More Properties Are Heading to Auction, but Do Not Expect Dirt-Cheap Buys: What to Check Before You Bid

The September auctions of high-end properties seized in the S$3 billion money laundering case drew genuine buyers, owners of nearby developments wanting a feel for the market, and curious bystanders. Only four condominiums, two each at Martin Modern and Wallich Residence, found buyers at the SRI auction on 23 September. The other lots were withdrawn because they missed their reserve prices or drew no bids, and separate auctions held by Edmund Tie and Company (ETC) and Knight Frank ended without sales for the same reason. (This article cites 25 properties in the September auctions, while The Straits Times’ report on 8 October cited 26.)

The reserve price is the minimum the seller has authorised and is usually confidential. It should not be assumed to be the same as the advertised guide price or opening bid. If bidding does not reach it, the property generally stays unsold.

Because mortgagee or bank sales make up a large share of auction listings, auctions are often associated with bargains. Tan Tee Khoon, head of auction and sales at Knight Frank Singapore, said buyers should not assume that a property sold by a bank, an estate, a company or the authorities will be cheap. Even in a mortgagee sale, the lender has a duty to act in good faith and take reasonable care to obtain a proper market price, and recovering the loan does not by itself justify accepting any price. A guide price takes into account recent comparable transactions, market conditions, the property’s location, tenure and condition, and the seller’s instructions, and in some cases valuations. His advice is to judge a potential bargain against recent comparable deals and the total cost of ownership, because a big reduction from the asking price does not automatically make a property good value.

Nicholas Mak, chief research officer of Mogul.sg, said buyers should view the unit before the auction, as they would for any resale, and check its condition, wear and tear, and repairs needed. ST gave an illustration: a S$2 million property bought at S$1.9 million looks like a S$100,000 saving, but unexpected defects costing S$50,000 on top of budgeted renovations can erase the discount. The buffer matters most in “as-is, where-is” sales without viewings, where buyers assess the property from available information and the surrounding area, and can be left responsible for defects, clearance or rectification work.

The type of sale also matters. An owner sale may simply reflect a preference for auction, while a mortgagee sale involves a lender selling a repossessed property and buyers should check the lender’s authority and the contract protections. Distressed sale labels do not identify who is legally selling. Some sales are involuntary, such as government-enforced or court-ordered sales, including the properties from the money laundering case, which police handed to Deloitte for liquidation in August 2025, with proceeds going to the Government’s consolidated fund.

In every auction the biggest risk is what you cannot see: defects, illegal structures, tenancy problems, ownership issues, restrictions or unpaid bills. Reading the auction documents is essential, a buyer unfamiliar with transactions should consider a conveyancing lawyer to review them before bidding, and where the property’s condition is uncertain a professional inspection can be money well spent.

Know your financing capacity before choosing a property. An approval in principle is not an unconditional guarantee that the bank will fund the purchase, and a bank’s willingness to lend is not the same as your ability to comfortably afford the home. For a Singaporean buyer, affordability should include cash and CPF requirements, stamp duties, legal fees, renovation and running costs as well as the mortgage, and should be tested against higher interest rates. If a rate rise would force you to cut essential spending, drain your emergency fund or rely on a bonus, the property is probably too expensive.

Alfred Chia, chief executive of SingCapital, said that for a typical private home resale buyers pay a 1 per cent option fee and 4 per cent on exercising the option. At auction the immediate deposit is usually 5 or 10 per cent of the winning bid, depending on the conditions of sale, and completion is typically set at eight to 12 weeks by the contract, not negotiated, which can pressure buyers who must sell another property first. Confirm the deposit, completion deadline and when your loan and CPF funds can be released before bidding.

Also confirm in writing any buyer’s premium, administration charge or buyer-agent fee, which is on top of the bid. Buyer’s stamp duty and additional buyer’s stamp duty are generally based on the higher of the price or market value, so a lower auction price does not necessarily cut the tax. Late completion can attract interest, and failure to complete could cost the deposit and further claims, so the potential loss can exceed the deposit.

The upcoming sales of properties forfeited in the money laundering case will draw headlines, curiosity and competition, but their history does not make them bargains or undesirable. Buyers should assess market value, sale conditions, ownership costs and financing as they would for any other property. The article’s summary: buy the property, not the story.