Selling a property in Singapore can be a daunting and stressful task. The competitive real estate market demands a savvy seller who understands the nuances of timing and presentation, and the factor that is often overlooked is the importance of speed when selling a property. Although we have always propagated for our clients to not market their property hastily and to sell it the way it deserves to be sold, certain circumstances can sometimes demand the need for speed.
In this article, we will explore why speed matters when selling a property, drawing from a case study and recent experience by the PropertyLimBrothers team.
Time is Money
In Singapore’s fast-paced real estate market, time is of the essence. The longer a property sits on the market, the more it costs the seller. This is due to various factors such as maintenance fees, property tax, and mortgage payments. These costs add up quickly and can eat into the profit margins of a sale. The quicker a property is sold, the more money the seller can potentially save. We often talk about opportunity costs when it comes to the property journey, and generally discourage our clients from timing the market. Instead, we encourage following a timeline that makes the most sense. That is because timing the sale of your property can have significant consequences, such as delaying an important life goal or missing out on a job opportunity.
We previously wrote about the conundrum of selling and buying in a hot market and how the problem of trapped funds creates stress for sellers who want to move on to their next property. This is why establishing a solid timeline and having a proper exit strategy is crucial to ensure a seamless and stress-free move.
Speed can sometimes be critical as well in a seller’s ability to negotiate a favourable price. The longer a property sits on the market, the more leverage the buyer has in negotiating a lower price. This is because sellers may become desperate to close the deal if they feel like they are losing out in terms of opportunity costs, and may make an emotional decision such as accepting a lower offer to get the property off their hands. On the other hand, if the property is marketed quickly and offers come in immediately, the seller has more bargaining power and can negotiate a more favourable price. Therefore, speed can be the difference between a seller getting a fair price for their property or settling for less.
Avoiding Potential Complications
Another reason why speed matters when selling a property in Singapore is the buyer’s financing options. In Singapore, buyers have various financing options, such as bank loans, HDB loans, and CPF. However, these options may not be available indefinitely. Bank loan interest rates may fluctuate, and HDB loan eligibility criteria may change. Therefore, buyers may need to act quickly to secure the financing they need to purchase the property. If a property is on the market for too long, the buyer may miss out on these financing options, leading them to look for other properties.
Furthermore, speed is also essential in avoiding potential complications in the sale process. The longer a property sits on the market, the greater the chance of encountering issues such as buyer’s remorse, changes in financing options, and unexpected cooling measures by the government. One big example was how the government rolled out the 15-month wait-out period for current and ex-private property owners who wish to downgrade to an HDB flat. This cooling measure impacted a lot of buyers and sellers who were preparing to make such a move.
Such unexpected complications can cause delays in the sale process and potentially derail the sale altogether. Therefore, selling a property quickly can minimise the risks of encountering complications and ensure a smooth and hassle-free sale process.
Case Study: How We Sold in 1 Day
This compels us to recall a particular sale that happened in March 2023, last month. An experienced seller who was well-acquainted with our signature home tour videos contacted our team to market their property. It was a 2-Bedroom + Study unit in Sol Acres that was extremely well-renovated.
The main challenge that the team faced at that point was that the unit had not fulfilled its 5-year Minimum Occupation Period (MOP) yet as an executive condominium (EC) when the seller contacted us to sell this property. And because the Option to Purchase (OTP) cannot be issued before the official MOP date, we had to highlight this fact to prospective buyers who came to view the unit – meaning that the OTP can only be signed when the MOP has been fulfilled, which was weeks away. The other challenge was that there was a high chance of Cash-over-Valuation (COV) as the sellers’ asking price was slightly higher than the bank valuation that we received, due to the lack of transactions as a pre-MOP development with not much data to support the asking price.
Due to the unit being so well-renovated and will be newly-MOP-ed, there was a lot of interest as soon as our home tour video went live. Four groups of prospective buyers came to view in one evening, and the evening ended with offers from the last two groups. Because the offers came so fast, the sellers started becoming uncertain about their asking price even though they wanted the first-mover advantage. This led to a lot of distress and high intensity on the sellers’ end, due to the possibility that they might have priced their unit too low. There were some disagreements stemming from the difference in closing mindset, and also the fact that the buyer might walk away if they did not secure the deal immediately. Our team had to calmly manage their emotions, advising them based on our research and analysis but not pushing them into a decision at the same time. After a discussion, we decided to put up a fair counter offer of an additional $50,000 since the sellers had invested a significant amount into the renovations where high-grade quality materials such as Dekton table tops and Purion paint were used.
The eventual buyer was the last group that came to view. The buyer had already decided to offer at the asking price before coming to view, just based on what he saw on the virtual tour of the place. Because his previous deal fell through, the buyer did not need much assurance and had no qualms about the increment as long as he could secure the unit. And since the buyer was a Singapore Permanent Resident (SPR), we had to properly explain the COV component and the Additional Buyers’ Stamp Duty (ABSD) to determine whether he was ready for the purchase. We eventually closed the deal, setting the benchmark as one of the first few units at Sol Acres to be sold after MOP.
Even though the unit was sold within just one day of viewings, speedy transactions like these typically involve a lot of emotions and stress. It can lead to intense disagreements that can quickly get out of hand and sour relationships, which is why it is important to manage the anxiety and emotions of all parties involved. The biggest lesson we learnt from this deal was the importance of empathy and being sensitive to the clients while using the appropriate communication methods. As the direct buyer was also dealing with his own anxieties and emotions from losing a previous deal, it became even more crucial to understand and manage the concerns from both sides without them outrightly saying it.
The deal was conducted by Angela Yee and Wirdayu Safie, listing managers at PropertyLimBrothers. Speaking about their experience, they were surprised at how well they managed the sellers’ emotions and learnt a lot about handling different expectations from all parties in a transaction.
Closing Thoughts
When it comes to selling property in Singapore, it can be tempting to rush the process in order to close the deal quickly. However, it is important to remember that marketing your property hastily can lead to missed opportunities, lower offers, and even legal complications down the line. Taking the time to carefully plan your marketing strategy, showcasing your property in the best possible light, and considering all offers thoughtfully can ultimately result in a more successful and stress-free transaction. So while speed may be important, do not let it override your good judgement when it comes to selling your property.
If you are thinking about moving on to your next property, and need some advice or a second opinion about your property options, feel free to reach out to us here. We will be glad to assist you in planning and executing your next move based on your timeline and needs.
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