There is no denying that the en bloc property market is booming this year. In Q1 this year, there have already been 15 properties sold on en bloc, and this real estate trend does not look to be slowing down. With that in mind, read on for our collective sale guide.
Starting an en bloc attempt
To begin, you will need to have a general meeting including all owners whereby a Collective Sale Committee is elected. For the general meeting, the requisition requires owners compromising of 25 percent of the total number of owners or at least 20 percent of the total share value. For the collective sale to be a success, locating the correct committee members is imperative. The members will be responsible for getting approval from the requisite majority, as well as this, they must choose a property lawyer and consultant, and drafting part of the CSA / Collective Sales Agreement in the form of the suggested reserve price.
Knowing whether your condo has en bloc potential
Although a lot of people believe it to be the case, a property’s location or tenure is not the be all and end all. To determine whether your property has en bloc potential, there are a number of other factors to consider, including plot value enhancements, number of units, and the property’s age.
Consider a bridging loan
There are many different financial options to consider when investing in property, and one of these is a bridging loan. This is a type of short-term financial option, which is very popular with en bloc owners specifically. This kind of loan can be taken out for a period of three years or less, and there is then a pending agreement for longer-term or larger financing. This means that the loan can be extended, so your costs are covered while buying a new home, until you receive the proceeds from your house sale. It is a great way to ensure you are not out of the pocket during the transaction.
When will you get your money?
If the collective sale is successful, you will get your money within three to six months in most cases. However, do note that if approval from the Courts or the Strata Titles Board are needed, it can take longer. What happens if there are no bids for your en bloc property? There are a number of sites that have closed their site because there have not been any bids. There are a number of different options that are available to you. This includes entering a PT negotiation, otherwise known as private treaty, with parties that are interested.
Of course, every en bloc is different. However, you should expect the process to take around one year – sometimes two. With that in mind, you do need to consider that demand and supply could have changed with this time frame.
Hopefully, you now have a better understanding regarding the booming en bloc market, as well as knowledge of how you can get involved with this popular property investment.