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I handed over a blank cheque!
By Derek  •  November 6, 2014
I handed over a blank cheque over the weekend to register my 'genunine' interest in a property. I have read that is a common practice during a red hot property cycle but the current market sentiments are anything but 'hot'. However, given that lake life EC is 2 times subscribed there is always a possibility that popular property are still in demand.
Giving someone a blank cheque can be pretty scary. It's like giving someone the keys to my bank account. I am glad that CEA has come up with a set of guidelines to safeguard consumer interest. Full details can be found here under section D.
In the expression of interest, check that the name of the property you are interested in and the agent details are clearly written. While the agency logo is present, the developer details were left out. I think the form varies among agencies and would like to see it being standardized. A photocopied copy should be return to you. The payee name in the cheque is paid to the developer. Leaving this blank or worse putting the agent name is a definite no. I believe the agent can get his license revoke for putting in his name. Record the cheque number issued. I recorded this down in my cheque book and also have the photocopied cheque attach to the expression of interest. Find a agent whom you can trust. This might be a weak safeguard but you cannot hand the cheque directly to the developer - the agent has to do it. Finding a trust worthy agent goes a long way. Read more on finding a property agent here. If you are still a little paranoid like me, there is still one more 'kaisu' safeguard and that is to empty the bank account that the cheque is link to. I do not think that the developer/agent will be able to check. The cheque should not bounce because the developer must wait till I sign the Option to Purchase (OTP). In the event that I do sign the OTP, I must ensure that I have enough time to transfer the funds back in else I may face a penalty. In my case, I have a savings and current account from the same bank. Hence I can transfer funds between the accounts almost instantly. I just have to check that the daily transfer limit is sufficient. Anyone with their own story to share is more than welcome.
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By Derek
Derek is an investor who follows Peter Lynch style of investing. He prefers to use simple and straight forward information for stock analysis. He started TheFinance.sg with the intention to bring together all bloggers and professionals who are interested or already in the area of Finance and Investing, and to create a community where everyone is free to write and to share their articles, experience and opinions.
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2 Comments

2 responses to “I handed over a blank cheque!”

  1. Richard Ng says:

    Congrats! Is it for investment or own residential?

    • Derek Lim says:

      Hi Richard,

      It’s for investment but don’t congratulate me yet. I am working out the monthly payments and I do not think I will be able to afford.

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