Hello dear readers! It’s been a busy and fruitful year, and as a result, the blog has sadly taken a back seat! But now that the holiday season is upon us, it’s a great time to reflect upon the wealth of experiences notched in 2014!
One phenomena I’d like to discuss today is what I’d term ” The Upgrader’s Dilemma”- you already own a home, but want to shift to a bigger place and/or closer to good schools for the kids’ sake etc. Upgrading makes sense in a soft market, since you can buy your next bigger, better home at more attractive discounts these days (and in the coming months), but the dilemma is – how do you fetch a good price for your current home in a such a “slow” market?
Not sure if I’ll regret sharing these little “secrets”, but to me they’re fairly common sense, and often times it’s not just a matter of knowing but putting your awareness into practice.
Some tips are targeted at home owners, while others are more for fellow agents, so bear in mind some notes may be less relevant to your personal situation. Now, let’s get on with it!
1. Exclusive Sale
This advice goes out to both sellers and agents. Think about the first impression given to prospective buyers when they see 3-4 of the exact same unit being advertised by various agents. “Is the seller desperate?” Or “Wah, so many agents, still cannot sell…”
When wearing my “buyer’s agent” hat, I definitely prefer to show my clients exclusively-marketed units. I still recall a painful experience I had prior to becoming an agent, where we failed to secure a beautiful bungalow despite offering more than the eventual selling price, simply because the sellers forgot to inform the particular one-of-many agents whom we happened to view with that an offer was in the midst of being accepted.
Many a time, agents who are willing to take on non-exclusive listings also seem to take a shotgun approach, favoring quantity over quality. And when working with quantity, they often aren’t able to advise in detail on the key selling features of the property, sometimes even providing the wrong unit number, which can result in embarrassing duplication of viewing appointments.
Assuming you manage to get the viewers in, getting a good-enough offer is the next hurdle when there are multiple listing agents in play. Try pushing for a higher offer when you’re faced with a, “but the other agent said can try…” That is the open-lister agent’s constant dilemma, “Do I maintain a firm stance to push for a higher price? Or should I just grab the offer before one of the other agents gets the cheque and pressures the seller?”
Sure, some sellers will say, “But it’s ok, I decide the selling price at the end of the day.” But how often does one see pasar malam(night market) sellers commanding premium-product prices? And as an agent, is it worth investing marketing resources into a deal that ultimately has a Russian roulette, all-or-nothing risk level?
2. Set a clear time line
There’s good reason why the CEA sets the duration of an exclusive sale agreement at 3-months. And why developers release units for sale in phases rather than risk having unflatteringly high numbers of unsold units.
Our aim when advertising listings is to create the most desirable image of the property as ethically possible. Being known as “that unit that’s gone unsold for over 6-12 months” does the polar opposite of what you need to secure a reasonable selling price.
In today’s market, it’s realty-suicide to expect/hope a casual viewer will come along, fall in love, and make an offer the owner can’t resist. 99% of the time, prospects that convert into a genuine offer are likely
to have been scouring the market for some quite time, often growing quite selective of units they even choose to view, let alone make an offer on. And nobody likes feeling like the sucker that picked up something that’s been left on the shelf for months.
Having a set timeline also helps create a sense of urgency in would-be buyers, a rare commodity in today’s wait-and-see climate. Do note however that this is not the right time to be trying to fake an “offer today or it’ll be gone tomorrow!”, you’re likely to fail and look stupid or worse, unethical.
3. Have a Plan B
This ties in with the point above, what do you plan to do if the property is not sold at the target price within the target period? As mentioned earlier, you aren’t doing yourself any favors when you allow marketing efforts to drag on for more than a couple months. Also be aware that if you’re unable to sell now, you are likely to face even greater challenges when we start seeing the annual new housing supplies triple the normal 6,000-7,000 per annum rate of supply over the next 30 months or so. Be prepared to either adjust your price expectations, spend some money maintaining/upgrading the property, or hold on to the property for another 5-10 years.
Bear in mind that the deadline mentioned in point 2 need not necessarily be a specific date. The strategy could well be to market for sale and rent simultaneously, and take whichever is able to hit your target price sooner. Tenants hate to stay in properties that will be marketed for sale during the lease tenure, so be sure to highlight to prospective tenants that once a lease is secured, they will not be disturbed for viewings in the first year (for example.)
In a market where the bulk of serious buyers are seeking homes for their own stay and avoid options that are tenanted for longer than a year or so, those with a genuine interest in the property will be keen to avoid it becoming tenanted and thus more likely to make a timely decision on the matter.
There’s much left for further discussion on the intricate art of selling, particularly in today’s market where clear logic and thoughtful analysis trump pushy sales tactics, but for today I shall leave you with these 3 introductory points to ponder.
In my next post, I look forward to sharing 3 case studies on actual record-priced sales I personally concluded in 2014 and how you may adopt similar strategies to help move your listings and/or realise your own home-upgrade aspirations.