2012 jul 2
Property Investment Tips
Part V: Tips for Buying (Resale)
If you are buying a house, it pays to pay (pay to pay, again??) attention to some pointers:
1. Agent or not
Typically, most buyers will approach the seller's agent or seller direct when making enquiries on an interesting property. Therefore, there is no need to engage an agent if you know very clearly what you are seeking. However, if you only have a budget and maybe a district as criteria, it may be helpful to engage an agent (especially one that specializes in those districts you are keen in) to hunt for suitable units for viewing. Often, they will have internal (to agencies only) listings that aren't otherwise accessible to the public. Therefore, you will have higher chances of finding the right house.
If however, you have already narrowed down to a few developments, do note that you may be able to purchase owner's contact details from the authorities (I think SLA). But the thing is you wouldn't know which of those owners are actively selling. And you wouldn't want to spam or bombard all of them (plus it comes with costs). Perhaps getting an agent or acquaintance who are residents in those development would help greatly, as they can help drop flyers into the owners mailboxes. Owners who like to save on commission will be happy to contact you direct to discuss.
2. Ok agent, but exclusive or not?
Buyers don't need to sign exclusivity with any agent. But if you have narrowed down a particular agent who is familiar with your target area/development by all means stick with him/her. Even without an agent, if you are able to somehow visit the development (maybe your relative stays there, an old classmate's BBQ party was held there and you attended etc), take note of the flyers dropped around the mailbox areas sometimes it shows agents who advertise their recent successful transactions of the development - you can approach them to suss out the units on the market. No harm to try to check with the security if they know of any agents who often visit the condo to conduct viewings etc and get their contact numbers.
3. Making the appointment
Whether in an upmarket or downmarket, people may say it is a seller's or buyer's market. The truth is, there are always people selling and buying in any market. Unless the development is cursed and falling apart, which in case is probably buyer at the upper hand of negotiations, there isn't really a pecking order. Before making the appointment, make sure you can stick to it and give some allowance for jams, delays etc. If you can't make it, do be nice to reschedule. Don't turn up too early and do not be late as well, as you are often not the only one viewing the place and you wouldn't want to turn up while another group is viewing and you will have to wait and waste some more time. If you are early, you can try to test if the security is tight by simply telling them you have a viewing appointment later and if they just let you in without making sure you write down your particulars then you know how 'strict' the enforcement of this condo is - a real issue when and if you become a new owner of a unit there. Also take the time to observe the people and residents there. Whether people take care of the surroundings and if it is well maintained. Sounds, sight, smell.... take in everything you possibly can. Unkempt shrubs, rubbish strewn, unsightly knick knacks in common areas, lots of barking mad dogs, rowdy children, karaoke singing, mahjong, quarrelling, etc .... etc. Assess whether all are good and well and comfortable.
4. The viewing
If the owner is around, smile and be nice. Do not - I repeat - do not ever make negative comments about the unit, deco, fixtures, choice of colors etc during the viewing. Reserve them for later. If there is any obvious malfunction or defect, politely ask the agent (or the owner if there is no agent) about it and understand the issue. If it can be rectified, suggest to the owner and see if he/she is willing to make good the defect before handing over.
Ask the agent how long the unit has been on the market. If it has been marketed for months, the owner might be in a more flexible bargaining position. Ask about monthly maintenance, parking, neighbours and general upkeep of the estate - from the point of view of the owner. Of course they will paint it in a good light as far as possible, but some things can't be hidden eg. badly maintained landscape and common facilities. From these responses you can gauge how truthful and genuine the owner/representative agent is. If the owner is friendly, you can try to slip in a question on their reason forsale, to understand if there is anything inherently trouble in the unit or development. If the owner shares bit of their circumstances like eg. wife delivering baby soon and they need bigger place, or they posted overseas and need to sell fast, you will be able to plan your move better since you now know they have a time limit on the sale.
Never make an offer on the first viewing unless you are extremely pleased and everything is perfect. Besides, you need to view it in both day and night time, so that you can feel whether the afternoon sun has any effect on heating and get an idea of insects problems, vehicle lights shining into the unit, common area lighting shining right into the unit and so on. So once you have done that, decide on your range of offer and convey it to the agent. A professional agent will submit your offer from low to high. Don't bother with verbal offers - be sincere with a cheque. But do so after checking on the valuation of the unit with your banker(s) and confirm that you are paying the right price.
5. Closing
Be firm on your offer price, if you are sure it is a fair one. Also don't let your agent sway you into a bidding war with another prospective (or imaginary) buyer. Once you have set the range, stick to it. Always make sure an Offer to Purchase is given to owner/agent along with a cheque. The owner or agent will then issue the Option to Purchase back to you or your representative agent. This gives you 14 days to decide whether to Exercise that option by way of your lawyer. Before this, get ready your preferred lawyer, firm name and address details. If you don't have one, either ask your agent to recommend or check with your favourite bank. Average range is from $2500-3500 for a sale case (before subsidy). As for the Option duration, to make sure you can get the necessary bank loan (if you are getting one), plan for 10-12 weeks. If you are urgently needing the unit, you can try to ask for 8 weeks which really is the absolute minimum. Seller usually will not have any issue as this means they will get the sales proceeds faster.
6. Interim and Hand Over
If you are in urgent need to move in due to circumstances, you could ask your agent to check if the seller is agreeable to let you rent the place while waiting for completion of the sale. It is recommended to bargain for a lower than market rate since usually nobody will want to rent a place just for 8-10 weeks. Also, once you take the keys from your lawyer, make a check on the unit ensuring that all fixtures and/or furnishing promised in the sale are intact and present. You should also note any extraneous items left behind, especially bulky items, which really should have been removed by the seller. If it is not removed, contact the agent/owner and ensure it is done immediately. Do also ensure that you get the full set of keys and access cards as well as transponders and so on.
7. Leftover Mail
The seller (or god forbid, previous owners/tenants) may have missed out, or deliberately omit, to contact people and businesses to make an address change. If you are kind, set aside these mails and contact the seller after a month or two (to ensure all senders who were not updated have sent through stuff) to collect them at your convenience - and remind them to please update their address. Other than that, you can just dispose of them subsequently.
8. Be happy and proud
Be a proud owner of your pre-loved new home!
Property Investment Tips
Part V: Tips for Buying (Resale)
If you are buying a house, it pays to pay (pay to pay, again??) attention to some pointers:
1. Agent or not
Typically, most buyers will approach the seller's agent or seller direct when making enquiries on an interesting property. Therefore, there is no need to engage an agent if you know very clearly what you are seeking. However, if you only have a budget and maybe a district as criteria, it may be helpful to engage an agent (especially one that specializes in those districts you are keen in) to hunt for suitable units for viewing. Often, they will have internal (to agencies only) listings that aren't otherwise accessible to the public. Therefore, you will have higher chances of finding the right house.
If however, you have already narrowed down to a few developments, do note that you may be able to purchase owner's contact details from the authorities (I think SLA). But the thing is you wouldn't know which of those owners are actively selling. And you wouldn't want to spam or bombard all of them (plus it comes with costs). Perhaps getting an agent or acquaintance who are residents in those development would help greatly, as they can help drop flyers into the owners mailboxes. Owners who like to save on commission will be happy to contact you direct to discuss.
2. Ok agent, but exclusive or not?
Buyers don't need to sign exclusivity with any agent. But if you have narrowed down a particular agent who is familiar with your target area/development by all means stick with him/her. Even without an agent, if you are able to somehow visit the development (maybe your relative stays there, an old classmate's BBQ party was held there and you attended etc), take note of the flyers dropped around the mailbox areas sometimes it shows agents who advertise their recent successful transactions of the development - you can approach them to suss out the units on the market. No harm to try to check with the security if they know of any agents who often visit the condo to conduct viewings etc and get their contact numbers.
3. Making the appointment
Whether in an upmarket or downmarket, people may say it is a seller's or buyer's market. The truth is, there are always people selling and buying in any market. Unless the development is cursed and falling apart, which in case is probably buyer at the upper hand of negotiations, there isn't really a pecking order. Before making the appointment, make sure you can stick to it and give some allowance for jams, delays etc. If you can't make it, do be nice to reschedule. Don't turn up too early and do not be late as well, as you are often not the only one viewing the place and you wouldn't want to turn up while another group is viewing and you will have to wait and waste some more time. If you are early, you can try to test if the security is tight by simply telling them you have a viewing appointment later and if they just let you in without making sure you write down your particulars then you know how 'strict' the enforcement of this condo is - a real issue when and if you become a new owner of a unit there. Also take the time to observe the people and residents there. Whether people take care of the surroundings and if it is well maintained. Sounds, sight, smell.... take in everything you possibly can. Unkempt shrubs, rubbish strewn, unsightly knick knacks in common areas, lots of barking mad dogs, rowdy children, karaoke singing, mahjong, quarrelling, etc .... etc. Assess whether all are good and well and comfortable.
4. The viewing
If the owner is around, smile and be nice. Do not - I repeat - do not ever make negative comments about the unit, deco, fixtures, choice of colors etc during the viewing. Reserve them for later. If there is any obvious malfunction or defect, politely ask the agent (or the owner if there is no agent) about it and understand the issue. If it can be rectified, suggest to the owner and see if he/she is willing to make good the defect before handing over.
Ask the agent how long the unit has been on the market. If it has been marketed for months, the owner might be in a more flexible bargaining position. Ask about monthly maintenance, parking, neighbours and general upkeep of the estate - from the point of view of the owner. Of course they will paint it in a good light as far as possible, but some things can't be hidden eg. badly maintained landscape and common facilities. From these responses you can gauge how truthful and genuine the owner/representative agent is. If the owner is friendly, you can try to slip in a question on their reason forsale, to understand if there is anything inherently trouble in the unit or development. If the owner shares bit of their circumstances like eg. wife delivering baby soon and they need bigger place, or they posted overseas and need to sell fast, you will be able to plan your move better since you now know they have a time limit on the sale.
Never make an offer on the first viewing unless you are extremely pleased and everything is perfect. Besides, you need to view it in both day and night time, so that you can feel whether the afternoon sun has any effect on heating and get an idea of insects problems, vehicle lights shining into the unit, common area lighting shining right into the unit and so on. So once you have done that, decide on your range of offer and convey it to the agent. A professional agent will submit your offer from low to high. Don't bother with verbal offers - be sincere with a cheque. But do so after checking on the valuation of the unit with your banker(s) and confirm that you are paying the right price.
5. Closing
Be firm on your offer price, if you are sure it is a fair one. Also don't let your agent sway you into a bidding war with another prospective (or imaginary) buyer. Once you have set the range, stick to it. Always make sure an Offer to Purchase is given to owner/agent along with a cheque. The owner or agent will then issue the Option to Purchase back to you or your representative agent. This gives you 14 days to decide whether to Exercise that option by way of your lawyer. Before this, get ready your preferred lawyer, firm name and address details. If you don't have one, either ask your agent to recommend or check with your favourite bank. Average range is from $2500-3500 for a sale case (before subsidy). As for the Option duration, to make sure you can get the necessary bank loan (if you are getting one), plan for 10-12 weeks. If you are urgently needing the unit, you can try to ask for 8 weeks which really is the absolute minimum. Seller usually will not have any issue as this means they will get the sales proceeds faster.
6. Interim and Hand Over
If you are in urgent need to move in due to circumstances, you could ask your agent to check if the seller is agreeable to let you rent the place while waiting for completion of the sale. It is recommended to bargain for a lower than market rate since usually nobody will want to rent a place just for 8-10 weeks. Also, once you take the keys from your lawyer, make a check on the unit ensuring that all fixtures and/or furnishing promised in the sale are intact and present. You should also note any extraneous items left behind, especially bulky items, which really should have been removed by the seller. If it is not removed, contact the agent/owner and ensure it is done immediately. Do also ensure that you get the full set of keys and access cards as well as transponders and so on.
7. Leftover Mail
The seller (or god forbid, previous owners/tenants) may have missed out, or deliberately omit, to contact people and businesses to make an address change. If you are kind, set aside these mails and contact the seller after a month or two (to ensure all senders who were not updated have sent through stuff) to collect them at your convenience - and remind them to please update their address. Other than that, you can just dispose of them subsequently.
8. Be happy and proud
Be a proud owner of your pre-loved new home!
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