It has finally come true – your housing estate has been pinpointed as “The-One” by a developer, who is going to take it out of your hands in return for a handsome sum of money.
It may be your golden ticket to that dream home you have always wanted or the final push you needed to invest in a new home.
However, before you lose yourself to celebrations and start shopping for a new home, there are some preparations that you need to make for the celebration to be all the more sweeter.
Forgetting to do any of these may potentially lead to disasters on your finances and resources that we all want to avoid.
Have a place to keep your belongings
You may have chosen the perfect new home to live in, but the keys may not be ready in time for hand-over to you.
In some cases, you will have to vacate your old house and hand it over to the developers before you can move into your new house.
For instance, if you are buying a new house that is still in the process of renovation, the renovation process may take longer than expected.
In these situations, you probably need a storage option to keep all your belongings! You may be trading in your old house for a new one, but you may want to bring some of your possessions such as electronics and furniture along.
Do a quick Google Search, and you will find several renting storage facilities in Singapore. Some self-storage services include LOCK+STORE, Extra Space Self-Storage, Storhub, and Storeroom Self Storage.
You may want to check how flexible their plans are, and the different storage unit sizes that they offer to best suit your needs! For instance, some storage services have cubicles ranging from 12 sq ft to 114 sq ft, depending on your needs.
Also check out which storage service has storage facilities in the most convenient and accessible location from both your old house and your new home.
Check your finances – Make sure you have sufficient cash
It is important that you have enough cash to tide yourself over before proceeds from the collective sales of your housing development comes in.
Your sale proceeds will not come immediately after the en-bloc is confirmed, and may even take a year to come in depending on the size and complexity of the en-bloc.
One thing is to take note of upfront payments that you have to make in cash.
For instance, ensure that you are able to pay the five percent cash down-payment if you are buying a new private property. If not, do some research on banks that provide bridging loans for clients whose houses has gone under en-bloc.
Depending on the package that you sign up for, bridging loans can cover you for up to 6 months.
To be safe, try to set a target for yourself where you put aside around six months of your savings. Thus, if any emergencies happen before your sales proceeds before arrive, you will not have to resort to taking personal or credit card loans.
Home owners whose houses have been sold under collective sale may be looking for a new home in the same area as their old home.
They may already have an attachment to the place, with their families or friends living in the same area. Your old home may also be near to where you work, or even near your children’s schools.
If you are one of them, don’t forget that your neighbours who have also been affected by en-bloc may want new homes in a familiar area as well!
You should be prepared to act fast before all the available units in the vicinity gets snapped up by other home-buyers who have their en-bloc proceeds on hand as well.
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In en-bloc sales, previous owners of the flat may be given a rent-free stay of 3 to 6 months before handing over the unit. This however has to be negotiated and may vary for different en-blocs.
If you are having a hard time deciding on a new home and your old home has already been handed over to the developers, you have need to look for interim housing.
If you do decide to get interim housing, renting an empty unit is an alternative to finding storage facilities as you may be able to bring some belongings with you.
However, as the minimum rental period is usually 6 months, you would have to think twice whether renting a unit is the best solution for you and your family.
Budget enough for the renovation of your new home
If you have a certain design in mind for your house, start budgeting early!
Should you need to take up a renovation loan, check out whether you are eligible for these loans, and which package you can take up at the right expense. You may also need to estimate the loan quantum you need with advice from an interior design firm.
Usually, renovation loans have a maximum loan quantum of $30,000 or 6 months of your income. Most people tend to spend more than that amount when renovating. Depending on your design requirements and the size of your flat, start planning your finances to renovate your new home.
After all is done, it is finally time for you to settle down and enjoy your new space.
Congratulations – your collective sale jackpot story is now one that can be told for generations to come!
This post was first published on Redbrick Mortgage Advisory.