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Valuations are meant to be a guide for bank loans

There appears to be a misconception regarding the use of a valuation report for resale flats (“HDB resale rule might shore up prices”; March 15).

There appears to be a misconception regarding the use of a valuation report for resale flats (“HDB resale rule might shore up prices”; March 15).

To quote the Housing and Development Board: “Resale transactions are conducted on a ‘willing-buyer, willing-seller’ basis. The resale price is open to negotiation and mutually agreed upon by buyers and sellers.

“If the resale price you pay for the flat is above the market valuation, the difference has to be paid for in cash.”

This means a buyer and seller can set a transacted price that varies according to market conditions.

A valuation to determine market value is used to guide financial institutions that lend money to buyers, not to fix a base price for negotiation.

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