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"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.

MA's Letter of Rebuttal of Vice-Chairman's SP Letter

The MAs Letter of Rebuttal to the Vice- Chairman's undated letter to all SPs 

An Anonymous  commentator has rebutted the rebuttal and laid out the points brilliantly and I hope he/she will not mind if I publish them as a post. 

"From a one time fence sitter (Until today that is)

So Hutton's have come out with an official response to the Vice Chairman's letter, all well and good and they seem to rebut his concerns with clear and concise points.

Except, there is a glaring omission, and a rather large one at that.



Nowhere in the rebuttal does Mr Lian mention the reason he gave to the Sales Committee for the reduction of the reserve price, as recorded in the 'Minutes Of Sales Committee 13th Meeting' dated 28th July 2016, some 12 days ago, and I quote..


"Mr Terence explained that the revised RP was done after a site recce which concluded that the construction cost of a new development at the current Tampines Court site would increase due to the “Silver Zone” roads which would hamper movement of heavy vehicles, resulting in having to use alternative construction methods. This increase in construction cost would be taken into consideration by prospective developers."

Before I go on I would like to point out that prior to the rebuttal of 10th August 2016 this seems to be the only reason given for the decrease in the reserve price, according to the 'Minutes Of Sales Committee 13th Meeting' dated 28th July 2016.

Now, many may think this is a valid and reasonable argument, and at face value it looks good on paper, except it's neither valid nor reasonable for the following reasons:

1. HDB have managed to build a new multi story HDB car park next door with a minimum of fuss or inconvenience with all the heavy machinery that this involves whilst the silver zone has been in operation.

2. Prior to this the HDB built a multi story block of flats beside said car park, yes, this was before the silver zone came into operation and I recall about as much fuss and inconvenience as when the car park was built, ie. very little.

So, unless Silver Zones have strict rules governing what kind of traffic can use roads in the Silver Zone then I don’t see how this could be an issue, in fact it is probably to the advantage of the construction crews as there is a strict speed limit in place in these Silver Zones, thus giving heavy machinery better and safer opportunities to enter and exit the work site in traffic that is not speeding by.

3. Last one, I promise…
Once a small portion of the site is cleared this will be used as a staging area for all heavy machinery that needs to have access to the site, heavy machinery will simply not be allowed to remain along Tampines Street 11 and so will cause a minimum of fuss and inconvenience. In fact there are other locations that could be used to access the site, not just from Tampines Street 11

The rebuttal from Huttons now outlines myriad factors as to why the reserve price was lowered (projected gross sales proceeds minus development cost, lease upgrade premium, demolition, construction cost etc etc)

This is a far cry from the initial reason given, ie. the Silver Zone



So why didn’t Hutton’s outline these factors initially instead of using the Silver Zone as the excuse?

You would have to ask them.

What I can say is that it doesn’t instill confidence and smacks of being disingenuous, this kind of flip flopping doesn’t gain my trust, in fact it alienates me entirely from the whole process as I no longer have faith in them to get the best price for me and my neighbours.

It seems to me that real estate agents are all about one thing and one thing only and you would do well to keep it uppermost in your mind, how much can THEY make out of it, and they don’t particularly care who they trample on to obtain it.

Anyway, let’s have a look at the cold hard facts, the numbers don’t lie...
Reserve Price #1: XXX,000,000*
Amount Per Unit: 1,xxx,000*
1% Agent Fee: 
Balance: 

Reserve Price #2: YYY,200,000*
Amount Per Unit: 1,yyy,000*
1% Agent Fee: 
Balance: 
Difference in what SP's will receive at the lower reserve price: $79,200, quite a substantial amount I think you would agree.

Now, onto the the real crux of the numbers game, Hutton's Fees:

Reserve Price #1: XXX,000,000*
1% Agent Fee: 

Reserve Price #2: YYY,200,000*

1% Agent Fee: 

Difference in what Hutton's will take home at the lower reserve price: 448,000, again, a substantial amount until you consider the difference between X.XX million and Y.YY million isn’t really that big of a deal whereas x.xx million and y.yy million certainly is…

(sensitive information edited out)*

3 comments:

  1. Hi, there is no need to hide the reserve price. It is an open secret and we can find it any where in TC enbloc facebook. It will be easier for us to read with the actual figures. Thank you.

    ReplyDelete
    Replies
    1. I am being overly cautious, but you are right. They have now openly published the reserve price through their rebuttal letter and the sales proceeds/unit in their FAQ. All can be viewed on their Facebook page without even signing in.

      Delete
  2. Further to my post above I took the liberty of doing a simple spreadsheet (Link below) so that others can get an idea of what different reserve prices means for SP's and if you wish, you have something to ask the MA about at their meeting on Sunday 18th September.
    Do bear in mind that the most important thing you can ask the MA about at that meeting is about the Residual Land Value (RLV) - They are very reluctant to address this.

    I have used some common numbers that have been bandied about and the columns that should be of most interest to SP's are:
    Column D (What SP's will get after fees)
    Column E (The difference in what SP's would get in dollars - These numbers in particular should be of interest and will hit home the hardest)

    Happy viewing!
    https://docs.google.com/spreadsheets/d/1szOLFnqila8zo9j_q5Tea0lQxxwmnw8GzvUkJgBrLXM/edit#gid=0
    (You may have to copy and paste the link above)

    ReplyDelete