IN THE letter, 'Why HDB flat's valuation was raised' (ST, Aug 10), Mr Christopher Tang stated that 'valuations are for mortgage loans and withdrawal of CPF funds and are not intended for price negotiations'. I think he missed the point. Valuation is the basis of price negotiation. Buyers will rely on a valuation report to make an offer to the seller. The first question often asked during a viewing session is 'what is the valuation of this flat?'
With the HDB ruling implemented on April 1, 2005, any resale price above valuation would mean the buyer has to pay cash as he can use his CPF only up to the resale price or valuation price, whichever is lower. Hence, buyers are understandably unwilling to offer a price higher than valuation. Consequently, a depressed valuation means the seller would receive a lower offer price.
Of course, there are intrinsic factors like proximity to parents or good schools which may prompt buyers to offer a price above valuation. However, the valuation is the primary factor buyers consider before they make an offer.
Allison Yeo Li Hwa (Ms)
