singapore asia usa tips for property buyers & sellers

Reply dated November 26, 1997 5.32 a.m - 6.54 a.m
Date: Tue, 25 Nov 1997 21:03:39 +0800
From: ......<..........@nesz.hk.super.net>
Subject: Property Problem

Hello Dr. Sing,

I am a property owner in distress and would certainly need your advise. I have a property at Melville Park. It is a 2 bedroom apt (936 sq. ft). I bought it under a sub-sale agreement in end 95 when prices are high. Desperate at that time as I have just got married and need an apt immediately (less than 3 mths time). I paid a hefty $540K that time and that was the only thing I could afford.

Now 2 years down the road, I have recently found my dream home and had taken no second thought before jumping in to pay the 10% downpayment. Now I have to sell my other apt to raise enough finance.

I have been advised by my agents that there is no buyer even after their advertisements. As I am not asking for rediculous price, I just feel that they have not done their best in reaching out to the market by just advertising in the conventional 3-line ST advert.

I guess that u can do more for me just like u have helped other buyers and sellers. I hope that u can assist me by putting my property up in your web page.

If u need further info, pls e-mail me at .....@nesz.hk.super.net.

Thanks

Above is a common problem for many surfers who need money for studies/other reasons but found that their properties have fallen sharply in value. Several emailed to me from overseas and I hope this reply will help all Surfers.

November/December 1997 is a very bad time to sell or rent any property because it is a holiday period. Every other day, the Singapore newspapers have reports about over-building and supply of residential properties. Big developers lobby the Government for help more than once. Prospective Buyers have lost confidence. Yet Sellers/Landlords are still asking unrealistic prices e.g.

1. In a November 97 Knight Frank property auction in which I attended, around 2/9 properties received bids but these were withdrawn because the bids were "below reserve price" and at least one was a "mortgagee sale". This "no sales" event is a common occurrence in auctions. In my opinion, it is a waste of time for bona fide Buyers to attend such auctions.

2. My client was offered S$650,000 for his Potong Pasir Executive Maisonette just one year ago. He hoped that his property would rise further as there would be a subway being built and the hope that the dominant political party would wrest control of his constituency from the opposition party. External events and the anti-property speculation curbs led to his property being given a November valuation of S$445,000. He still wants to sell it at S$580,000, $150,000 above valuation. As you can see, there will be no Buyers and I refused to advertise for him in the Straits Times.

By the way, the Straits Times is still the best way to sell your properties until the Internet becomes established in the next 2 years(my prediction) and Singaporeans become Internet smart.

The housing agent goes bust if he advertises 3 times per week for 3 months (usually possible to sell if price is reasonable) as there are few genuine Buyers around. It costs $30/day for that 3-line advertisement you are talking about or $1,200/3 months/property at 3 adverts/week.

3. Another client owning a Bishan Apartment valued at S$175,000 (compared to $185,000 in September 1996) found no Buyers despite my 3 times a week advertisement in the Straits Times, distribution of flyers in the whole of Bishan, contact with other agents, putting up notices in malls. He wanted $200,000 but most Chinese (the majority of the population) will not buy a low floor apartment.

If he sells at $165,000, he may be able to find a Buyer. Of course, he has been telling me that I am not a good agent, trying to make a quick sale to get my commission and I should hang around the Housing & Development Board offices where there are people booking new HDB apartments and start soliciting. Why would there not be Buyers for a cheap $200,000 apartment near the Bishan MRT?

Advices to writer:

1. Is Selling price of $577/sq. ft at valuation?. Please get a professional valuation report from one of the reputable valuers and let prospects know you are selling at valuation. It may be much lower than your purchase price.

2. Facing the main road, expressway and ground/low floor? Valuation report may be too high if you have such characteristics in your property because investors do not want such apartments.

3. Sell it yourself. The Owner advertises himself.

4. Owner advertises but Agent does the viewing. If you are overseas or not free to entertain prospects, get a "hungry" realtor you can trust and pay him/her the standard commission of 1%. The only condition is that the agent must be available by handphone anytime and be willing to work during weekends. How to tell whether the agent is "hungry"? If he/she is not willing to work weekends and he drives a Mercedes!

You must trust him/her to do a good job and not be aggressive towards the agent. You must be prepared to spend money on advertisements in the Straits Times and on other promotional material.

5. Are you a bona-fide Seller? Did you entrust the keys to the agent so that he/she is able to work effectively? Or are you the type of Owner who must be contacted first to go down to open the apartment when there are viewers and who is only free on weekends or in the evening?

6. Are you realistic? Since there is no indication of Selling Price in the writer’s letter, I presume that the writer is not keen to make a "loss". A genuine Seller will announce his Sales Price to everybody. Just as there are "hungry" realtors, there are "hungry’ Sellers too but I presume the writer is not one.

7. Refinancing and renting. Assuming you use cash of $540,000 and that you are not a foreigner, the Singapore banks may re-finance your property at 70% of valuation. I presume valuation to be $500,000. You can get an overdraft of $350,000 to put as downpayment for your new property. Mortgage interest will probably be covered by rental income. The ground floor units of Melville Park have been rented recently for S$2,000 and higher floors at around $2,500/month.

Please check to see whether you can afford to pay mortgage interest for both Melville Park refinancing and new property.

8. Expect great difficulty in getting good rentals in the next 2 years. Rentals have fallen considerably because there are massive new developments nearer town, such as Valley Park and UE Square which can flood the market with few hundred 2-bedroom apartments!.

9. Loans from parents and insurance companies (if you have insurance policies).

10. Sell it cheap and let your mind be clear. You can then focus on your work, get the promotions (if you are an employee) and make back the money as I presume you are still young. When you sell cheap, there will be Buyers as Melville Park is a well located and it has the holiday resort ambience unlike many new developments nearby..

As your problem is representative of many Singapore property owners, I have taken some time to reply in detail and will publish the advices to benefit others and to save me giving similar replies.

I do get a few surfers from the US, Singapore and elsewhere enquiring about 2-bedroom or 1-bedroom condos. These are probably single Singaporeans living in the US. Please let me know the Selling price and Valuation price as at October/November 1997, so that I can publicise on my webpage.

Good luck.