"Are you afraid?" asked Suze Orman. "Are you afraid when it comes to your money? Well, you should be." The lively personal finance expert and host of CNBC's The Suze Orman Show appeared at Chicago Ideas Week (CIW) last night, where she was interviewed by CIW founder Brad Keywell before an auditorium full of people who admitted, via raised hands, that they were racked with credit card debt, that they struggled to pay their mortgages and that they had no idea what a municipal bond was.
"How is that possible?" asked Orman, astonished. "Why aren't we teaching personal finance in school?" (A municipal bond, by the way, is a bond issued by the local government; income from it is often—although not always—exempt from income tax.) At Chicago Ideas Week, Orman offered a no-nonsense, tough love type of financial advice that says if you can't afford something, don't buy it. Here are some of the ideas she had: (See a Q&A with Suze Orman on the death of the American financial dream.)
Idea No. 1: You can't wait for the market to save you.
"The real estate market isn't going to come back until at least 2023," Orman predicted. "If you can't afford your home, you need to figure out what to do. You have to make a plan and that plan can't be that the market will save you." Similarly, if you see a house on the market that looks like a good deal, don't buy it. "Don't you dare," said Orman. Unless, of course, you can easily put 20% of the money down and pay the property taxes, mortgage and insurance comfortably with your current salary—and your job is secure. Then, as long as the house will be your primary residence, go right ahead.
Idea No. 2: Pay in cash
If you pay for something in cash, you won't have debt. It's as simple as that. If you have credit card debt, pay that off as fast as you can. (See Suze Orman in the 2010 TIME 100.)
Idea No. 3: Men need to stop pretending they know more about financial planning than they do. "Men are financial fakers," said Orman. When she worked as a financial planner, she said, married couples would come in for advice and "when the wife got up to go to the bathroom, I'd lay out this very complicated, totally made up plan for the husband. I'd say, 'You do this, and this, and this—are you following me?' and the husband would nod and say, 'Yes, Suze. To the letter.'" Then when the wife came back, she'd ask the husband to explain it to her and he couldn't. "Of course he couldn't! It wasn't a real plan!" Orman says that even today, men feel pressure to pretend like they know what they're doing. "That's how Bernie Madoff happened," she said. "One guy told another guy, who told another guy, who told another guy, and not one of them knew what they were doing." Women, on the other hand, have no problem asking someone to explain an idea to them again.
Idea No. 4: Save money.
This was a weaker point in Orman's talk because she didn't explain how people are supposed to save money. Orman recommends having eight months of savings in the bank so that if you find yourself without a job, you can still pay your bills. That's a nice idea, but many people can barely pay their bills now; how are they supposed to save money? "If you lose your job, how are you going to continue to pay those bills?" Orman counters. That's a good point, but it still doesn't explain anything. Becoming financially secure can sometimes be harder than you think.
Read more: http://www.time.com/time/specials/packages/article/0,28804,2096504_2096506_2096751,00.html #ixzz1aiZ9vlXp
Thursday, October 13, 2011
Saturday, October 8, 2011
Crucial to name caregiver while mentally competent
Only 1,038 people have appointed caregivers under the Mental Capacity Act since its implementation in March last year. -AsiaOne
Sat, Oct 08, 2011
AsiaOne
The Office of the Public Guardian (OPG) is increasing measures to raise awareness of the need to name a caregiver before one's mental health declines in old age.
The Straits Times reported that Acting Minister for Community Development, Youth and Sports (MCYS) Mr Chan Chun Sing led by example yesterday by appointing his wife to take charge of his welfare should anything untoward happen to him.
Speaking to about 1,000 people at the Grand Copthorne Hotel yesterday, Mr Chan also reiterated that caregiving is "becoming a prominent issue" in the context of an ageing population like Singapore's as we are "one of the fastest ageing socieities in the world".
As of Oct 1, only 1,038 people have appointed caregivers under the Mental Capacity Act since its implementation in March last year.
The act allows people above the age of 21 to make a "Lasting Power of Attorney" as long as they are deemed mentally sound by a doctor or lawyer.
Here is the full text of Minister Chan Chun Sing's speech.
The Honourable the Chief Justice Chan Sek Keong
Mr Richard Magnus, Chairman, Public Guardian Board
Members of the Public Guardian Board
Distinguished Guests
Ladies and Gentlemen
Good afternoon.
Thank you for taking the time to join us at this forum today to discuss a very important and pressing issue.
It is the issue of caregiving within the framework of the Mental Capacity Act; that is, caring for those who have lost the capacity to make their own choices and decisions.
We are honoured to have in the audience, members from the legal fraternity, healthcare, grassroots and social service sectors, and members of the public who are caregivers or proxy decision makers for someone who has lost his mental capacity.
It is heartening that this forum has attracted such a wide spectrum of participants, from the Public, Private and People sectors.
This reflects the nature of caregiving for a vulnerable category of individuals - one which is community-based, involving multi-agencies and individuals who all play distinct, yet equally important roles that contribute to the well-being and protection of individuals in need.
Caregiving is becoming a prominent issue in the context of an ageing population like ours.
We are one of the fastest ageing societies in the world. Our rate of ageing is projected to rise from an average of four percent per annum in 2000-2011, to six percent per annum from 2012- 2020[1].
With longer lifespan, we will have a higher proportion of Singaporeans living to ages of 85 and beyond.
As the incidence rate of dementia increases with age, we can expect a higher portion of elderly developing dementia in the future.
By 2020, one in 12 Singaporeans above 65 years of age is likely to develop dementia, compared to one in 20 currently[2].
A fast ageing population will present unique and diverse challenges relating to the care of individuals with diminished capacity.
Besides professional caregivers, most, if not all of us, will play the role of a caregiver, in varying degrees, at some point in our lives.
What then are our roles and responsibilities as caregivers; particularly in relation to those who depend on us to decide and act on their behalf?
The Mental Capacity Act, which came into effect in March 2010, now provides a legal framework for the care of persons lacking capacity.
There is also a Code of Practice, which was drawn up to provide information for the general public, specifying basic guidelines and highlighting best practices in caring and making decisions on behalf of a person without capacity.
Decision-makers include caregivers, nurses, doctors, donees of a Lasting Power of Attorney (LPA) and court-appointed deputies.
These guidelines emanate from the basic social value of respect for the dignity of all individuals which is a key tenet in the Mental Capacity Act.
An important guiding principle within the Code of Practice is the concept of 'best interests' 'Best interests', is a familiar common law concept. But many will likely ask how this can be exercised practically in relation to caregiving for those without capacity.
Let me illustrate how this concept of 'best interests' is practised from the experience of Ms Joyce Soon who, for the past eight years, has been the primary caregiver for her mother who suffers from Alzheimer's disease.
Joyce will be sharing her caregiving experience at one of the sessions later.
Joyce had initially placed her mother in a non-home environment in the hope that she would benefit from professional care.
However, she soon realised that her mother did not settle well there and looked depressed. She knew that this would only cause her mother's condition to deteriorate faster.
Hence, instead of making a decision that would likely cater to her own convenience, Joyce decided that in her mother's 'best interests', she should provide care for her in a home environment.
Joyce's experience and the options that she made for her mother's 'best interests' in this case may not be applicable to all caregiving situations given that each circumstance is unique.
Determining the person's 'best interests' should underpin all our caregiving approach for an individual without capacity.
'Best interests' as advocated in the new Mental Capacity Act is part of the protective framework to ensure that the needs and interests of the vulnerable in our society are protected.
It also provides an avenue for caregivers to account for any action or decision made on behalf of a vulnerable person without capacity.
In a fast ageing population like Singapore's, demand for caregiving is growing and continues to evolve.
While the Government continues to work with our partners to meet the needs of the vulnerable in our midst, the community plays an equally, if not more important role.
A successful country is more than the economic success it has achieved. The hallmark of a truly developed country is the compassion that its citizens have for the needy, disadvantaged and vulnerable amongst us.
I applaud each of you here who has contributed to caregiving, and play your specific roles whether at home or professionally. I hope together, we can make a positive difference in the lives of those in need.
Last but not least, I wish you a fruitful seminar. Thank you.
Sat, Oct 08, 2011
AsiaOne
The Office of the Public Guardian (OPG) is increasing measures to raise awareness of the need to name a caregiver before one's mental health declines in old age.
The Straits Times reported that Acting Minister for Community Development, Youth and Sports (MCYS) Mr Chan Chun Sing led by example yesterday by appointing his wife to take charge of his welfare should anything untoward happen to him.
Speaking to about 1,000 people at the Grand Copthorne Hotel yesterday, Mr Chan also reiterated that caregiving is "becoming a prominent issue" in the context of an ageing population like Singapore's as we are "one of the fastest ageing socieities in the world".
As of Oct 1, only 1,038 people have appointed caregivers under the Mental Capacity Act since its implementation in March last year.
The act allows people above the age of 21 to make a "Lasting Power of Attorney" as long as they are deemed mentally sound by a doctor or lawyer.
Here is the full text of Minister Chan Chun Sing's speech.
The Honourable the Chief Justice Chan Sek Keong
Mr Richard Magnus, Chairman, Public Guardian Board
Members of the Public Guardian Board
Distinguished Guests
Ladies and Gentlemen
Good afternoon.
Thank you for taking the time to join us at this forum today to discuss a very important and pressing issue.
It is the issue of caregiving within the framework of the Mental Capacity Act; that is, caring for those who have lost the capacity to make their own choices and decisions.
We are honoured to have in the audience, members from the legal fraternity, healthcare, grassroots and social service sectors, and members of the public who are caregivers or proxy decision makers for someone who has lost his mental capacity.
It is heartening that this forum has attracted such a wide spectrum of participants, from the Public, Private and People sectors.
This reflects the nature of caregiving for a vulnerable category of individuals - one which is community-based, involving multi-agencies and individuals who all play distinct, yet equally important roles that contribute to the well-being and protection of individuals in need.
Caregiving is becoming a prominent issue in the context of an ageing population like ours.
We are one of the fastest ageing societies in the world. Our rate of ageing is projected to rise from an average of four percent per annum in 2000-2011, to six percent per annum from 2012- 2020[1].
With longer lifespan, we will have a higher proportion of Singaporeans living to ages of 85 and beyond.
As the incidence rate of dementia increases with age, we can expect a higher portion of elderly developing dementia in the future.
By 2020, one in 12 Singaporeans above 65 years of age is likely to develop dementia, compared to one in 20 currently[2].
A fast ageing population will present unique and diverse challenges relating to the care of individuals with diminished capacity.
Besides professional caregivers, most, if not all of us, will play the role of a caregiver, in varying degrees, at some point in our lives.
What then are our roles and responsibilities as caregivers; particularly in relation to those who depend on us to decide and act on their behalf?
The Mental Capacity Act, which came into effect in March 2010, now provides a legal framework for the care of persons lacking capacity.
There is also a Code of Practice, which was drawn up to provide information for the general public, specifying basic guidelines and highlighting best practices in caring and making decisions on behalf of a person without capacity.
Decision-makers include caregivers, nurses, doctors, donees of a Lasting Power of Attorney (LPA) and court-appointed deputies.
These guidelines emanate from the basic social value of respect for the dignity of all individuals which is a key tenet in the Mental Capacity Act.
An important guiding principle within the Code of Practice is the concept of 'best interests' 'Best interests', is a familiar common law concept. But many will likely ask how this can be exercised practically in relation to caregiving for those without capacity.
Let me illustrate how this concept of 'best interests' is practised from the experience of Ms Joyce Soon who, for the past eight years, has been the primary caregiver for her mother who suffers from Alzheimer's disease.
Joyce will be sharing her caregiving experience at one of the sessions later.
Joyce had initially placed her mother in a non-home environment in the hope that she would benefit from professional care.
However, she soon realised that her mother did not settle well there and looked depressed. She knew that this would only cause her mother's condition to deteriorate faster.
Hence, instead of making a decision that would likely cater to her own convenience, Joyce decided that in her mother's 'best interests', she should provide care for her in a home environment.
Joyce's experience and the options that she made for her mother's 'best interests' in this case may not be applicable to all caregiving situations given that each circumstance is unique.
Determining the person's 'best interests' should underpin all our caregiving approach for an individual without capacity.
'Best interests' as advocated in the new Mental Capacity Act is part of the protective framework to ensure that the needs and interests of the vulnerable in our society are protected.
It also provides an avenue for caregivers to account for any action or decision made on behalf of a vulnerable person without capacity.
In a fast ageing population like Singapore's, demand for caregiving is growing and continues to evolve.
While the Government continues to work with our partners to meet the needs of the vulnerable in our midst, the community plays an equally, if not more important role.
A successful country is more than the economic success it has achieved. The hallmark of a truly developed country is the compassion that its citizens have for the needy, disadvantaged and vulnerable amongst us.
I applaud each of you here who has contributed to caregiving, and play your specific roles whether at home or professionally. I hope together, we can make a positive difference in the lives of those in need.
Last but not least, I wish you a fruitful seminar. Thank you.
Tuesday, September 27, 2011
Psychology of Money
Why You Shouldn’t Buy Winter Clothes in Winter
By Gary Belsky & Tom Gilovich | September 23, 2011
In our first Moneyland post we advocated a “Wait and C” strategy for big financial moves, especially spending ones. Our basic idea was that many decisions, to the extent that they’re affected by hidden biases or impulses, would be improved with even a short amount of deliberation and discussion with knowledgeable and otherwise disinterested friends (the “C” stands for consult).
Well, some not-even-on-the-presses-yet research suggests that such a strategy will save you even more money than we suspected. To explain, we must first introduce you to a concept called “projection bias,” which details the way people routinely overestimate the extent that their future desires and needs will match their current ones. That is, we think we’ll love a certain kind of product, lifestyle or activity as much tomorrow as we do today, when in fact our tastes and needs will differ, sometimes significantly. This error in judgment has much to do with our failure to grasp how much we actually change over time, but other factors certainly play their part.
Exhibit A: Tom recently attended a talk at Cornell given by U. of Chicago behavioral economist Devin Pope, who’s in the early stages of a paper (co-authored with his brother, Brigham Young economist Jaren Pope) on the effects of projection bias in housing and car markets. It’s significant research, because much of the work done so far on the subject has focused on low- or medium-stake purchases, such as groceries and clothing. (Catalog shoppers, for example, are more likely to return cold-weather apparel if it was ordered when the local weather was especially chilly.)
(LIST: 12 Things You Should Stop Buying Now)
But it turns out that even major purchases are influenced to a greater extent than people realize by immediate circumstances and conditions. So houses with swimming pools fetch a premium when bought in the summer, while convertibles sell at a faster pace during that time. Likewise, four-wheel drive cars sell more briskly in the winter in general and during snowstorms in particular.
We know what you’re thinking: Duh! People also drink more hot chocolate in December. Well, yes, it’s natural for current conditions to affect current choices, especially when it comes to decisions with immediate consequences. But houses and cars are not impulse buys; they’re long-term investments. More crucially, if you like to swim you shouldn’t value the ability to do so in your backyard more in June than you do in February. But that’s exactly what happens, according the Popes’ research, to a degree that’s measurable and translates into real money. Similarly, you might predict that you’ll be thrilled with a rag top in springs and summers to come, but you’re less likely to imagine that will be the case if you’re pondering a car purchase in November.
(MORE: 5 Ways to Prepare for a Double Dip)
Our point here is not to chastise anyone for emotional purchases or throw a wrench into your long-term planning. Rather, we just want to offer further incentive for anyone and everyone to discuss major purchases with a trusted but disinterested party before pulling the trigger. It can’t hurt, and it could keep you from spending money you otherwise wouldn’t, or paying more for what you do buy than you otherwise would.
Read more: http://moneyland.time.com/2011/09/23/why-you-shouldnt-buy-winter-clothes-in-winter/#ixzz1ZDMucpUH
By Gary Belsky & Tom Gilovich | September 23, 2011
In our first Moneyland post we advocated a “Wait and C” strategy for big financial moves, especially spending ones. Our basic idea was that many decisions, to the extent that they’re affected by hidden biases or impulses, would be improved with even a short amount of deliberation and discussion with knowledgeable and otherwise disinterested friends (the “C” stands for consult).
Well, some not-even-on-the-presses-yet research suggests that such a strategy will save you even more money than we suspected. To explain, we must first introduce you to a concept called “projection bias,” which details the way people routinely overestimate the extent that their future desires and needs will match their current ones. That is, we think we’ll love a certain kind of product, lifestyle or activity as much tomorrow as we do today, when in fact our tastes and needs will differ, sometimes significantly. This error in judgment has much to do with our failure to grasp how much we actually change over time, but other factors certainly play their part.
Exhibit A: Tom recently attended a talk at Cornell given by U. of Chicago behavioral economist Devin Pope, who’s in the early stages of a paper (co-authored with his brother, Brigham Young economist Jaren Pope) on the effects of projection bias in housing and car markets. It’s significant research, because much of the work done so far on the subject has focused on low- or medium-stake purchases, such as groceries and clothing. (Catalog shoppers, for example, are more likely to return cold-weather apparel if it was ordered when the local weather was especially chilly.)
(LIST: 12 Things You Should Stop Buying Now)
But it turns out that even major purchases are influenced to a greater extent than people realize by immediate circumstances and conditions. So houses with swimming pools fetch a premium when bought in the summer, while convertibles sell at a faster pace during that time. Likewise, four-wheel drive cars sell more briskly in the winter in general and during snowstorms in particular.
We know what you’re thinking: Duh! People also drink more hot chocolate in December. Well, yes, it’s natural for current conditions to affect current choices, especially when it comes to decisions with immediate consequences. But houses and cars are not impulse buys; they’re long-term investments. More crucially, if you like to swim you shouldn’t value the ability to do so in your backyard more in June than you do in February. But that’s exactly what happens, according the Popes’ research, to a degree that’s measurable and translates into real money. Similarly, you might predict that you’ll be thrilled with a rag top in springs and summers to come, but you’re less likely to imagine that will be the case if you’re pondering a car purchase in November.
(MORE: 5 Ways to Prepare for a Double Dip)
Our point here is not to chastise anyone for emotional purchases or throw a wrench into your long-term planning. Rather, we just want to offer further incentive for anyone and everyone to discuss major purchases with a trusted but disinterested party before pulling the trigger. It can’t hurt, and it could keep you from spending money you otherwise wouldn’t, or paying more for what you do buy than you otherwise would.
Read more: http://moneyland.time.com/2011/09/23/why-you-shouldnt-buy-winter-clothes-in-winter/#ixzz1ZDMucpUH
Tuesday, September 20, 2011
5 things your property agent never told you
Wed, Sep 21, 2011
Home & Decor
By Stella Thng
Buying or selling a home is one of the most expensive, complicated events in your life, no thanks to the ever-changing government regulations.
Whether it's your eligibility for a loan or the bewildering range of seller's stamp duties depending on your occupation period, it can all snowball into one huge headache.
So, most of us shell out good (commission) money for a property agent hoping to tap into their expertise to buy that dream ?home at a bargain or sell your property at a premium.
Housing agents might have the industry knowledge to help you make a good deal, but be aware of what they're not telling you, too.
1. The HDB does not require you to engage a property agent
Many first-time home-buyers do not know this.
When adjunct lecturer Tang Xueling bought her first HDB flat a decade ago with her husband, they didn't have an agent and the seller's became theirs by default, picking up an easy commission. They had no idea then that if they were willing to handle the paperwork themselves, they wouldn't even need to pay for an agent.
"Since Jan 1, 2011, agents may only collect a commissionfrom one party even if he represents both. This prevents any conflict of interest," says Kelvin Fong, a top-ranking group district director at PropNex, who leads over 1,200 real estate agents.
Generally, it is not difficult for buyers to represent themselves as long as they work closely with the seller's agent to prepare all the necessary documents.
But sellers who want to cut out the middleman may find it more daunting. They have to market the property, screen enquiries and organise viewings. Even if you make a successful sale, there's the complicated paperwork and various deadlines to deal with.
Marcia Lai, director of Faith Property Network, an associate company of international real estate company Re/max, explains: "Many sellers may lack the technical know-how, especially about the new HDB regulations introduced recently."
This may delay the completion of the transaction and affect the hand-over date. For some sellers, saving that few thousand dollars in commission is not worth the hassle.
What about buying a resale private property? Since buyers do not have to pay commission, your agent will collect a co-broking commission from the seller's agent. You get someone looking out for your interest, so why not?
2. It's better to sign with an exclusive agent (but only if he's the real deal)
Exclusive contracts last three months and the commission for selling a HDB or private property is usually one to two per cent of the selling price.
Marcia says that sellers usually fare better when they work with a trusted exclusive agent. As he will handle all enquiries, he is in a better position to secure the highest possible price.
"When too many agents are marketing the same unit, some may try to close the deal quickly by persuading you to grab the first offer instead of waiting for a better price," she says.
According to Kelvin, an exclusive agent should provide all forms of media exposure such as classified newspaper ads, online or by printing brochures.
He should also be part of a network of agents who help each other by finding the right buyers for their clients' property, and be open to co-broke with other agents who can fetch a good price.
If you suspect that your agent is not performing, ask to see proof of his marketing efforts. You can break the contract if he can't back up his promises.
To weed out rogue agents and protect buyers and sellers, the Council for Estate Agencies (CEA) implemented new guidelines which came into effect from August 1, 2011, with eight templates for contracts that agents must use for the sale, purchase or lease of properties.
CEA also spelled out the proper use of these forms as well as commission clauses, disclosure requirements and co-broking clauses.
3. Your property may be used as a 'showflat'
Should sellers go with an agent who claims to specialise in your area?
His experience may come in handy, but he is probably also marketing several units in the neighbourhood - and they're all your competitors.
In the worst-case scenario, your home may be used as a "showflat" as homeowner YS Liang discovered.
"Weekend after weekend, our agent would bring a stream of people to speed-visit our apartment, leaving within minutes. She didn't even try to promote our apartment. It felt like we were just one of the many tour stops for her clients," he complains.
According to Kelvin, other agents could also make use of your agent's listings.
"If your pricing is on the high side, these agents may use your home to convince their buyers why they should buy another apartment."
To counter this, Kelvin says it is crucial for your agent to offer a current market analysis before putting up your home for sale. "This helps you price your property correctly and realistically."
4. An experienced agent can help with your financial planning
Your property has appreciated but until you sell it, you're just sitting on paper gain.
"Property is the biggest asset for most Singaporeans, so you should leverage on it to create more wealth. The problem is that many agents keep asking the seller to sell, but do not help to plan what you can do with the profits," laments Kelvin.
His suggestion? Cash out and use part of the profits as downpayment for a new home. Invest the rest in another property to collect rent.
Buyers can borrow up to 80 per cent of the price of their first private residential property, and 60 per cent for the second.
Kelvin points out that there is no such cap for commercial properties as long as you meet the bank's loan criteria.
5. There's little your agent can do once the deal is done
You've excitedly moved into your new crib, only to realise that the air-con isn't working and the plumbing is choked. Can your agent negotiate with the seller to pay for the repairs? Sorry, his hands are tied.
Once you put down the one per cent option fee to hold down a private property, you have to accept its condition as it is when you move in - faulty air-con, choked toilet and all.
Get around this by asking your agent to include a final inspection clause in the option-to-buy letter. HDB flat buyers automatically enjoy this safety net.
"There is a final inspection of the property two days before the completion of all HDB transactions. If the air-con is faulty, you can request the seller to repair it," says Kelvin.
What happens if your seller backs out of the sale and refuses to return your deposit?
Marcia shares an example that happened to her friend. During the second appointment at HDB, he learned that the seller had not paid his monthly instalments and Town Council fees for over a year, and the transaction could not be completed.
"Although my friend offered to clear the Town Council arrears, the seller changed his mind and said he'd rather let the HDB repossess his home. He had also spent the $5,000 deposit and blatantly said he was too broke to ?pay back the money," recalls Marcia.
Unfortunately, agents do not have the authority to check on a seller's records with the HDB or the Town Council, which might help to flag such potential high-risk cases. Often, they are as much a victim of the unscrupulous seller as the buyer is.
In this case, both the seller's and buyer's agents could not collect any commission as the sale did not go through.
Your agent's role is purely as a middleman to facilitate the transaction. Once all the paperwork is processed, his job is done.
Having said that, "A responsible property agent must help his buyer look out for all potential risks and not just think of making a quick commission. If your buyer is unhappy, the problem will come back to you," advocates Kelvin.
Whether you hire an agent or not, property investment is an expensive business, so always do your own research. Buyers can check out recently transacted prices of HDB and private properties at www.hdb.gov.sg or ura.gov.sg before setting their budget or selling price.
Visit the unit at different times of the day and observe the neighbourhood. If possible, speak with the neighbours to get a better feel of whether you and your family will fit in. It is also a good chance to find out if your seller has a dubious past.
Be Informed
Still game to go agent-less? Pick up tips at the "Resale Seminar for Buyers and Sellers" organised by the HDB. It costs $25 per person and sessions are conducted in English, Chinese and Malay. The next English session is on September 3 at HDB Hub. Register online at the HDB website, at HDB Hub or any HDB branch office
Home & Decor
By Stella Thng
Buying or selling a home is one of the most expensive, complicated events in your life, no thanks to the ever-changing government regulations.
Whether it's your eligibility for a loan or the bewildering range of seller's stamp duties depending on your occupation period, it can all snowball into one huge headache.
So, most of us shell out good (commission) money for a property agent hoping to tap into their expertise to buy that dream ?home at a bargain or sell your property at a premium.
Housing agents might have the industry knowledge to help you make a good deal, but be aware of what they're not telling you, too.
1. The HDB does not require you to engage a property agent
Many first-time home-buyers do not know this.
When adjunct lecturer Tang Xueling bought her first HDB flat a decade ago with her husband, they didn't have an agent and the seller's became theirs by default, picking up an easy commission. They had no idea then that if they were willing to handle the paperwork themselves, they wouldn't even need to pay for an agent.
"Since Jan 1, 2011, agents may only collect a commissionfrom one party even if he represents both. This prevents any conflict of interest," says Kelvin Fong, a top-ranking group district director at PropNex, who leads over 1,200 real estate agents.
Generally, it is not difficult for buyers to represent themselves as long as they work closely with the seller's agent to prepare all the necessary documents.
But sellers who want to cut out the middleman may find it more daunting. They have to market the property, screen enquiries and organise viewings. Even if you make a successful sale, there's the complicated paperwork and various deadlines to deal with.
Marcia Lai, director of Faith Property Network, an associate company of international real estate company Re/max, explains: "Many sellers may lack the technical know-how, especially about the new HDB regulations introduced recently."
This may delay the completion of the transaction and affect the hand-over date. For some sellers, saving that few thousand dollars in commission is not worth the hassle.
What about buying a resale private property? Since buyers do not have to pay commission, your agent will collect a co-broking commission from the seller's agent. You get someone looking out for your interest, so why not?
2. It's better to sign with an exclusive agent (but only if he's the real deal)
Exclusive contracts last three months and the commission for selling a HDB or private property is usually one to two per cent of the selling price.
Marcia says that sellers usually fare better when they work with a trusted exclusive agent. As he will handle all enquiries, he is in a better position to secure the highest possible price.
"When too many agents are marketing the same unit, some may try to close the deal quickly by persuading you to grab the first offer instead of waiting for a better price," she says.
According to Kelvin, an exclusive agent should provide all forms of media exposure such as classified newspaper ads, online or by printing brochures.
He should also be part of a network of agents who help each other by finding the right buyers for their clients' property, and be open to co-broke with other agents who can fetch a good price.
If you suspect that your agent is not performing, ask to see proof of his marketing efforts. You can break the contract if he can't back up his promises.
To weed out rogue agents and protect buyers and sellers, the Council for Estate Agencies (CEA) implemented new guidelines which came into effect from August 1, 2011, with eight templates for contracts that agents must use for the sale, purchase or lease of properties.
CEA also spelled out the proper use of these forms as well as commission clauses, disclosure requirements and co-broking clauses.
3. Your property may be used as a 'showflat'
Should sellers go with an agent who claims to specialise in your area?
His experience may come in handy, but he is probably also marketing several units in the neighbourhood - and they're all your competitors.
In the worst-case scenario, your home may be used as a "showflat" as homeowner YS Liang discovered.
"Weekend after weekend, our agent would bring a stream of people to speed-visit our apartment, leaving within minutes. She didn't even try to promote our apartment. It felt like we were just one of the many tour stops for her clients," he complains.
According to Kelvin, other agents could also make use of your agent's listings.
"If your pricing is on the high side, these agents may use your home to convince their buyers why they should buy another apartment."
To counter this, Kelvin says it is crucial for your agent to offer a current market analysis before putting up your home for sale. "This helps you price your property correctly and realistically."
4. An experienced agent can help with your financial planning
Your property has appreciated but until you sell it, you're just sitting on paper gain.
"Property is the biggest asset for most Singaporeans, so you should leverage on it to create more wealth. The problem is that many agents keep asking the seller to sell, but do not help to plan what you can do with the profits," laments Kelvin.
His suggestion? Cash out and use part of the profits as downpayment for a new home. Invest the rest in another property to collect rent.
Buyers can borrow up to 80 per cent of the price of their first private residential property, and 60 per cent for the second.
Kelvin points out that there is no such cap for commercial properties as long as you meet the bank's loan criteria.
5. There's little your agent can do once the deal is done
You've excitedly moved into your new crib, only to realise that the air-con isn't working and the plumbing is choked. Can your agent negotiate with the seller to pay for the repairs? Sorry, his hands are tied.
Once you put down the one per cent option fee to hold down a private property, you have to accept its condition as it is when you move in - faulty air-con, choked toilet and all.
Get around this by asking your agent to include a final inspection clause in the option-to-buy letter. HDB flat buyers automatically enjoy this safety net.
"There is a final inspection of the property two days before the completion of all HDB transactions. If the air-con is faulty, you can request the seller to repair it," says Kelvin.
What happens if your seller backs out of the sale and refuses to return your deposit?
Marcia shares an example that happened to her friend. During the second appointment at HDB, he learned that the seller had not paid his monthly instalments and Town Council fees for over a year, and the transaction could not be completed.
"Although my friend offered to clear the Town Council arrears, the seller changed his mind and said he'd rather let the HDB repossess his home. He had also spent the $5,000 deposit and blatantly said he was too broke to ?pay back the money," recalls Marcia.
Unfortunately, agents do not have the authority to check on a seller's records with the HDB or the Town Council, which might help to flag such potential high-risk cases. Often, they are as much a victim of the unscrupulous seller as the buyer is.
In this case, both the seller's and buyer's agents could not collect any commission as the sale did not go through.
Your agent's role is purely as a middleman to facilitate the transaction. Once all the paperwork is processed, his job is done.
Having said that, "A responsible property agent must help his buyer look out for all potential risks and not just think of making a quick commission. If your buyer is unhappy, the problem will come back to you," advocates Kelvin.
Whether you hire an agent or not, property investment is an expensive business, so always do your own research. Buyers can check out recently transacted prices of HDB and private properties at www.hdb.gov.sg or ura.gov.sg before setting their budget or selling price.
Visit the unit at different times of the day and observe the neighbourhood. If possible, speak with the neighbours to get a better feel of whether you and your family will fit in. It is also a good chance to find out if your seller has a dubious past.
Be Informed
Still game to go agent-less? Pick up tips at the "Resale Seminar for Buyers and Sellers" organised by the HDB. It costs $25 per person and sessions are conducted in English, Chinese and Malay. The next English session is on September 3 at HDB Hub. Register online at the HDB website, at HDB Hub or any HDB branch office
Monday, September 19, 2011
Home Improvement - The easiest way to grow your home investment a hundred fold - home maintenance
Just as daily exercise and a sensible diet keep your body healthy and help you avoid costly medical bills, regular home maintenance keeps normal wear-and-tear from developing into emergency repairs.
By J.D. Roth
My wife called me in a panic at the beginning of July. I was at a conference in Denver, where the sun was brilliant and blazing. Back home in Portland, however, the sun was nowhere to be found. Instead, it was raining cats and dogs — and much of that rain was leaking through the roof and into our house.
With the help of a neighbor, my wife made some quick, soggy repairs to the roof. It was enough to keep things dry until the rain had passed. Since then, we’ve hired a contractor to make real repairs before the autumn rains return. In the meantime, we’ve been reminded how important it is to perform routine home maintenance.
Your house is like a living, breathing organism. As much as you try to keep things in working order, eventually something goes wrong — and usually at the worst possible time. (My wife and I once woke on Christmas morning to find our water heater had broken, flooding one end of the house. Happy Holidays!)
Just as daily exercise and a sensible diet keep your body healthy and help you avoid costly medical bills, regular home maintenance keeps normal wear-and-tear from developing into emergency repairs. Don’t be lazy or cheap. When it comes to protecting your most valuable possession, cutting corners can be costly.
As a rule of thumb, every year you should set aside about 1% of your home’s purchase price for maintenance and repairs. In other words, if you bought a $300,000 home, budget about $3,000 for annual upkeep. This is just a guideline, obviously — some years you’ll spend much more. (And some lucky years, you won’t spend anything at all!)
If you make a point of doing your own maintenance whenever possible, you’ll save money and develop confidence to tackle similar projects in the future. Home improvement can be intimidating at first, but with time you can learn to do most common household repairs. If you’re interested in improving your DIY skills, take classes from your local community college or attend seminars at a home-improvement store.
Because routine maintenance is so vital, it can be helpful to draft a checklist of annual chores. The previous owner of our home left us customized instructions. If you need general information about where to start, check out the following checklists:
•Healthy Homes Maintenance Checklist [PDF] from National Center for Healthy Housing
•Checklist for Maintaining Your Home [PDF] from the Association of Homeowners Across America
•Big List of Home Maintenance Tasks from alt.home.repair on USENET
In 2004, we bought our current home, the inspector told us that for every dollar we spent on routine maintenance, we’d avoid roughly $100 in future repairs. On his report, he wrote: “I’ve looked at hundreds of homes in all age ranges, and I’ve seen thousands of dollars of damage to homes that could have been avoided by spending $5 to $10 and just a few minutes of work.”
As a frugal fellow, it’s tough for me to accept that it’s not just okay, but good to spend on solving small problems. It’s like self-insurance, or an investment in the future. If you deal with a small problem before it becomes a big problem, you can save yourself time, money, and hassle.
Read more: http://moneyland.time.com/2011/09/19/the-easiest-way-to-grow-your-investment-a-hundred-fold-home-maintenance/#ixzz1YSgN6rKg
By J.D. Roth
My wife called me in a panic at the beginning of July. I was at a conference in Denver, where the sun was brilliant and blazing. Back home in Portland, however, the sun was nowhere to be found. Instead, it was raining cats and dogs — and much of that rain was leaking through the roof and into our house.
With the help of a neighbor, my wife made some quick, soggy repairs to the roof. It was enough to keep things dry until the rain had passed. Since then, we’ve hired a contractor to make real repairs before the autumn rains return. In the meantime, we’ve been reminded how important it is to perform routine home maintenance.
Your house is like a living, breathing organism. As much as you try to keep things in working order, eventually something goes wrong — and usually at the worst possible time. (My wife and I once woke on Christmas morning to find our water heater had broken, flooding one end of the house. Happy Holidays!)
Just as daily exercise and a sensible diet keep your body healthy and help you avoid costly medical bills, regular home maintenance keeps normal wear-and-tear from developing into emergency repairs. Don’t be lazy or cheap. When it comes to protecting your most valuable possession, cutting corners can be costly.
As a rule of thumb, every year you should set aside about 1% of your home’s purchase price for maintenance and repairs. In other words, if you bought a $300,000 home, budget about $3,000 for annual upkeep. This is just a guideline, obviously — some years you’ll spend much more. (And some lucky years, you won’t spend anything at all!)
If you make a point of doing your own maintenance whenever possible, you’ll save money and develop confidence to tackle similar projects in the future. Home improvement can be intimidating at first, but with time you can learn to do most common household repairs. If you’re interested in improving your DIY skills, take classes from your local community college or attend seminars at a home-improvement store.
Because routine maintenance is so vital, it can be helpful to draft a checklist of annual chores. The previous owner of our home left us customized instructions. If you need general information about where to start, check out the following checklists:
•Healthy Homes Maintenance Checklist [PDF] from National Center for Healthy Housing
•Checklist for Maintaining Your Home [PDF] from the Association of Homeowners Across America
•Big List of Home Maintenance Tasks from alt.home.repair on USENET
In 2004, we bought our current home, the inspector told us that for every dollar we spent on routine maintenance, we’d avoid roughly $100 in future repairs. On his report, he wrote: “I’ve looked at hundreds of homes in all age ranges, and I’ve seen thousands of dollars of damage to homes that could have been avoided by spending $5 to $10 and just a few minutes of work.”
As a frugal fellow, it’s tough for me to accept that it’s not just okay, but good to spend on solving small problems. It’s like self-insurance, or an investment in the future. If you deal with a small problem before it becomes a big problem, you can save yourself time, money, and hassle.
Read more: http://moneyland.time.com/2011/09/19/the-easiest-way-to-grow-your-investment-a-hundred-fold-home-maintenance/#ixzz1YSgN6rKg
Wednesday, September 14, 2011
Renewing COE
This is known as the Prevailing quota premium (PQP), a three-month moving average of the cost of COEs which owners must pay in order to drive the car for another 10 years.
You can opt to extend your car for another five years but you cannot extend it after it expires. In fact, you would need to scrap it.
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