- Aaron Lin Property
8 'BULLSHIT' COMMENTS THAT PEOPLE MAKE WHEN THE PROPERTY MARKET IS AT THE HIGHEST POINT!
During this high point in the property market, what are some of the things buyers and sellers should be wary of? What advice is good advice and what might be self-serving when it comes from agents? Aaron goes through this with 8 points that he has consolidated, just for you!
Quality vs Quantity
The first situation we are wary of during this high market is when we hear of agents bringing clients to 5-6 viewings when they enquire. Especially when clients are enquiring about suitable properties for investment.
It's telling when the agent brings these clients to condos/projects where there are many units available for sale. In such a market, good projects would hardly have a lot of viewable units. Furthermore, prices for good projects and units tend to be higher by $100-200 psf. Hence, it's important for potential buyers to be careful when meeting such situations.
Rising prices for new launches
The next piece of potential BS that's heard is when people start advising for buyers to strike hard and early when purchasing new launch. Their argument is that there are no cheap units anymore, prices will keep rising and there's nothing less than 2000 psf anyway!
It might seem true that there are no units at less than 2000 psf, and that's because the projects this year are all in prime location with good units. Thus, before rushing in for new launches at whatever price that is quoted, it's still important to evaluate the project and what it's worth.
"Prices will keep increasing!", it's really not a new refrain.
More often than not, the key question to ask in a property deal is 'what price to buy?'. Many deals are being struck recently at record prices, and this tend to lead one to believe records will keep getting broken. If you are looking to become a 'record-holder', note that it's great if you believe prices are going to be increasing endlessly in time to come.
Be careful though, is that really going to be the case? One good thing to look at is the URA transaction records, and be skeptical of the property listing prices you see on Propertyguru and other platforms!
En Bloc potential
The discussion about En Bloc potential when buying a property has been discussed many times in Aaron's telegram group. Many En Bloc projects would launch this yea and many would launch at high prices. The people that make the deals will push up prices, giving more money so owners would be willing to sign and agree to En Bloc. What happens in this case though? High price eventually deters developers.
Thus, be careful when monitoring these units with En Bloc potential in mind.
Flip in 3 years
Buy a new launch and flip it after 3 years. Will history repeat itself? Purchases in 2018, 2019 can flip this year, with mostly En Bloc sellers gaining from this phenomenon. The developers paid off owners during collective years in 2018, 2019 and these owners then push their funds into the markets.
Nobody knew then that prices would increase due to Covid, creating the jackpot situation for developers. The question to answer then is whether this situation can happen for 2022-2025? Supply in 2022 are government land sales, with En Bloc launches being smaller properties and fewer in amount. to us, it's unfair to say history will repeat itself and that one is sure to successfully flip in 3 years.
Dangers in Rental
If you are a tenant, you had better seek professional advice. We are seeing the rise of crazy scams like asking for deposits before viewing. Agents know that such practices are scams, and there are rental problems abound, with cases of renting on Carousell souring as well. There are even agents that ask for commissions from tenants.
We recommend not taking such risks in a desperateness to rent. Get professional advice and make sure you safeguard yourself.
HDB prices are going up. However, Aaron is seeing more down-graders this year compared to up-graders. You find agents saying that valuations will keep going up, but it's vital to realise that this is just an assumption made by agents. There is no hard and fast rule to estimate valuations and no one can give any guarantees. Estimations come with a margin of error of 10-20%.
Regarding HDB valuation, it's important not to take someone's words for granted, and be sure to do your own research.
Last point to make today, some agents come up with 'funky' and 'funny' planning.
An example is telling clients that buy and sell can be done concurrently. How they do it is by asking for 3 months option period. To Aaron, he will never let his seller agree to 3 months option period.
Many situations arise out of a 3 months option, there could be cheques bouncing, withdrawal from sellers, or even landlords pulling out for various reasons, out of which 'price change' is a common one.
You might think the option protects you legally. But the truth is, legal action is and will be complex, we recommend safeguarding oneself against such 'funky' possibilities in advance.
These points that we have shared is our way of calling out the BS that's going around, and clarifying some advice and recommendations clients might hear about. Be sure to evaluate your own situation clearly to protect your own interests. Better still, engage a professional to help you!
Another highly charged and entertaining video by Aaron, calling out the BS! Check out the video for yourself.