Behind the scenes of en bloc sales

Behind the scenes of en bloc sales

KARAMJIT SINGH tells of the colourful and humorous encounters between collective sale owners and property consultants and lawyers

COLLECTIVE sales attract much publicity for the huge gains owners make or stand to make. However, there are equally interesting stories behind the scenes that go untold. They are the colourful experiences and humorous encounters with owners from all walks of life in the course of the exercise.

Below are quotes and narrations of actual encounters experienced by our friends and colleagues from property consultancy and law firms. This is a lighter look at en bloc sales, drafted with the greatest respect to our fraternity's valuable clients - collective sale owners. It has been put together just in the name of sharing a good laugh.

Some details have been modified to protect the identities of the projects and parties concerned. And also to prevent the Jack Neos from having access to a ready-made script for the next local blockbuster. Or should it be en bloc-buster?

We get to meet all of them in this business - from the most creative in justifying why they deserve more money than the rest, to those whose conspiracy theories rival the best brains of the CIA!

Straightforward

'I am not greedy but I should get $600k more than everyone.' (Wonder what he would say if he turned greedy)

Motivator

'We are just $30 million short of the reserve price. Developers better revise their offer and not delay further - prices are going up every day!' (According to your projections, sir, we would need a capital growth rate of only 560 per cent per annum)

Flatterer

'How can so low? You're the property expert, surely you can increase it.' - An owner, in response to the consultant's recommendation of the reserve price. (Of course he can; he's not signing the cheque!)

Resourceful

Owners who wanted to sell were so unhappy with owners who had not signed because of their existing tenancies that someone 'nailed' planks over the door of the unit to prevent the tenants from coming home! (Talk about hitting it on the nail! Once and for all, nailing the problem - hmm ... now we know why the consultants parked their cars a mile away from this estate.)

Justifying

An old man, on why he was refusing to sign the collective sale agreement. Owner: When I sell, I would need another home. Lawyer: Fair enough. Owner: It needs to have at least five bedrooms to accommodate my family. Lawyer: Okay (very caring father) Owner: I definitely cannot buy a semi-detached - too expensive nowadays. Lawyer: Hmm ... (reasonable and well-informed) Owner: Hence, I'll settle for a terrace house with five rooms. Lawyer: Er ... okay. Owner: And I would need to renovate - and I want some cash in hand, not much, just about half a million, for my retirement. If you can arrange for all this from the sale, I'll sell. If not, what's the point of selling? I'm better off staying put. (The owner had a 1,200 sq ft three-bedroom unit in a 45-year-old development that was worth $550,000 before the collective sale. It eventually fetched $850,000 in the en bloc sale.)

Poetic

A sales committee (SC) member, on being told of the market's poor response to the tender: 'Is (the development) such a tough boy to be liked? It has to remain as unwanted child, even though so juicy now. (Gulp! Sounds like Hannibal!) Why is it that a parent in the making is procrastinating its adoption at this best of time opportunity? (Turning from Hannibal to Brave Heart) I will lead to explain to all owners to bear with us - and re-coup the sale amount twice over. The SC then will be having an easy job like eating tahu (phew, as long as it has got nothing to do with kids!) and no need to write countless artful messages any more. Just say a few words, and money will simply roll in as we drum-roll up. Double in two years, this is an achievable number and by then the unwanted kid will be hugged, praised in all kinds beyond description.'

Two-love ad-vantage

A lady, who had sold the apartment she jointly owned with her husband in an en bloc sale, had a shock when she read the newspaper one day. In the paper was the advertisement required for the application to STB listing all the owners' names. No, it wasn't that she was getting less money than she thought. Against another unit in her estate was none other than her husband's name, along with the name of another lady, as joint owners!

It was only then that she realised why her husband had been an avid jogger and had 'faithfully' been taking the same jogging route every day - the path that led to his mistress! To make matters worse, she later found out that she was among the minority in the estate who was not not aware of his antics while the majority - well, let's just say - had caught his love triangle performance.

There was another owner who was, perhaps, more forthright with his problem when asked why he wasn't selling when his gains were more than 100 per cent.

'The property is occupied by my mistress. If the en bloc is successful then I have to buy a new property in my mistress' name.' (Needless to say, he stressed to the consultant to keep the information to himself.)

Expert layman

SC member responding to feedback from the consultant that developers found their site, which is located immediately next to the PIE, rather noisy.

'I am no expert in noise control but my common sense, logical thinking and gut feel tell me this: (a) The traffic on the PIE is only a concern during peak hours, from, say, 6.30am to 7.30pm on week days. It is as quiet as Queen Astrid Park off peak hours (Good point! Very quiet at between 2am and 5am). What's more, during those peak noise hours, owners are at work. Where is the concern? Our development is not a holiday resort, anyway! (b) Even if during the peak hours, there is only a humming traffic noise as the background noise, which is in low decibels according to sound experts. (Somehow we get a strange feeling you are referring to yourself?) (c) If there is a noise factor we have to admit there exists, since we are located next to the PIE (this is getting confusing - so is it noisy or not?) To me, this is a plus, not a negative, as it is so conveniently located.

Getting principles right(ly priced)

Consultants get this very often - when asking why the owner is not selling.

'How to find another property that is so convenient like ours? Everything so nearby - my children's school, my workplace (only 10 km away), my wife's office, my mother-in-law (impressive!). With this money, my family would have no roof over our heads. We would have to downgrade. I need to object for my kids' sake. I owe it to them. One day, they would question me. And I would have failed them. The principle is also not right. Why should I be forced to sell when my neighbours selfishly want to make money?

'Well, if you can arrange for only $100,000 more, I will sign.'

True attachment

In a high-profile project close to Orchard Road, the lawyers wrote to the owners, following a sale, that the fixtures cannot be removed from their apartments. On completion of the sale, the lawyer was bowled over when he discovered that an owner had removed the bathtubs and even toilet bowls! (I suppose it's difficult to give up one's 'pot' of gold).

In another case, an owner refused to sign the collective sale agreement unless she was assured she could take along with her every piece of her imported kitchen.

Instant service

Immediately upon signing the collective sale agreement, the owner asked the consultant for his cheque. 'Cheque? What cheque?' asked the consultant. He wanted his sale proceeds immediately! He thought the consultant was the buyer, and was buying out every owner one by one. When explained that it didn't work that way, and she was merely helping them secure a buyer, he insisted on withdrawing his signature labelling her a 'CONsultant'. The poor professional tried her best to regain his CONfidence by assuring him she would work hard to get them a good price. He finally CONceded and CONsented.

Lastly

Six of the owners in a development each wanted to be the last to sign the collective sale agreement. No reason was given; they simply insisted on not signing if they were not the last. The lawyer came up with a brilliant idea - arranged for all six of them to meet and sign together, so that they can all share the accolade of being 'last in class'. When the 'ceremony' was supposed to begin, they couldn't agree who among the last would sign first. As a result, they all walked away without signing!

The writer is managing director of Credo Real Estate, a property consultancy firm specialising in collective sales. Acknowledgement: We wish to put on record our appreciation to our friends from DTZ Debenham Tie Leung, Knight Frank, Rodyk & Davidson and Lee & Lee for their contributions of their experiences that enabled us to put together the above article.