Selling your low lease HDB

Client is 2 daughters in their late 30s and mother owning a HDB built since the 1973. They have been renting the place since the passing on of the father. As they want to upgrade to a condominium, they have to sell the hdb in the market. The house was nicely renovated and the sellers were looking at a premium price for it.

Case study:

We acknowledge the points that they have indicated as well which are also the key selling points for this unit, which is strong location near to Braddell MRT, corner unit and well renovated unit. However, the house is already running low on its remaining lease, there will be limited buyers in the market due to both loan and CPF usage restrictions. The sellers are optimistic that their unit is able to fetch a good price above the market value.

Later, we get an independent valuer to do a professional valuation of the place so that we can accurately ascertain the value of the property. The sellers were looking at $380k but the valuation report came up to be $330k, taken into consideration of the renovation they did. The surrounding comparable units were recently sold at a range of $300-$320k.

We went ahead to market the unit at $320k to test the market to see if there is any potential buyers. During the first two weeks of aggressive marketing through the 7 major property portals, flyers distribution, newspaper advertisement, facebook groups posting, mass sms broadcast to agents and buyers, we receive total 14 enquiries and 5 viewings. However, many of them find that the asking price of $320k is too high. During the first 2 weeks, there is 0 offers made.

After 2 months of marketing and weekly market updates to the seller, the property was eventually sold at $340k, $20k above the valuation. The buyer was one of the enquiries that came in during week 1 of marketing, however she went to look for other properties and didn’t make an offer then. We were lucky that we manage to reengage her back and assess that she’s probably the only buyer that is willing to pay a premium because her parents is just staying at the next block.

Learning points:

  • Pricing the property right is important in any market condition, we do not want to underprice the property, at the same time, we don’t want to overprice the property that we turn away genuine buyers
  • Understanding that sellers will always want the highest price, buyers will always want the lowest price. Managing the expectations well from both parties is one of the key reason why transactions can be done smoothly
  • Having an independent valuer to assess the place will take the guesswork out of the way, the seller may not believe the assessment of the agent, so it’s important to get a third party professional to evaluate the place.
  • Marketing aggressively within a short period of time will help generate many enquiries, from there we can identify which buyers are likely to be motivated to make a premium offer.
  • Buying and selling properties can be a frustrating and emotional event, having an objective and logical agent will help.