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  • Aaron Lin Property


After touching on topics like COV for HDB purchases, there have been questions like "how are property valuations done?", "what's the estimated value of certain estates?", "Should I pay COV?" and more. We take this chance to share some information about property valuation that you might not have known about previously.

As property valuation is being done by professionals and accredited valuators, the purpose of the information we share is purely for sharing from an agent's point of view, taking Aaron's personal opinion and experience in dealing with valuation to hopefully help enlighten buyers and sellers in the market!

How Valuation Works?

There are many clients and even agents that ask Aaron about how he determines the value of any property, the answer is that it's an estimate. But the accuracy of this estimate proves to be significant and an accurate estimate comes from using the right tools well and requires experience & knowledge as an agent.

Valuation of property is important mainly for 2 key reasons.

  1. Cash over Valuation (COV)

  2. Bank Valuation for loans

By being able to ascertain the valuation of a property before it's valued by valuators, it's easier for a buyer to judge if there is any COV and whether the property is worth viewing in the first place.

A quick tip about HDB COV from Aaron: Between buying a renovated unit with COV and an unrenovated unit at value, always choose to buy at value. It's preferable to use the money you would pay for COV to pay for your renovations, in the style you like to make the resale unit good as new.

Now, back to our main discussion on valuations.

HDB Valuation

HDB units are valued by HDB upon the intent to sell and option to purchase. When HDB determines that the transacting(selling) price is close to valuation, they would usually not send a valuator down to the unit. There are 3 main scenarios when HDB would send a valuator down to conduct the valuation:

  1. Transacting Price is too high

  2. Transacting Price is too low

  3. There are not enough transactions in the area (usually for 5 year MOP units)

The valuation provided by HDB would then determine the amount of COV that needs to be paid and also, in cases where the transacting price is too low compared to valuation, the stamp duty would be paid based on the valuation price.

Private Valuation

Next, for private valuation, this is usually done by banks when buyers apply for loans. Banks would sometimes provide a website and system to provide the property unit's valuation based on location and unit number. Otherwise, buyers might go to bankers and ask if the bank can match the valuation to the transacting price being agreed upon.

If the property is selling at market price, or a bit higher, 99% of banks will just match valuation to the purchase price. In cases where a property is considered old, then it's tough for the valuation to match purchase price. A private property of 20 years is considered old whereas for HDB the number becomes 30 years. Thus, when selling older units, it's hard to get valuation at purchase price.

In most cases where buyers approach banks to do a letter of offer, bankers pretty much already know if the bank can provide the loan based on purchase price, i.e matching the valuation to the purchase price. Thereafter, a bank sending valuator to the property is, based on Aaron's personal experience, more or less a formality. Aaron has not seen a situation where, after the valuator visits the property, the valuation does not match purchase price.

Working with Banks

There are cases where clients come up with ideas like 'if the bank is able to provide up to 1million valuation, why should we sell at 950k'. Or, 'my bank is only able to provide valuation of 950k, can the price match this valuation instead of asking for 1million'. The idea differs on whether you are a seller or buyer, but the key thing to note is that a valuation does not equate to the property selling price.

Thus, in cases where banks see a difference of 50k in valuation, they usually are open to re-evaluating the difference. On the flip side, a bank valuating at 1million does not mean the unit is able to fetch 1 million in the market. Thus, once again, it's important to understand the differences and have a competent agent that is able to point out all these details accurately.

Valuation platforms vs Aaron

There are also valuation platforms out there, touting computer programs or perhaps even some form of AI calculation programming. They are not used by Aaron as they are not as accurate as he likes. Possible reasons for the lack of accuracy could be that these calculating platforms might not consider things like the floor level of a unit or age of unit in comparison to available units in the area.

For Aaron, it's a mix of a tool that allows for checking on transactions and then the rest is all up to knowledge and experience. The knowledge and experience from more than a decade of hard work in the industry enables an accurate valuating system. Therefore, this system and knowhow can then be tapped on by clients to best serve their needs and interests.


Aaron lays bare all his experience and knowledge regarding valuation in the video below. Look out for the titbits he shares regarding buyers purchasing at value in Punggol and other estates!


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