When the market is soft, it’s time to accept reality and not expect to sell your property at prices that were projected two or three years earlier.
Property transactions seen declining, prices to remain flattish
The property market has been in a grind this year and according to projections, it’s not about to free up any time soon.
According to a report early this year by research house JF Apex Research, property transactions are expected to decline by about 10%, with house prices remaining flattish or rising slightly by 3% to 5% upon the implementation of the goods and services tax (GST) on building materials.
Lo and behold, you need to part with that house of yours now. Bad timing? Definitely! Zero chances of selling? Well, not necessarily.
The following are some tips to help you dispose of your property in a slow market.
Be realistic with the selling price
When the market is soft, it’s time to accept reality and not expect to sell your property at prices that were projected two or three years earlier, advises PPC International Sdn Bhd chief executive officer Siva Shanker.
“Don’t be unreasonable with your asking price. Many buyers, especially the flippers (those who buy with the intention of selling it later a higher price once the properties have been built) will try selling it at the price they were promised a couple of years back.
Chan: Get (your property) occupied, even if at lower-than-usual rental rates.
“But because the market is soft, they end up waiting months and months but nothing happens. Better to accept reality, save yourself the headache of waiting and lower the price,” he tells StarBizWeek.
Erik Folgate, in his article Four Tips For Selling Your Home In a Fallen Housing Market on financial education website, moneycrashers.com, says undercutting the market is the one thing that most sellers will do last.
“Sometimes we all need to face reality, and the prices of two years ago are definitely no longer the prices of today. List your house 10% to 15% lower than the other houses on the market in your area, and you’ll get a lot of attention from buyers.
Spruce it up
A house that’s in good condition will sell better than one that’s in dire need of repair, says Siva.
“A secondary property, even if it looks like a dumpster, will still sell when the market is good. But when it’s not, you might have a problem.
“Spruce it up. Repair what needs fixing and it will be more attractive to potential buyers.”
Folgate says the first places you can start is the kitchen and the bathrooms.
Siva: ‘Don’t be unreasonable with your asking price.’
“These are the most expensive rooms to update, but they stand out the most to potential buyers. And if you’re going to update your home, do it right. There are ways to save money remodeling your house, but just because you’re putting in new materials doesn’t mean it looks good.”
When it comes to the kitchen, Folgate advices buyers to get stainless steel appliances.
“It has the most modern look, and the prices really aren’t that much more than black and white. Buyers also love to see granite countertops.
“Your budget may not have enough money for a slab of granite, so look into using granite tiles.
“They are inexpensive, and they look great. You don’t have to replace your cabinets, unless they are in really bad shape, so look into refacing or painting them.”
Marketing is crucial - and could either make or break the sale, says Siva.
“The best person to help you market your property is a certified estate agent. Be sure to appoint one that’s registered with the Board of Valuers, Appraisers and Estate Agents Malaysia. They also have a special tag to verify this.
“These days, many people are involved in property, so plenty of sellers will go to some broker or their favourite nephew.
“But what these guys will end up doing is place an ad in the papers for you and wait. This, anyone can do.”
Other than placing ads, alternatively, Siva says the seller could try conducting “open house” events to allow buyers to inspect the property.
“Have an open house, say from 9am to 5pm for people to have a look at your property.
“Clean it up to make it look more appealing. It’s essentially like how developers hold a property launch with a show unit, but on a smaller scale.”
Siva says that having “a number of people” on the premises at one time will also help give off that psychological feeling that there is a demand for that property.
“When you’re there and you see a lot of other people displaying similar interest in the property, there’s the perception that someone else might buy it before you. It’s the herd mentality.”
More buyer incentives
With buyers a little hard to come by when the market is slow, providing incentives that can sweeten the deal is a good way to help push your property.
Buyers love to feel like they are receiving something for free, says Folgate.
“With the sale of your house, include a free home inspection, pay a portion of the closing costs. You can be as creative as you want with this tip,” he says.
Siva concurs: “Give your buyer more favourable terms to the deal.
“Perhaps, a lower downpayment or a longer period to complete the sale. If you’re not willing to compromise, you might lose a potential buyer.”
Rent it out
If, after everything, you’re still having problems disposing of your property, then consider renting, says SK Brothers Realty Sdn Bhd general manager Chan Ai Cheng.
“Rent it out anyway. Get it occupied, even if at lower-than-usual rental rates. If you’re still paying off your mortgage, the money coming in will still help you service the loan,” she says. - By The Star