Buying a HDB flat is an exciting process, whether you’re looking for your first home or you need to change to a bigger apartment or smaller residence. You’ll be exploring multiple apartments and imagining what life in them is going to be like.
Property buying and selling, however, are not always easy and straightforward processes.
There are specifics aspects of such interactions and transactions between buyers and sellers that get confusing and that result in the birth of various myths.
Today, we’ll try to debunk some of the most common and damaging myths that revolve around buying and selling HDB flats in Singapore
Myth 1: Buyers Pay More for Emotional Appeal
As human beings, we’re all affected by emotions.
While HDB flat purchases should be rational, most buyers will still let emotions interfere to a degree. As a result, sellers often believe that potential buyers will be willing to spend more on a property they like or that they’ve fallen in love with – due to location, the view, or just pure amazing home interior design.
This is not necessarily the case.
Even if a buyer falls in love, a price that doesn’t match the HDB flat’s actual valuation will stand in the way of realising a purchase. The reason is simple – a buyer will find it very difficult to get a sufficient loan for an apartment that is overpriced.
Hence, it’s crucial for sellers to be realistic when setting the price. Otherwise, the flat may stay on the market for a prolonged period of time, even if the interest levels from potential buyers remain high.
Myth 3: Increasing Property Prices Are Good for Sellers
Here’s another common assumption that is incorrect.
HDB flat owners think that an increase in property prices is a good thing. A general trend towards a more expensive market is indicative of one’s better ability to sell quickly and at a higher price.
This myth typically revolves around people who buy property as an investment when the price is lower and who decide to sell once the price climbs up.
If you buy a property for 500,000 dollars and you sell it for 600,000 dollars, you cannot calculate your profit as 100,000 dollars. There are several additional key factors you will have to take into consideration.
The commission of a property agent, renovation and interior design and maintenance charges over the years all play a role. Hence, the calculation is more complex. Sometimes, even if property prices increase as a result of market dynamics, you may find yourself incapable of generating sufficient profits through the sale of your HDB flat.
Myth 4: Renovating a Property Before Selling Will Always Bring a Return
A general rule of thumb is to carry out a good renovation before attempting to sell.
There’s a reason for this recommendation – properties that look new, fresh and modern will be easier to sell.
The key here, however, is to choose the right kinds of renovations.
You always have to do the calculation in advance. Find out how much each renovation is going to cost you and what the return on investment is going to be. If you spend way too much money on renovating, you will not see a return and you’ll in fact be losing money.
As non-professionals, most sellers find it difficult to differentiate between renovations that bring money and renovations that reduce profits.
If you don’t know how to enhance the appeal of your flat, you should definitely get in touch with a Singapore interior design company. Interior designers know which maintenance and renovation projects are most affordable and most capable of transforming/enhancing the appeal of the property.
Myth 5: Setting a Higher Price Leaves Room for Negotiations
Setting the right price is one of the most important aspects of selling an HDB flat.
Some HDB flat owners believe that asking for a higher price is a good strategy because it will provide some “wiggle room” for negotiations.
This, however, isn’t the case.
The explanation is similar to the rationale behind the first myth. If the asking price is too high, many sellers will not get a sufficient loan and they’ll be turned off from attempting to complete the transaction.
In addition, a high asking price will discourage numerous potential buyers from engaging with the buyer altogether.
An accurate valuation is very important and it can reduce the amount of time that the property is going to spend on the market. In fact, one of the best strategies is to get a professional involved and to have an impartial price determination.
Owners tend to overprice property because of the emotional attachment and the work done on the flat over the years. Often, however, these positives that the owner perceives as good things have very little impact on the actual value of the flat.
Some of the factors taken in consideration include the size of the property, the year the building was constructed, location, layout and even reputation of the property. As you can see, many of these factors aren’t connected to renovation and maintenance.
Take some time to acquaint yourself with the property market, whether you’re a buyer or a seller. Myths stand in the way of successful purchases and they could ultimately cost you a lot in the long run. When in doubt, consult professionals and have your questions answered before moving ahead.