Finding an apartment

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Kerry65
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Finding an apartment

Post by Kerry65 » Mon, 11 Jul 2016 8:34 am

We have been here for 2 weeks and have found an apartment we like. We have found the negotiation process a little disturbing with the agent. She is asking for 1 months rent in cash to Make formal offer to the landlord. Is this the normal process. We have not got our passes yet so haven't been able to open a bank account and our money is still in our Aust bank account. Can someone please give me some insight as to the normal procedure here. Thank you kindly

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Re: RE: Finding an apartment

Post by pampaganda » Mon, 11 Jul 2016 9:15 am

Kerry65 wrote:We have been here for 2 weeks and have found an apartment we like. We have found the negotiation process a little disturbing with the agent. She is asking for 1 months rent in cash to Make formal offer to the landlord. Is this the normal process. We have not got our passes yet so haven't been able to open a bank account and our money is still in our Aust bank account. Can someone please give me some insight as to the normal procedure here. Thank you kindly
Yes. If you got your apartment thru an agent then you need to pay the agent's commission. It is usually 0.5mos rent for every year of contract. If your contract is 2yrs, you need to pay him/her commission equivalent to a month's rent. Good luck!

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Re: Finding an apartment

Post by Kerry65 » Mon, 11 Jul 2016 9:24 am

Hi thanks for reply. We have also been told that if we sign a lease for 2 years then the landlord pays the commission. Our agent is not asking for commission but rather money upfront to put aformal offer? I was wanting to negotiate price before paying any money?

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Re: Finding an apartment

Post by pampaganda » Mon, 11 Jul 2016 9:45 am

I see. If the landlord pays the commission then the upfront payment seems dodgy, unless it is the 1month advance deposit payment to the landlord. I remember paying 1mo advance to secure the flat and for them to take down the listing.

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Re: Finding an apartment

Post by x9200 » Mon, 11 Jul 2016 12:16 pm

Kerry65 wrote:We have been here for 2 weeks and have found an apartment we like. We have found the negotiation process a little disturbing with the agent. She is asking for 1 months rent in cash to Make formal offer to the landlord. Is this the normal process. We have not got our passes yet so haven't been able to open a bank account and our money is still in our Aust bank account. Can someone please give me some insight as to the normal procedure here. Thank you kindly
Whether I would call it "normal" is a different story, but the standard practice from my rather extensive experience is like this:

If you like the place, you negotiate first the deal.

Once you agree on the critical parts (the rent, anything to be done, replaced fixed, painted etc.) you sign a Letter of Intent (LoI). LoI should cover all the critical parts agreed during the negotiations.

Together with signing the LoI, as the local ritual requires you pay so called Good Faith Deposit (1 month rent equivalent). I have never paid it in cash. It was always paid as a cheque and in principle this cheque should not be cashed by the LL before you enter the actual Tenancy Agreement (TA).

You are likely going to be told differently by the agents and the LL, but LoI has no legal binding power (with a few specific exceptions), so even after signing the LoI you are free to walk away - LoI is a memorandum to list the critical points of the future agreement to be later included to the TA.

But once you agree and sign the TA, the LL will cash the cheque and count it as a part of the rent or security deposit.

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Re: Finding an apartment

Post by Kerry65 » Mon, 11 Jul 2016 12:26 pm

our agent is asking us to give her one months rent and sign a letter of offer??? Not sure it is actually. Letter of intent???

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Re: Finding an apartment

Post by SingBing » Mon, 11 Jul 2016 1:42 pm

Do you have a corporate landlord? That might explain the LOO approach.

Have you got any other means of paying the good faith deposit if you have no local bank accounts? But in any case the LOO will state the agreed monthly rent so it sounds like you're not quite at the stage where you'd want to sign it

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Re: Finding an apartment

Post by JR8 » Mon, 11 Jul 2016 1:58 pm

Agree with X9 ^.
I've never heard of a 'Letter of offer'; giving an offer verbally, or by SMS/E-mail etc is what I'm used to [pref: e-mail or in writing so I have a hard-copy record].
I think you need to have the agent send you a pro-forma/draft of what exactly it is they're asking you to sign.
And I wouldn't sign up for anything until your work passes are approved. Oh to be on a tourist/SVP status and have signed up for a 2-year lease only to get declined EP/residency status.
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Re: Finding an apartment

Post by x9200 » Mon, 11 Jul 2016 4:09 pm

A requirement to pay something in cash is already rising red flags. I would not do it. It may indicate either the LL or the agent are desperate for money to cover their current expenses. This is never a healthy situation.
And don't sign anything called a letter of offer. I am not exactly sure what would be the legal status of something like this. Depending what will be inside, you may have problems to break free from something like this.

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Re: Finding an apartment

Post by BBCWatcher » Mon, 11 Jul 2016 6:49 pm

To follow-up on the recommendation upthread to avoid cash and to favor a paper check (held but not cashed with a LOI/LOO), you can buy the first month's rent (or rent equivalent) in the form of a paper check. That's called a "cashier's order" in Singapore. If you cannot use cash to buy a cashier's order in Singapore (even from Raffles Arcade, for example) then buy an "international draft" from your bank in Australia (in Singapore dollars, of course). Or (possibly) ask your employer in Singapore if they'll issue a check in exchange for consideration (cash, deduction from paycheck, or whatever).

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Re: Finding an apartment

Post by east41st » Tue, 12 Jul 2016 10:34 pm

JR8 wrote:Agree with X9 ^.
I've never heard of a 'Letter of offer'; giving an offer verbally, or by SMS/E-mail etc is what I'm used to [pref: e-mail or in writing so I have a hard-copy record].
I think you need to have the agent send you a pro-forma/draft of what exactly it is they're asking you to sign.
And I wouldn't sign up for anything until your work passes are approved. Oh to be on a tourist/SVP status and have signed up for a 2-year lease only to get declined EP/residency status.

LOI, or Letter of Intent, is a common document during the process of securing a tenancy deal. It is to protect the tenant's interest and serves as proof of the 'good faith deposit'.

Typically the tenant makes an offer to the landlord. This offer can be verbal or a simple sms. Once the landlord accepts the offer, the next step is for the tenant (via agent) to pass a 'good faith deposit' (one month's rent) to landlord, usually a cheque. Along with the deposit is the LOI for the landlord to sign off. A copy of the signed LOI is returned to the tenant. This is "receipt" or proof of landlord having possession of the good faith deposit. This means landlord having taken the deposit is now bound to the deal and cannot back out from it.

Take a picture of the cheque before you hand it to the agent. Do not hand over cheque or cash if the agent does not have a LOI for the tenant to sign.

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Re: Finding an apartment

Post by Strong Eagle » Tue, 12 Jul 2016 11:14 pm

east41st wrote:LOI, or Letter of Intent, is a common document during the process of securing a tenancy deal. It is to protect the tenant's interest and serves as proof of the 'good faith deposit'.

Typically the tenant makes an offer to the landlord. This offer can be verbal or a simple sms. Once the landlord accepts the offer, the next step is for the tenant (via agent) to pass a 'good faith deposit' (one month's rent) to landlord, usually a cheque. Along with the deposit is the LOI for the landlord to sign off. A copy of the signed LOI is returned to the tenant. This is "receipt" or proof of landlord having possession of the good faith deposit. This means landlord having taken the deposit is now bound to the deal and cannot back out from it.

Take a picture of the cheque before you hand it to the agent. Do not hand over cheque or cash if the agent does not have a LOI for the tenant to sign.
This is the kind of screw job you can expect in Singapore. The LL wants you to sign a LOI and give him money as your sign of "good faith" while he reserves the right to choose a different tenant, raise the price, change the terms... whatever.

I have never provided a deposit with a LOI and I never would. By the LOI I have indicated my interest and intent and that I agree to the terms of the lease. When the LL also agrees to the terms by the signing of the tenancy agreement is the point at which I would provide funds. Never before... you're asking to get screwed by an unscrupulous landlord... there are plenty of horror stories on these boards... and the above looks like it was written by an agent.

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Re: Finding an apartment

Post by JR8 » Tue, 12 Jul 2016 11:50 pm

Agreed. In SG you'd ask - 'Why would I sign an '''LOI''' and pay money when I haven't even seen the terms of the likely mom+pop written-at-home tenancy agreement: It could say anything!?'

In the UK the position would be - you wouldn't be asked to sign one anyway, as you can't be bound to a contract you haven't seen, and haven't had a reasonable time to consider, and if you feel it necessary take legal advice about ['cooling-off periods' etc].
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Re: Finding an apartment

Post by east41st » Tue, 12 Jul 2016 11:57 pm

Strong Eagle wrote:
east41st wrote:LOI, or Letter of Intent, is a common document during the process of securing a tenancy deal. It is to protect the tenant's interest and serves as proof of the 'good faith deposit'.

Typically the tenant makes an offer to the landlord. This offer can be verbal or a simple sms. Once the landlord accepts the offer, the next step is for the tenant (via agent) to pass a 'good faith deposit' (one month's rent) to landlord, usually a cheque. Along with the deposit is the LOI for the landlord to sign off. A copy of the signed LOI is returned to the tenant. This is "receipt" or proof of landlord having possession of the good faith deposit. This means landlord having taken the deposit is now bound to the deal and cannot back out from it.

Take a picture of the cheque before you hand it to the agent. Do not hand over cheque or cash if the agent does not have a LOI for the tenant to sign.
This is the kind of screw job you can expect in Singapore. The LL wants you to sign a LOI and give him money as your sign of "good faith" while he reserves the right to choose a different tenant, raise the price, change the terms... whatever.

I have never provided a deposit with a LOI and I never would. By the LOI I have indicated my interest and intent and that I agree to the terms of the lease. When the LL also agrees to the terms by the signing of the tenancy agreement is the point at which I would provide funds. Never before... you're asking to get screwed by an unscrupulous landlord... there are plenty of horror stories on these boards... and the above looks like it was written by an agent.
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Last edited by east41st on Wed, 13 Jul 2016 12:04 am, edited 1 time in total.

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Re: Finding an apartment

Post by east41st » Tue, 12 Jul 2016 11:58 pm

east41st wrote:
Strong Eagle wrote:
east41st wrote:LOI, or Letter of Intent, is a common document during the process of securing a tenancy deal. It is to protect the tenant's interest and serves as proof of the 'good faith deposit'.

Typically the tenant makes an offer to the landlord. This offer can be verbal or a simple sms. Once the landlord accepts the offer, the next step is for the tenant (via agent) to pass a 'good faith deposit' (one month's rent) to landlord, usually a cheque. Along with the deposit is the LOI for the landlord to sign off. A copy of the signed LOI is returned to the tenant. This is "receipt" or proof of landlord having possession of the good faith deposit. This means landlord having taken the deposit is now bound to the deal and cannot back out from it.

Take a picture of the cheque before you hand it to the agent. Do not hand over cheque or cash if the agent does not have a LOI for the tenant to sign.
This is the kind of screw job you can expect in Singapore. The LL wants you to sign a LOI and give him money as your sign of "good faith" while he reserves the right to choose a different tenant, raise the price, change the terms... whatever.

I have never provided a deposit with a LOI and I never would. By the LOI I have indicated my interest and intent and that I agree to the terms of the lease. When the LL also agrees to the terms by the signing of the tenancy agreement is the point at which I would provide funds. Never before... you're asking to get screwed by an unscrupulous landlord... there are plenty of horror stories on these boards... and the above looks like it was written by an agent.
There is no need for LOI if the parties can go immediately to signing the TA. The LOI is just a prelude to the TA. It happens when the tenant wishes to secure the unit today but the unit is only available to move in say 2 weeks later when the TA will be signed. So something is required to bind both tenant and LL to the deal during this two weeks before signing the TA. Can't expect LL to hold the deal for tenant without LOI or TA.

Going straight to signing the TA is fine. But I as a tenant would be more careful, especially if actual taking over of the apartment is at a later date. :-?

I am writing as a landlord, not agent. :D I am more than happy if a tenant wants to go straight to signing of TA without me having to handover my unit at the same time. But I am saying it is risky for the tenant.

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