Buying & Selling Tips
Tips on buying your property:
Tips on selling your property:
If you have any queries in mind, feel free to send me the question by clicking here.
Buying versus renting?
Consider the pros and cons of each and whether your motivation to buy matches the lifestyle you have or want to have.
Why buy?
There seems to be an inherent desire in most of us to eventually ‘nest’ and make our home somewhere. This usually means that buying a home is more desirable than renting and brings a sense of satisfaction and security that cannot be matched. Unfortunately, the rapid increase of values in the property market in recent years has pushed home ownership out of reach for some would-be first time buyers. However affordability does not necessarily equate with having a high income. Home ownership is a long-term goal, and requires planning, tight budgeting and saving strategies. Not everyone is willing to make the types of sacrifices this can sometimes require so it helps to consider some of the pros and cons of buying in order to examine your own priorities.
Advantages:
Security: Owning your own home brings a sense of satisfaction, security and stability. There are no lease conditions to worry about and you are no longer subject to the whims of a landlord who has control over the length of your tenancy and the cost of rent.
Investment: As long as your home is appreciating or maintaining value, you are growing equity (ownership) in your home. This equity can be later used to secure further loans and will also provide security in retirement.
Savings strategy:
In a sense, making repayments is like a type of forced savings strategy. The more you pay off, the more of your home you will own. Furthermore, once you have paid off your mortgage, you will free up a large portion of your income which will lighten your financial responsibilities.
Lifestyle:
Choosing the style and type of home for your lifestyle (or changing it to fit) is a huge incentive for many people to become home owners. In rented premises, time, money and effort spent on decoration and gardening will not return to you beyond the length of your lease and in most cases, the landlord will be very particular about any modifications you make in the first place. Owning your own home not only provides the freedom to change and improve your house as you like, but the process can become a productive hobby which may increase the value of your property at the same time.
Tax incentives:
If you purchase a property for investment purposes, the interest on your mortgage payments is tax deductible. Likewise, an investor who lets their property to tenants can take advantage of the tax benefits of negative gearing.
Status: The status of being a home owner is not only satisfying inwardly, but it provides other benefits from a financial viewpoint. As you make regular mortgage payments, you will establish a favourable credit rating with financial institutions which may be useful for future borrowing.
Disadvantages:
Struggle to save deposit: Depending on the market you are hoping to buy in, getting a deposit together can take several years of saving every spare cent of your income and changing your view of ‘essential’ spending quite severely. It can mean a lot more than taking cheap holidays, cutting out take-aways or limiting going to the restaurant. Buying in bulk, taking lunch to work, getting rid of credit cards and forgoing expensive outings might be just the beginning, not to mention switching to public transport if you have a second car or giving up expensive habits.
High Costs:
Home-ownership can be more expensive than renting because you are responsible for the maintenance and repairs of the property, insurance, paying council rates, plus any improvements you want to make. If you have a large mortgage you may find more than half of your income going into repayments – a huge financial commitment.
Price Depreciation: There is a risk in any investment that its value will depreciate. If this happens to your property you stand to make a loss in the event you decide to sell.
Interest rates:
If your mortgage is subject to a rise in interest rates, you may struggle to continue making your repayments if interest rates increase. While renters can also face rent increases, it is possible to negotiate this with your landlord – or otherwise move.
New Launch or Resale Condo?
To many of us, getting a new home is never an easy task and requires lots of planning and serious consideration. Other than the common questions such as getting a Leasehold or Freehold condo, another concern will be whether to get a brand New Condo or Resale Private Home. The table below is a brief summary on the pros and cons of getting a new or resale home.
Foreigners Buying
The Residential Property Act of Singapore states that a foreign person cannot acquire or purchase restricted residential property unless he obtains prior approval. Such property includes:
(a) vacant residential land;
(b) landed property [i.e detached house, semi-detached house, terrace house (including linked house or townhouse)]; and
(c) landed property in strata developments which are not approved condominium developments under the Planning Act.
A foreign person is defined under the Residential Property Act to be:
(a) any person who is not a citizen,
(b) any permanent resident,
(c) any foreign company or any converted foreign company,
(d) any foreign society or converted society.
Hence, even a permanent resident is categorised as a foreigner unlike in the case of purchasing a Housing and Development Board (HDB) flat, whereby a permanent resident could be the applicant or the authorised occupant of the said flat. However, it does not necessarily mean that all foreigners are restricted from purchasing restricted residential properties in Singapore. A foreign person can still buy resticted residential property caught under the Act if he/she had obtained explicit approval from:
Land Dealings (Approval) Unit
Singapore Land Authority
8 Shenton Way
#27-02
Singapore 068811
The approval will be looked upon favourably if:
(a) the individual is a permanent resident
(b) an individual who can provide economic benefits to Singapore or makes adequate contribution in Singapore; and
(c) one who possesses professional or other qualifications or experience which are of benefits or advantageous to Singapore.
Any foreigners who attained ownership of residential properties in Singapore prior to the commencement of the Act in 1973 can have the right to retain it. In the event the said foreigners are desirous to sell their properties, it shall have to be sold only to any Singapore citizen or approved purchasers as stipulated by the Act.
Foreigners who are interested in purchasing restricted residential properties but have yet to attain explicit approval from the Land Dealings (Approval) Unit, the real estate agent can still have the foreigners to commit in the sale and purchase of the property concerned by spelling out clearly in the Option To Purchase documents by the insertion of a clause, i.e. “the intended purchase of the above mentioned property by the intending Purchases, namely one ___________ is subject to explicit approval from the Land Dealings (Approval) Unit, Controller of Residential Property, as stipulated by the governing Residential Property Act. In the event the approval is not validly obtained, it is hereby understood that the owners shall refund all monies without interests accrued to the said intending Purchaser and thereafter neither party shall have any claims, demands, proceedings, costs, expenses whatsoever against each other as pertaining to the said cancellation of intending sale and purchase of the said property concerned”.
Foreigners can acquire or purchase in Singapore the following residential properties without a written approval:
(a) An apartment in a building
(b) A unit in an approved condominium development.
(c) Any non-residential, commercial or industrial property.
Note: A foreign person is not allowed to acquire all the apartments within a building or all the units in an approved condominium development without the prior approval of the Minister for Law.
For restricted residential property such as vacant land, landed properties such as bungalows, semi-detached, terrace houses, townhouses and strata landed property, foreigners need to apply for approval from Land Dealings (Approval) Unit, Singapore Land Authority before buying. For more details on application, visit the Singapore Land Authority website.
For HDB flats, HDB shop-houses and executive condominiums, eligibility is subjected to the Housing and Development Board.
To buy a flat directly from HDB, you must be a Singapore citizen, must include another Singapore citizen or Singapore permanent resident to form a family nucleus. To buy a flat from the resale market, you must be a Singapore citizen or Singapore permanent resident. Include at least one listed occupier who is a Singapore permanent resident or Singapore citizen.
Are there any restrictions on home loans for foreigners?
Foreigners and permanent residents can borrow loans up to 70% – 80% of the purchase price of the property subjected to different banks criteria. Non-Singapore companies cannot be granted Singapore dollar loans to purchase residential properties.
What conditions must I fulfill if I am a Permanent Resident getting a home loan?
To obtain a Singapore dollar loan, you have to provide a written understanding that you do not have outstanding housing loans from any other financial institutions in Singapore.
Plan before you buy
Set your sights on the long term by being realistic in the immediate term. Look at what you can afford and make some compromises on what you want to get off to a sound financial start.
Compromise – Needs and wants
For those who do desire to become home owners, images of coming back to a welcoming home after a day at work, spending time with the family within the sanctity of its walls and pottering in the garden bring feelings of security and happiness. However, it can be tempting to want it all now, and with that desire comes the danger of over borrowing and getting into more debt than you can comfortably repay. It therefore pays to consider what your needs really are and what you would be willing to live without. For example, if you are part of a couple with no children and no need to work from home, could you live without a third bedroom and large garden? On the other hand, if you have a young family would you consider moving to an outer suburb for the extra space it would afford rather increasing an existing mortgage in order to maintain an inner city address? Make a list of the factors that are most important to you, taking into consideration the length of time you intend to live in the house and changes (such as starting a family) to your future circumstances. Making these choices will mean compromising on some things, but you will be better off making sacrifices now rather than struggling to make repayments later or finding there is no extra cash to take care of repairs or much needed renovations.
Setting a budget
Once you have decided on the type of home you need, it is helpful to set a budget. While the amount you can borrow will be limited by your earning capacity, assets and existing debts, lifestyle expenses and so on, do not make the mistake of using this amount as a price guide for your home. Your budget should also include hidden costs such as mortgage and building insurance, stamp duty, legal fees, searches and reports, furnishings and fittings, repairs, maintenance and conservancy rates. Be aware that even high salary earners can and do lose their jobs, so do not use this factor alone to determine the size of your mortgage. Take into account possible future lifestyle changes such as periods out of work, or moving from a double to a single income household with the arrival of a new family member. If you are making a first step into the property market you may have to accept that your first home will not be everything you dreamed of but remember that even the humblest of homes can be beautiful with a few personal touches. Your aim should be to buy a home you can comfortably afford to repay over the long term with the goal of being debt free in the shortest possible time.
Your preferred area
Most people decide on a preferred area based on their budget and lifestyle. Others may have a few areas in mind, and are just waiting for the right property to come along. There are several factors to look out for in selecting the right location. Look at the vitality of the estate: Is there a sense of community spirit? Are there recreational and sporting grounds, libraries, shopping centres, good schools and public transportation. This is important for the sake of the house maintaining its value should you need to sell in a difficult market and is especially true if you intend to live in the home for many years. Buying cheaply when you do not like the home area is going to make you miserable in the long run and negate any of the benefits you had hoped for in savings. The right home should be more important than a cheap price unless you have the vision and personality to put up with less than desirable circumstances in order to accomplish a long term goal such as anticipating that an undesirable area will become ‘in vogue’.
Choosing the right mortgage is not just important for your needs, but could make the difference of thousands of dollars in the long term. There are so many products from so many financial institutions all with differing interests rates and a plethora of features and fees. So where do you start? Aside from seeking help from a financial advisor (which may be a very wise decision), there are some ways to begin narrowing down which loan is right for you.
Purpose and requirements of the loan
First consider the purpose of the loan. The next step is to decide what type of loan will best suit your needs. For example, do you want the flexibility to pay off more than your scheduled payments or offset your mortgage against your regular transaction account thereby saving on interest expense? Would you like a credit facility on your account for personal purposes such as purchasing a new car or making home improvements? Would you prefer a fixed or variable rate? If you and your spouse intend to start a family in the future will you need a period of time where you will be able to reduce your repayments? Over what term (how long) do you intend to repay the loan?
Loan Features
Be familiar with the features of several loan products. Keep in mind too that many banks will also allow you to split your loan amount over more than one type of loan to meet your needs. The following lists of features are typical of those offered by many loan products (most of which incur one-off or ongoing fees).
Additional repayments: Making extra payments when you can save thousands and cut years off your loan.
Portability: If you move house, this feature will allow you to keep the same loan. This may incur a fee but will still be less than establishing a new loan.
Credit facility: Rather than take out a separate loan for personal finances such as renovations a credit facility on your loan increases the credit limit on your existing loan. This is subject to approval and other lending criteria.
Consolidation of accounts: An account which merges your transaction, savings and credit accounts may simplify your banking and save you interest on your loan with every dollar you deposit into the account while still giving you access to funds through the usual facilities.
Long term expenses
Try to prioritize your preferred features in a loan (some banks have online questionnaires to help you with this) and calculate the long term costs of the options you are considering. If you make the most of the features of the loan, will you save more than if you chose the loan without the features even though its interest rate is slightly lower? This may depend on how disciplined you are with budgeting, your family’s lifestyle and your future plans. Think about these things as well in order to forecast as accurately as possible your ability (and limitations) to repay your loan.
Start house hunting
What features make one house better than another? Discover what to look for in the right house and how to avoid some of the common pitfalls of purchasing.
The right home
You have loan approval and an idea of where you want to live. You’ve made a list of your needs and wants in a house, and have begun to study the property market in the areas you like. When you do inspect a house, take a big notepad with you and write down everything about the house you like and dislike. It may be helpful to prepare a checklist of criteria beforehand so that you can more easily compare the properties you view. Some of the things to consider will include:
The investment perspective: Will it continue to increase in value, will it require high maintenance costs, does it have potential for improvements to suit your future needs? Is the location an improving area with good access to town centres or is it becoming rundown and neglected?
Your family’s lifestyle: If you are looking to buy in an area that is some distance from where you currently live, is public transport still readily available and how will the location effect traveling times to work or school? Are there any local shops within walking distance or a short drive away?
The position and situation: If you are buying a house with a view, what are the rules to protect it from being built out? If you are looking at closely built units or houses, will you have sufficient privacy from your neighbours, both physically and in terms of sound carrying over into your house?
The aspect and block: Will your house capture the sun? North and North-East facing houses usually give better energy efficiency. Is the house situated on a sloping block and will this limit its use? Does the block lend itself to becoming a suitable play space for children or pets?
Access and parking: If you are unsteady on your feet or have small children who need to be carried from house to car and vise versa, how will you cope with a flight of steps or a steep climb? If you do not have private parking, will it be a challenge to find a parking lot nearby?
Special features: Does the house offer any special features such as a pleasant view, delightful interior, charming courtyard or unique design? A house that stands out in some way from the rest may give it the edge over other houses on offer and is likely to have better resale value if the feature is an integral part of the house.
Renovations/Redecoration: If any work is needed on the house, either to match your tastes or suit your lifestyle, how much will this add on to the purchase price? Would you be better looking for something more closely suited to your needs given the added cost and inconvenience of taking on the projects in question?
Helpful tips and wise cautions
When it comes to house hunting, being prepared with a good knowledge of the property market and knowing your priorities are two of your best weapons. However, even for the more experienced buyer, choosing the right property is rarely a level headed decision because it is hard not to feel emotionally involved. Albeit, with a little common sense, forward thinking, and some sound advice, the would-be homebuyer can be confident that their final decision is the right one.
Who is buying the property?
When you go to see a house, always take whoever else who is involved in the purchase. It may be tempting to split up with the reasoning that you can see more properties in less time, however if you have an idea that the property may be suitable, make the effort to see it with your spouse or partner. By going together you can both get a feel for the place and if you like it, you will be in the position to put in an offer straight away. If only one of you attends the initial inspection, not only will you have to arrange a second viewing for your partner if you are interested (during which time someone else’s offer may be accepted), but the selling agent may not see you as a serious contender if they realise only one of the buying party is present.
Don’t assume that taking a friend or relative to see a property is a suitable substitute as their opinion – while important to you – may be distracting and will not hold to the same priorities as yours.
Sell now or later?
Market Conditions
Ideally you want to sell high and buy low, but unless you are an investor, this is not always practical. However it does help to be aware of the economy because changes within local and international markets can affect property prices and the cost of living in general. For example, when the economy is doing well and interest rates are low, demand for property is generally high and this in turn pushes prices up. By the same token, when inflation is low, investors may be more attracted to the stock market that could also lower the demand in the property market. Industry successes and failures can also have a knock-on effect – the closure of a factory could mean the loss of jobs and hence a dive in house prices in a particular region.
Ask Yourself…
As the sale of your property is likely to be the biggest transaction you may ever make, don’t sell in haste! If you feel under pressure to make a sale on your property, it is far more likely you will accept a price lower than the true value of your home. Do your homework and find out what similar houses in your area have sold for in recent months (this information is now easily obtainable through the real estate agent). Look at the economy to see whether the market is slowing down or speeding up. It can be tempting to rush the sale of your property because you have found the house of your dreams, but selling on a whim or without knowing what’s involved could lose you thousands in your asking price or even give you headaches with your newly purchased property if you have not taken the time to check everything out.
Commission guidelines
There is a standard percentage that real estate agents expect to earn as a commission. Upon appointing the exclusive agent to represent in your property dealings, you and your agent will agree on the amount of commission payable after the property transaction. When you agree to a commission with a listing agent, you should keep in mind that there are usually two agents involved in most transactions. Most of the time, only part of the commission goes to the listing agent’s company. The other portion goes to the company representing the buyer.
Some commission-related questions you could ask:
Will my property be listed in the Multiple Listing Service (MLS)? Being listed in the MLS expands your sales force. Every agent is invited to bring potential buyers to your property. This large supply of buyers will increase your pricing power and the ability to sell your home more quickly.
What kind of Internet marketing will you do?
There are many high profile web sites you will want your agent to advertise on. Ask which ones he/she will use and ask for specific statistics.
What about the agent’s company and personal website?
What kind of print advertising will you do? What newspapers do you advertise in? Ask if the agent advertise your property in the classified newspapers? What is the frequency of advertisements?
What Exclusive and Customized services do you offer?
Go beyond the “traditional” marketing services that are available through most fine companies and find out what your agent and his/her company offers that the other companies and agents do not offer.
What is the effect of your co-broke offering on the company representing the buyer?
Since part of the commission usually goes to the company representing the buyer, you may want to ask whether that portion of the commission being offered is the standard amount. As mentioned above, the more agents bringing their clients to show your property, the more pricing power you will have and the sooner your property will be transacted. And the larger amount of commission being shared with the co-broke agent, the more agents will be willing to show your property.
What is the effect of your marketing to other agencies?
Very few properties are sold through advertising or open houses, but it does happen. Most often, those ads generate calls from potential buyers or sellers, who end up as clients for real estate agents — and you want agents to bring potential buyers to your property. Advertising your property to other agents has a higher impact than direct advertising to consumers.
Lastly, ask yourself…
What is more important to you – getting the most amount of money from your sale, or paying the lowest sales fee? Once you decide which is more important, how much commission to invest in your property sale becomes clear.
Don’t be fooled by discount brokers.
Commission fees provide income for three items only – Profit, Overhead & Marketing. Overhead is a variable fixed cost and that leaves only Profit & Marketing.
Where do you think discount brokers cut back to make up for their reduced fees?
It is surely not Profit… They cut back in Marketing which means that as a result of reduced marketing you are highly likely to receive much less marketing exposure for your property.
Recent transacted price
HDB Flats
To check the recent transacted price of HDB flats, please click:
HDB Resale Transactions website
Private Property
To check the recent transacted price of private properties provided by URA, please click:
Residential Property Transactions website
GLOSSARY:
Apartment and Condo – Private condominiums and apartments, where residents share the common compound and facilities, are the preferred choices for most expatriates. They come in various sizes, ranging from low-rise blocks to extensive high-rise developments. Most condos come with good-quality finishes, luscious landscaping, basement car park and full recreational facilities such as clubhouse, children’s playground, gymnasium, swimming pool, squash, tennis courts, and sometimes even a putting green. Most developments have 24-hour security surveillance, intercom systems and sometimes even home automation systems. The units range from studio, 1, 2, 3 and 4-bedroom units, penthouses. They start from as small as 500 square feet to as large as 8,000 square feet.
– Condo (Condominiums). Apartment with facilities.
– Duplex. Apartment divided into two living residences, having separate entrances.
– HiRise (High rise Apartment). Usually with no facilities.
– LoRise (Low rise Apartment). Usually with no facilities.
– Mansionette. Apartment with two levels, double storey.
– Penthse. Biggest unit in a condo or apartment block. Usually on top floor and two levels.
– TownHse. Landed house that shares the same compound or facilities (if any).
– WalkUp. Low rise apartment without a lift, have to walk up using the stairs.
HDB Flats – More than 80% of Singaporeans live in public housing. These apartments are mostly owned by the occupants. These apartments are located in housing estates, which are self-contained towns with clinics, schools, supermarkets, food centres, as well as sports and recreational facilities. They are known as HDB flats because they are built and maintained by the Housing and Development Board (HDB). For the classification of HDB flats, the living room is counted as one room.
– 2 room HDB Flat: 1 bedroom with a built-in area of about 45 sq m or 485 sq ft.
– 3 room HDB Flat: 2 bedrooms with a built-in area of about 70 sq m or 754 sq ft.
– 4 room HDB Flat: 3 bedrooms with a built-in area of about 90 sq m or 969 sq ft.
– 5 room HDB Flat: 3 bedrooms with a built-in area of about 110 sq m or 1,184 sq ft.
– EA (Executive Apartment): 3/4 bedrooms with built-in area of about 150 sqm or 1,615 sqft.
– EM (Executive Mansionette): Same as Executive apartment, except it has two levels.
– 6 room HDB Flat: Jumbo flat joint by two 3 room flats
Landed Property – Landed properties are houses with gardens. Conventional landed housed comprises of bungalows (a freestanding house), semi-detached (a pair of houses) and terrace units (a row of houses), all of which come with private garden compounds or garage.
– Bungalow. Free standing house with no shared wall with others except the fence.
– Semi Detached. A pair of houses, two houses joint side by side.
– Inter Terrace (Intermediate Terrace House). A row of houses joint side by side.
– Corner Terrace (Corner Terrace House). The last house of the row of houses.
Others:
– Colonial House, Bungalow – Houses built in the pre-war British colonial times.
– Conservation House, Shop House – Houses or Shop Houses that are marked for conservation.
– Black and White House – Houses built in the pre-war British colonial times, usually with white external walls with wood painted in black.
– Heritage House – House constructed with a touch of Asian heritage and culture, Balinese concept and loved by expatriates.
Setting the price
Location, demand, economy
The best way of knowing the true value of your house is to have an independent valuer to give you a valuation. They are skilled professionals who are legally liable for their services and have no financial interest in the sale. You can use this valuation against the appraisals given by the agents you are considering hiring to see how accurate the agents have been in their assessments. A good agent should be well aware of what similar houses in your area have sold for in recent months and can also access market analysis information that gives data on local properties that have sold or failed to sell, including the asking prices. Ask your agent to go through this information (usually called a Comparative Market Analysis) with you to show how they have arrived at the price they are suggesting. The agent (and therefore you) will also need to consider market conditions in terms of buyer demand, interest rates, inflation rates and any other factors affecting the economy. If changes in the economy are influencing the way people are spending, the property market is likely to be effected in some way. Your potential buyers too, should also have a fair knowledge of your house’s worth, probably having seen every other house for sale in the area. Be aware however that it is in their interest to get it a lower price; so don’t feel pressured into accepting a low offer.
Word of Advice:
It is likely that you will receive varying recommended prices from the agents you invite to make appraisals. Don’t immediately take on the agent who gives you the highest price. Some agents use this as a tactic to attract more business, however if you list your house at an over valued price, it may lose you valuable time in making the sale. In the meantime, you may get desperate enough to drop your price thus giving the dishonest agent the fee for a sale that could have been made months ago by the fair practicing agent.
Aim for the right buyers
Once you have set the price for your house you need to aim to attract the buyers who are able to afford it. Some techniques may attract many people to view your home, but this does not necessarily mean they are the right people. For example, if your agent has listed your house in a price range which begins much lower than its true value (say from $300,000 when it is worth 350,000), the people who will be interested will be those hoping to pay only the lower amount. If you only have offers for the lower amount, you may eventually be persuaded to accept a much lower offer than you could have received if you had aimed at people who can afford the full price (or more). Remember that attracting more viewers may give you more offers, but if you want to sell your house for what it’s worth you need to aim for people able to pay your price or above. Quality is certainly better than quantity when it comes to finding potential buyers. If you have a good agent and trust them to get you the highest possible price, be patient and wait for an offer you will be happy with.
What’s my profit?
Once you have a good idea of what your asking (or reserve) price will be, it’s time to sit down and do the figures. You will want to have as accurate an idea as possible what you’ll have left after everyone has been paid. Start with the lowest price you are willing to accept (though hopefully you will receive more than this) and take away the agent’s commission, advertising and marketing costs, conveyancing fees, improvement costs and moving and relocation expenses. If you intend to pay off your mortgage or another loan take away this amount too. If you are buying elsewhere, there’ll be many more expenses to take off as well, including the price of your new house, stamp duty, surveyors fees, conveyancing and so on.
Preparing your home
It’s Showtime. The curtain is about to be raised. Your potential buyers are on their way. But wait… have you done everything to achieve a successful sale.
Remember Murphy’s Law – ‘Anything that can go wrong, will go wrong’. Your job is to ensure that this does not come to pass. Instead, you should be striving for ‘everything went well…’
This is an important task because you may not have the luxury of a second chance to correct a negative first impression. Buyers will form an opinion of your house in the first few seconds of their visit and they will inclined to reinforce their opinion as they continue to view the house. Your house should not only be in the finest possible condition just before the viewing, but should remain that way until it is sold. It’s always possible that a last minute viewing by a prospective buyer will end up as a sale.
Empathizing with buyers
The key to buyers’ heart is empathy. What you perceive does not matter. It is what the buyers feel that counts. They determine the sale of your house. Looking at your house through their eyes will help you be more objective in determining what needs to be done to get a good first impression. Do note that while buyers evaluate logically, they buy emotionally. Ultimately, it is not just the logical justification for the investment, but the ability to see they living in the house that will lead to a buying decision. Buyers should have a ‘good to be home’ feeling when they enter your house.
Help buyers come to a decision
It would be a good idea, for example to remove your car from the porch or any other big objects, to give buyers a clear view of your house. This will facilitate their external evaluation of your property. Keeping pets and children away during showtime would further aid you in the process of selling your house. This will ensure that buyers are not distracted by the presence of barking dogs or noisy children.
Providing Virtual Tours of your property will help buyers able to view it as many times as they want without disturbing you. It must also show photographs to highlight the attractions in the community, including existing and potential developments.
Importance of a positive ambience
Your home should also have a positive feel about it. Buyers should be greeted by a welcoming ambience. It is important to appeal to all the senses when selling your house. Enhance the buyers’ mood by cooling your house and providing soothing background music. Even the smell of the house should be pleasant and refreshing. To appeal to their visual senses, display decorative lightings and beautiful pictures in addition to waxing the floor and polishing metal finishes.
Stand out from the crowd
When you market your house in a highly competitive market, do not make the mistake of being a frog in the well. Most buyer will see more then ten houses before making a decision and these days they are certainly spoilt for choices. Make a point to study open houses and show flats, plus interior decoration magazines and other publications. There are lessons that you can learn to help you improve your house and enjoy better returns. As you are preparing for your house, be guided by the principle that every part of the house must tell a story of benefits. More importantly, look out for the negative elements and remove them. Buyers tend to be skeptical when viewing houses and if they find something amiss, they are inclined to think that there will more things wrong with it.
Develop a checklist
Once you have gathered the ideas, develop a checklist and prioritize what needs to be done. Begin preparing your house from the outside. This is important because many a sale has been lost even before the buyer stepped into the house. The curb appeal, in other words, the external facade of the house sets the tone of the viewing. Prior to every viewing, check to ensure your house is ready and that nothing is compromised. If the house is not ready, request for time to dress up the house. It is better to lose some time than to lose a potential sale.
When you dress your house correctly and continue to improve upon it, there is no reason why success will not come knocking on your door soon.
Showing your home
Prospective buyers never buy a house ‘cold’. They want to see the house, inspect it, ask questions and satisfy themselves that it is the best choice. The presentation of your house should therefore be a Positively Overwhelming & Memorable Performance or P.O.M.P. for short.
Buyers usually come with pre-conceived ideas of what they are looking for in a house. They always have a mental checklist in their mind to help them arrive at their decision. The P.O.M.P. must therefore address issues that will help the buyer decision to buy your house. You have to look at the whole selling process through the eyes if the buyer. What you show is not as important as what the buyers perceive. Perception is king and as sellers, you must manage the perception of the buyers.
The P.O.M.P. can be divided into 5 stages and requires you to address several key issues to ensure a successful sale.
Stage 1: Preparation Stage
– How to make your house more attractive and appealing?
As mentioned in the preparation your house for Showtime, the objective of this stage is to create an emotionally stimulating environment to the buyers. The goal is to give them a ‘welcome home’ feeling and convince them that this is where they will enjoy the comfort and pleasures of life.
Stage 2: Probing Stage
– What are the needs and behavioral patterns of the buyers?
You have to understand the motives, wants and personality of your buyers. Only then, you can help them realize the value and benefits of your house better. You must uncover the needs of the buyers – a process similar to peeling the layers of an onion to see if the buyer matches the following ‘F.R.I.E.N.D’ ly criteria.
Finance: Do the buyers have the money to buy the house?
Responsiveness: Are they willing to discuss and cooperate with you?
Inclination: How motivated are the buyers about buying your house?
Eligibility: Are they in a position to buy your house?
Needs: Can you meet their needs and requirements?
Decision: Will they have the authority to make the decision?
Stage 3: Presentation Stage
– How to convince the buyers to buy your house?
Falling in love with a house is like falling in love with a person. It is better if the sellers are “unobtrusive” during the presentation of the house. This will make the prospective buyer feel more relaxed and be more open about sharing his or her opinions after viewing.
Stage 4: Prevention Stage
– What prevents buyers from buying your house?
Life, including the sale of your house, is not a bed of roses. You must expect buyers to raise questions, doubts and objections. It is part and parcel of the decision making process. When prospective buyers raise concerns, it is an indication that they are interested in your house. The best way to remove a concern is to prevent it. To do so, you need to apply the 3 P’s strategy. You need to pre-empt a buyer’s potential concerns prior to meeting him or her. You need to prepare the appropriate responses and if necessary, respond to them proactively.
Stage 5: Position Stage
– How to make the buyers believe (logic) and feel (emotion) that your house is the best choice for them?
You will do well to remember the words of Sun Tze, the famous military strategist, ‘Know your enemy…’ Why? Because prospective buyers will visit other properties and make comparisons before deciding to buy a house. It is therefore important for you to visit and study other show-flats and properties, especially those that are in your neighborhood, so to ensure that your house is well positioned to achieve success.