Real estate is one of those purchases where “small additional costs” are important. Even a few extra square feet can cost up to thousands of dollars, so the Singapore real estate market rewards the attention to detail. However, most new buyers just know that they need to look for the most obvious elements, such as: B. the unit opposite or the comparative price. In this article, we highlight the “little” potential wasters who can actually make a bigger difference than you might think. Here’s what to look out for:
Potential money wasting features when buying property
- Large air conditioning strips
- Long corridors, sidewalks and anterooms
- Large plant boxes
- Pay for white space
- Choose an expensive transport company
- Unnecessary use of deferred payments
1. Large air conditioners
Air conditioning systems are not counted as part of the gross floor area (GFA) provided they are not more than one meter wide (measured perpendicular to the wall). However, they are considered part of the strata area.
This could encourage developers to build unnecessarily large air conditioners at the buyer’s expense: they pay for the square footage added by the ledge, but the developer didn’t have to pay higher GFA.
Landlords should also be concerned. Over the years, tenants have gotten smarter – many tenants will now review the usable square footage, not just the overall size of the units; This is one of the first questions a landlord can expect when tenants see large air conditioners.
The excitement reached parliament as early as 2017. However, the answer from the Ministry of National Development (MND) is noteworthy:
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“It is already mandatory for home builders to provide potential home buyers with a full-scale floor plan of the unit and a detailed breakdown of the area of the unit by different types of rooms such as bedrooms, bathrooms, air conditioning projections, and balconies … home buyers are encouraged to review the information, to make an informed purchase decision. “
In short, the construction of large air conditioners is not regulated. It’s up to you to review the floor plans and see if the size of the bar makes sense.
For reference, the air conditioning in a 4-room or 5-room HDB apartment (approximately 970 to 1,184 sq. Ft.) Is approximately 32.3 sq. ft. Similar sized condos shouldn’t need a much larger ledge.
2. Long corridors, walkways and anterooms
Traditionalists may disagree, but by today’s standards, most buyers consider walkways and corridors to be inefficient. These aren’t functional or living spaces, but you still pay for the square footage. Hence, consider dumbbell layouts where the bedrooms are positioned on either side of the living room. this makes a corridor superfluous.
Another feature found in older condos is a type of anteroom or small alcove that the front door opens into. This is a place to set up shoe racks, umbrella stands, etc. and leads into the actual living room. Due to its limited function, this can also be a waste of space.
(However, some buyers don’t like front doors that lead directly into living rooms. These buyers don’t like dumbbell layouts.)
3. Large plant boxes
Plant boxes are more common in older condominiums. However, we still occasionally see large planters, such as in the recently released One Pearl Bank.
Large planters are designed to give homeowners without land a chance to garden. However, planters will require you to take care of the plants so they don’t become an eyesore. Check out condos that have these and you will often see clumps of dead plants or just empty planters. They are also difficult – if not impossible – to convert for other uses (it often affects the facade of the apartment so the administration won’t let you change it).
Tenants tend to exclude plant boxes as “usable space”, so landlords should carefully consider the additional square footage and the price.
4. Pay for white space
The average floor-to-ceiling height of a condominium is 2.8 meters. However, once you reach four feet or more, the chances are that you’ll be paying for white space. This refers to the empty space above the floor that can be used to build mezzanines or other floors. White space is Strata, so buyers pay for it.
The hard part is figuring out if it’s worth paying for it. Empty space can be worth the price in plots where you’re more likely to get a mezzanine permit, add another level, etc.
However, on non-landed lots, the empty space serves only a limited purpose: it makes the unit feel more spacious and potentially improves natural light. In addition, it may be nothing more than an expensive treat.
We recommend that you first discuss the floor plans with an interior designer or contractor and work out your options.
In the case of new developments, the space must be clearly indicated by the developer; You will be asked to provide written confirmation that you understand the details before debiting the booking fee.
For resale developments, you will need to check the details for yourself. You can find the information on INLIS.
5. Choose an expensive transportation company
You need a transportation company for your real estate transaction, which typically charges between $ 2,500 and $ 3,000. Note, however, that any bank tends to only work with a handful of transportation companies (they are often described as “on the bank’s board of directors”).
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In general, it is best to avoid a company that is only on the board of directors of your specific lender. This is because your new bank will not work with this company on a later refinancing attempt. You will likely need to select a transportation company on the board of your new bank and this will entail additional legal documentation (the new company will have to take over your existing one).
There is practically no difference when it comes to attorney fees ranging from $ 2,500 to $ 3,000 (unless you really like a particular lawyer). Hence, savvy buyers will insist on choosing the cheapest.
In general, larger “branded” law firms charge more. Smaller businesses that may only focus on transferring may ask for less.
6. Unnecessary use of deferred payment
The Deferred Payment Scheme (DPS) is often advertised as a big bonus for late-stage buyers. These are sometimes available for new start-up properties that have just received their Temporary Residence Permit (TOP).
The most common form of DPS calls for a down payment of 20 percent, after which you pay nothing for another 24 months. During this two-year “break” you can move in freely and you may even rent out some of the apartment. Particularly attractive for those who have just moved up to HDB: You can first move in and then sell your former apartment in peace.
However, we advise you not to take the DPS just because you can.
The DPS can come at a high price – the total quantum can be up to 20 percent higher. If you already have a secured home loan and you have the financial means, you may be able to save more with a regular loan.
In addition, there is a risk that your income level will change during the 24 months. If your income is falling and you are unable to meet loan service quotas, chances are you will not qualify for adequate loan. This would cause your 20 percent deposit to be forfeited along with other possible penalties.
DPS can give you additional “breathing space”, but it cannot be confused with improved affordability. Usually you pay more, not less.
Remember that all “small costs” add up
Viewed in isolation, any “small price” may seem insignificant. However, when you add up the square footage of planters and white space, pick the more expensive law firm, get an inefficient layout that tenants won’t pay for, etc., the total cost to you can ultimately dwarf your ROI.
