What happens during a balloting day at the show flat?
Show flat, huge crowd..What's going on?
Have you ever wondered what actually happens during a balloting day at a show flat? Perhaps, there was once you happened to pass by a show flat and you see a huge crowd gathering inside and outside of the show flat and you asked yourself what is going on and what the fuss is all about?
If you have never been to a show flat during the balloting day, this post will give you some idea what is actually happening. If you missed the mistakes people do when visiting new condo launch show flat and how to optimise your time at the show flat, you should check out the article and return here when you finished.
So, continuing from our last story....
While waiting for Balloting Day
And, finally, you have reached the half-way mark on your journey to getting your own new property. You have given the cheque, submitted the Expression of Interest (EOI) forms and have identified a few potential preferred-choice units to purchase.
As we wait patiently for the balloting day, there is one more thing you need to be familiar with. You need to understand the systems that are being used by developer for buyers to select their preferred unit.
Systems deployed to select your unit
The ballot system requires the developer to draw the ballot numbers from a ballot box. As each numbers are called, the buyers with their ballot numbers announced will proceed to the sales reception area to select their preferred units.
After you submit the EOI form and the cheque during the booking day, the developer will input your information into their system. From there, a ballot number will be generated for each EOI form submitted. The ballot number tag will be given to the buyer on the balloting day or earlier. The buyer is required to drop the tag into the ballot box allocated on the ballot day. This is important because if the tag is not in it, you will not be allowed into the sales area to choose your unit.
Those buyers whose numbers are called early will get the most choices to choose from. For those savvy investors, this would be a great opportunity to buy the cheapest unit available.
In this system, buyers will need to queue in front of the show flat on the launch day. At the designated hour, the doors will be opened and those in the queue will be allowed into the show flat to select and purchase the apartment units on first-come, first-served basis.
If the project is popular and in demand, queues would be formed very early at the show flat, sometimes it could even be a day or two earlier before the launch day.
The first-come-first-served system is rarely deployed now, especially in today's market. It used to be a big thing where huge crowds were formed, causing conflicts and impatience, resulting in fights breaking out among those in queue, and buyers having to pay somebody else to stand in line on their behalf, regardless if rain or shine. It was quite a chaotic scene.
Today, most new launches uses the ballot system for the buyers to select their property. While it is more orderly, if your ballot number is called late, the unit you are eyeing on may not be available by the time it is your turn. This is the disadvantage of the ballot system.
On the launch day, the balloting exercise normally starts around 10am in the morning. You need to be at the show flat early. If you are registered with us, we will collect and submit the ballot numbers on your behalf. Then we wait patiently for your numbers to be called.
At this stage, you should be mentally prepared and you have already identified a few units to choose from. When you have those units already in mind, you are giving yourself the chance to prioritise the selection, in case the units on top of your list are no longer available.
Your list should be based on several factors such as stack, floors, facing, types and price. They should all be within your budget and preference.
Once you are in the sales reception area, you will be in a "pressure-cooker" environment. There will be an elevation chart showing available and sold units. You will be in total suspense mode, looking at the chart constantly to see if your unit is still available. Keeping the pressure aside, your immediate focus is on what is available for sale and compared them to your list. When it is your turn to select, quickly identify the unit to the sales coordinator and the unit will be immediately blocked as sold.
If, upon reaching your turn and you still cannot decide, you will be asked to move to a "thinking box" nearby while you contemplate your selection. In the meantime, those behind you in the queue will move up and they will proceed to select and buy their chosen units.
Once you have decided, you need to quickly inform your agent or the coordinator the unit number. If it is still available, the unit will now belong to you and it will be marked as sold.
However, if none of your preferred units are available, you can withdraw from the selection.The cheque and all the forms submitted earlier shall be returned to you. No penalty incurred.
If your selection is confirmed and marked sold, the developer will proceed to prepare a set of PDI forms. The forms are for you and your co-buyers to sign. These forms are documents related to the project and the unit you purchase. Review them and ask questions if you have any. If all is good, put your initials and signature on all pages and return them back to the developer.
The developer will then generate the Option to Purchase (OTP) and issue them to you. After this point, if you decide to abort the purchase, part of the booking fee will be forfeited.
With the Option to Purchase issued, this completes the ballot day activities.
If you have engaged us to assist you in your purchase, we will be with you every step of the way, guiding you each step and you never have to worry about missing out on any of the important part of the entire process.
What happens after I receive the OTP?
Confirm your financier
With the copy of the Option to Purchase, you can now approach your financier to finalize the loan application and get them to issue the Letter of Offer to you as soon as possible.
Once you confirmed with the bank, the next step is to engage a lawyer who will complete the conveyancing work for you.
After the developer issues the Option to Purchase, they will proceed to prepare the Sales & Purchase (S&P) Agreement. The developer has up to 2 weeks to deliver the S&P to you either personally, via courier service or registered mail.
After you have received the copies of the S&P, you are given 3 weeks from date of receipt to get them signed and to exercise the Option to Purchase. The exercise of the OTP must be done at the lawyer's office.
During the meeting at the lawyer's office, you will also be required to specify how much cash and how much CPF funds will be used to fund the 15% of the initial payment. At the same time, you need to prepare another cheque to pay IRAS for the buyer stamp duty (BSD) and additional buyer stamp duty (ABSD), if any.
Total cheques to prepare
a) Payment for the 15% progressive schedule
b) Buyer Stamp Duty (BSD)
c) Additional Buyer Stamp Duty (ABSD)
d) Agreement stamping fee
e) Legal fee
Completion of Sale
Typical completion period is 8 weeks from the date of Option to Purchase document. Therefore, while the preparation of S&P agreement can be up to 2 weeks, and the exercise period is 3 weeks, the final completion time still needs to be completed by the 8th week from OTP date.
Upon completion of sale, you are basically the new, proud owner of the new property. However, this is still not the end of the story yet. While you may be the new owner, you need to understand your financial obligation, the progress payment and schedule, collection of keys upon TOP and finally moving in to your new home. We shall cover more of these soon. Stay tuned.
Do you have any interesting stories to share when you attended at least one of the balloting exercise? What was your experience and what advise would you share with someone who has not been to one of those events?