I attended a launch of a new property project recently. There were a few hundred potential buyers. They were given a queue number and allowed into the show flat in batches.
Although the project had a few hundred units, the marketing consultants released only one floor at a time. The prices were not disclosed. They will only be given to interested buyers, on private negotiation. The buyers were told that of the units released earlier, more than 90% had been booked, of which a high percentage had already presented their checks for the booking fee. This arrangement created the impression of overwhelming demand for a limited supply.
When the price was finally told to me "as a privilege", it was 70% more costly (per square feet) than a similar 5 years condominium located 100 meters away. A buyer who is not aware about the market price might be easily misled into booking an over-priced property and acting under a stressed condition. Later, I learned that many of the buyers were allowed to give an unsigned blank check for their booking.
The above pracitces are deceptive. This is how a property bubble is created and buyers were misled into booking for an over-priced property.
Before you consider any property investment, do your research. Go to this website, www.easysearch.sg (Real Estate Data) and find out the recently transacted prices for similar properties in the vicinity. You can pay more for a new property but the difference should not be more than 20%.
Tan Kin Lian
Someone asked me why I was interested in a new property launch. I went there partly out of curiosity but mainly on the suggestion of my wife. She wanted to take a look at help our daughter to buy a property. This is probably the reason why many older people went to property launches too. Right?
ReplyDeleteThis is a very clear case sales agents using information to benefit themselves.
ReplyDeleteSome will hold initial launches to test the market. If the demand is high, they will jack up the price slowly in later launches.
I won't call it deceptive yet, it's just withholding of information so one is at the advantage (of the buyer).
If this is deceptive, withholding the cost of building a flat by HDB is also deceptive.
The real question is whether these agents deserve their salaries. The thing is, they don't really provide any value to buyers.
I had a business idea before that involves creating a eBay or classifieds type of website for selling properties, effectively eliminating these middle man. They just don't provide value at all, they themselves are the cost.
Mr. Tan,
ReplyDeleteIn the past, the developer will give you a price list that lists all the units with different prices reflecting the size, orientation and height. Now they dont disclose anything and you have to indicate the type you are interested and they tell you the price. It is very hard to compare even within the same condo and you definitely do not have information to compare with other condo. It is not transparant at all.
I am planning to buy a piece of land if I can earn enough in the next few yaers and build a large 3 storeys house to house my 3 sons and their families when they get married. I just do not want them to be house slaves for the rest of their lives if I can help it.
Hi Parka
ReplyDeleteI have already set up the website for buyers and sellers to get information about property projects. It can be found in www.easysearch.sg (Real Estate Data). It will develop into the eBay that you talk about. Give it a visit and help to promote it.
Hi 11:50 AM
ReplyDeleteThere are many old houses that you can buy and rebuild. I will try to get it listed in the RED portal ... www.easysearch.sg
It is customary to have price lists stating the stack, floor, and prices. All launches I attended have this document when i request to see it.
ReplyDeleteI am guessing this practice is particular to only one launch, the Gillman one happening now. An agent contacted me two weeks ago asking me to present bring cheque if I wish to go for the preview. There were no details, floor plans, stack layout etc. It is disappointing because the developer is supposedly a reputable one. And such "pressure" tactics by the appointed marketing agency is less than ethical.
Mr. Tan,
ReplyDeleteI went to a cluster housing project launch recently. Again, my experience is similar to 11.59am post.
When I asked for the details like built up etc, they then release the details based on unit you are interested. So I got the details. It has 5 storeys. Yes they count the basement with no window that have 2 tiny rooms and a yard with no windows so it has to be air conditioned at all time to be livable. The basement open into two car park space. The first floor is made up of the lounge/dining and a glass separated section as kitchen. Second floor is two bedroom with one toilet in the master and third floor is two more bedrooms with 2 toilets. The fourth storey is a rooftop garden and total floor space quote including the basement and rooftop is 3,000 sq ft and the selling price is 1.9 million but livable space is really the 3 storeys with about 1800 sq ft so it is 1,000 psf! or a floor area of abot 600 sq ft per floor!
So if one buy a semi-D in the same area with a land of 4200 sq ft, it cost about 1.5 million and say you spend 500k on rebuilding, you get more than 3,000 sq ft of livable space and a big piece of land. So if you can post information on old houses, it will help a lot of people.In fact, I am also looking at this as an option rather than paying the rediculous price.
This is how these creative accounting agents work hand in hand with developers to create false impressions. You can see them under different creative names in different forums generating waves to enrich themselves. Some years back when I was looking for a property this agent with a big Mercedes Benz brought me to see a condo in the east. The way he conducted the sale he has a 95% chance of closing the deal at a high price. He was able to use tactics like high pressure sales to lure the potential buyer capitalising on the average human greed and fear. Later when I was sitting in his Mercedes, he asked me what I do for a living. I told him I teach advance negotiation techniques to fortune 500 companies executives and he then muttered: "No wonder". The simple advice to follow is simply this. Do not buy anything on the spot, there is no such thing as no more supply, only no more money. Determine your own price based on value, which you can determine after some basic research. Do not go beyond your calculated price as agents will use your emotions to jack up the price. Always use the technique of having to consult your spouse to buy time. Some agents know this and insist that both you and your spouse be present, ever wonder why time shares promotions always want you and your spouse to be present so you have to make a decision on the spot? Just do not make a decision on the spot. Say you need to consult your father, mother or God, if necessary. Make it a philosophy never to make a spot decision. Whenever I buy something, the sales agent will always ask for a deposit. I will tell them my philosophy is no deposit. They will then say what if someone comes along and buy the last piece. My answer is always: "Congratulations, I will look for another piece" Remember, there will never be no supply, this impression is created by agents so they can pressurise you. There is only no money!
ReplyDeleteThink our developers have picked up a thing or two from their HK counterparts who are excellent practitioners of pressure selling.
ReplyDeleteAnonymous 1:38pm, you are right. I have also stopped looking for condos and instead focusing on buying a landed property for its relative "inexpensiveness" versus the rest.
Let me think about how to get owners and buyers of landed property to transact in the RED website.
ReplyDeleteMr Tan,
ReplyDeleteCan you list out the developers and their main contractor in your RED website for new condo projects?
I know of some established developers such as FEO, UOL, MCL and FCL using cheap foreign chinese main contractor to increase their profit margins but quality and workmanship so so only.
only government and big property players control the supply of houses and hence the prices, it is not in their interest to see depress prices
ReplyDeleteproperty buyers are disadvantaged no doubt but they can refuse to buy, it is understanbale that those who missed the run will cry fowl...
Most property agents that i met in singapore are really useless lots ,providing no value added service. I have bought and sold property with their help in adminstative stuff as for the rest of the equation they re of no use
we need the more professional agents , why should we pay this agents 1%?
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ReplyDelete