find a single valuer brave enough to go up against the majority valuer at the STB.  At one point, it looked like an overseas valuer was the only option left).

Do not waste money!
$67 / unit ($30k / 80% )

But more than that, more than the few miserable dollars it would cost collectively....
Owners who set about selling off their neighbours' homes against their wishes have a MORAL DUTY and a DUTY OF CONSCIENTIOUSNESS  to see it done properly. The above Anonymous cavalier attitude and parsimonious approach is a affront to all the  decent, hardworking and honest people in this estate.

And why it is  too late to do one now....

With regard to Comment no. 1;  he makes a very good point. I've had to pull myself up and weigh between my  desire to see things done straight down the line and acknowledge my gut feeling that it will do more harm than good as  it will clearly come too late in the process.

An independent valuation should be the first order of the day in any collective sale. It is not a question of price, an ethical owner would not begrudge the minor cost if he had the best interests of the estate at heart.   It should be done before a the marketing agent is chosen and before anyone can muddy the water with their prejudice.  How to collect the money, how much and from whom should have been the first priority of the sale committee, but it was not.  TC has missed the boat on that one again. Who knows what went on at the committee meetings; I am sure some SC members must have thought it necessary to do a valuation, but the fact that it has not been even attempted up to now means they are possibly being out-gunned on the votes. I do not know, I am just hypothesizing. 

Because Round 2 has been an agent-driven en bloc right out of the starting block, getting a valuation done was never going to happen. Yes, it appeared as a possible resolution on 3 of the requisition forms - you can promise the moon when getting people to requisition -  but it did not make it to the agenda of the 2 EGMs held up to now.  Even if it were included in the next EGM and passed by the floor, it can never be trusted to be truly independent as we now have a marketing agent on board and a RP on the table. It might be as worthless as the rubber-stamping valuation at the close of tender. Who will it serve best;  the owners or the marketing agent?  The marketing agent.

Both the sale committee and the  owners  have lost the high ground,  indeed we lost it at the first EGM when TC owners sent the SC on it's merry way without direction. We have let agents run the show and so have little choice left except to let them pick up their under-valued ball and run with it.

As, comment no. 3 correctly says: discerning owners will not sign for this under-valued ball.


  1. Anonymous26 July, 2011

    I take exceptions to your response esp. your last paragraph.

    Precisely as what you have described. Developers or any buyers worth their salt do not need valuation if they do not use bank loan. They can do their own calculations. You just described in detail of the Residual land value method. You dont need a rocket scientist to do this simple calculation. Any o level maths student can do the job.The sellers, agents,and developers are also using similar calculation without paying hefty sums to valuers(as you have aptly described 'rubber stamping') even for other occasions beside the tender close. Even in HDB transactions, valuations are for 'show'. It is used by CPF and banks. Those who paid entirely in cash need NOT use valuation report.

    Supposing we have a valuation done at fee of $100k and assuming it says $1.2m per unit or $672m quantum, would you still go ahead? Before you can even go ahead, you would probably get a knock on your head by SPs for wasting $100k. Come come, this is not rd 1 but rd 2 and we are much wiser. We know the value of TC land. Do not waste good money on things that we already know the value. Like you say, NOTHING less than $1.7m, whatever the valuation may state, independent or otherwise.

  2. As an individual, you may choose to take that risk, you may feel you are educated enough to bypass the middle man, make your calculation and go with it - but only for your own property. With 560 units in the estate, there has to be some accountability, some basis other than a few armchair calculations by well meaning owners. Not everyone has the same risk appetite.

    It is my gut feeling that doing a valuation now is in fact already too late. The ground has been poisoned and no one knows the hidden connections between agents and even so called independent valuers. But due diligence still has to be done.

  3. Anonymous26 July, 2011

    You may well say like some of us NOTHING less than $1.7m. Not everyone agrees with you.
    There are 3 groups.
    First, the en-bloc raiders and those that just needs to sell for whatever the reason, anything above $1.4m will do.

    Second group are those that want NOTHING less than $1.7m.
    Both the above groups don't need valuation.

    Then there's the swing voters. These are the ones that will make the difference. This is where the valuation is needed to convince them the RP to sell. They are currently being shown a one sided view by the selected MA. Just like the GE, we need an alternative view...
    An independent valuation will provide that alternative view, hopefully satisfy all 3 groups.

  4. Anonymous31 July, 2011

    An 'independent' valuation is NOT going to happen esp. at this stage. There are only a handful of valuers experienced in doing valuations for a behemoth like Tampines Ct. The number of potential buyers are also equally a handful. The unseen hand manipulating this enbloc has already succeeded thus far, putting a 'independent' valuation by them is another nail into the coffin. A neutral unblemished person must assist in getting a valuer provided the fee is paid by the marketing agent into his/her hands to liaise with the valuation co. No less than $1.7m or no fee......, Whichever valuation company willing to quote the highest RP (above $1.7m of course) will get the job.We can invite non-SC volunteers to work together. The SPs do not have to pay and we get the figures we demanded in the valuation report.

  5. Singapore property prices may continue climbing: survey
    By Millet Enriquez | Posted: 01 August 2011 1950 hrs
    He said: "(What it says is that) they expect the transactions and prices to carry on going up and so the expectation is that they are going to have to pay a higher price in the future. And as a result of that, they want the government to do more."

    Analysts said prices for government-subsidised housing, or HDB flats, could jump 12 per cent this year, while private homes might climb as much as 10 per cent.

    - Hence setting the RP, must take into consideration the potential increases. The developers can and will cope with this. But if TC owners don't then simply downgrade; that is, pay more for a smaller than your TC home.