The Singapore private property market has been on the upward trend despite the on-going COVID-19 pandemic. Private home prices in Singapore went up for a 4th straight quarter, increasing by 2.9% in Q1 2021.
That was the highest quarterly increase since Q2 2018, when private residential prices rose by 3.4% prompting the government to impose cooling measures in July that year.
Year on year, private home prices have jumped 6.2%, raising speculation that a fresh round of cooling measures might be happening soon. So if you are concerned about property curbs that could be implemented, perhaps it is time to cash out on your investment or to right-size.
Selling your private property is not as complicated as selling a HDB flat, as you are not as restricted by public housing requirements such as resale levy, MOP, ethic quotas etc. That makes it easier to sell it yourself without the services of a proeprty agent and in the process, saving a ton of money on agent commission. As long as you are the owner of a private property for more than 3 years, it should be smooth sailing.
However, if you are an owner of an Executive Condominum (EC), then it’s a slightly different scenario. ECs are a hybrid of public and private housing. They are full suite condos with complete facilities and amenities such as swimming pools, clubhouse, tennis courts, playgrounds etc. They resemble private condos and are enclosed within a gated compound with security guardhouse and services. They are built and sold by private developers, but at a slightly lower price as compared to a private condo because their land prices are subsidised by the Government.
For ECs bought at the launch, they are subject to HDB public housing regulations, such as a Minimum Occupation Period (MOP) period of five years, after which you can sell to Singapore Citizens and Permanent Residents only. The EC will become fully privatised once it reaches 10 years only and then, it can be sold on the open market to anyone including foreigners.
So if you are a current owner of an EC for more than 10 years or a owner of a private condominium, and you are thinking of selling it, either to cash-out or to right-size, here is the complete guide to the selling process.
Step 1: Market Research
Firstly, in anything you want to do yourself, you need to do market research. You need to know the procedure, forms to fill up, documents to submit, etc. You will also need to know what is the estimated value of your property so that you can set a realistic selling price.
We all know that all sellers want to sell high and all buyers want to buy low, so it is important to price your property accurately to make sure you receive enquiries and that in turn, will speed up the sale process.
For the latest transactions within your development as well as surrounding comparable projects, you can find the data from the URA website. Here, you can find past transactions by individual developments, with all the relevant information such as date of sale, size, unit price by psf, floor level etc.
Step 2: Pricing Your Property
How you price your property to sell is a huge factor in determining long how your property could be on the market. Reasonably priced listings tend to get more enquiries and viewings and transact faster.
For an estimated value of your property, you can use computer generated estimates such as Mogul.sg’s M-value that uses an algorithm to provide an estimated value. You can also check out listings from various property portals for similar property type and see how much the other owners are asking.
However, for a more accurate value, you can engage a licenced property valuer to conduct an on-site valution. This would be the most accurate way to price your property accurately.
Step 3: Make Improvements To Your Home
Once you have decided on a selling price, the next step is to make improvements to your home. Selling your house with leaking taps, broken furniture and spoilt lightings is not going to work. Potential buyers viewing your home would want to visualise themselves living there.
So, ensure that everything is in good working order. Items not in working condition would most likely put off potential buyers or attract a much lower offer. If you home is in need of repairs, potential buyers would definitely want to lower the price as they have to cater for the renovation costs.
Before any viewing, ensure that your home is clean, neat and tidy.
Remove clutter so that the place look spacious and liveable.
Keep the bathrooms and toilet clean and free of odour.
In the kitchem area, hide all cooking essentials so that the kitchen looks bright and organised.
Keep the kitchen oil-free and free from cooking odours so as not to turn-off the potential buyers.
Remember that it is important to leave a strong impression as they are buying their dream home.
Step 4: Create a Virtual Tour
In this internet era, you should consider doing a virtual tour of your property to allow potential buyers to view the property first without having to visit.
Most virtual tours are 360 degree virtual walk-through of the property and allows potential buyers to view the whole unit without leaving the comfort of their sofa. You can also email the virtual tour to your contacts and potential buyers, and remember to include it in the online advertisements. The virtual tours will complement any photos you have taken and it will definitely make your property attractive and liveable to potential buyers.
Step 5: Start Your Marketing
Currently, there are many channels and many property portals that you can market your property for sale. Most of them allow searches by property type, district or location, budget and features. So when listing your property, be sure to include as much information as you can. Other than the essential information, you can add in any special features of your home or any unique selling point that will attract potential buyers.
Most people start their home search by browsing the internet and that means they will be checking out the photos you post. Make sure to have multiple photos attached to your listing and showcase the strong points. If you have an island kitchen, post a photo of the island kitchen.
Step 6: Stay Contactable
Once you have all the above done, remember to have your mobile phone switch on at all times to answer to any enquiries.
Be prepared to arrange and conduct viewings especially on weekends as that is when most people are not at work and able to go for viewings. When a potential buyer makes an offer, be prepared to negotiate as most buyers will definitely want to bring the price down.
Step 7: Negotiation
Most potential buyers will try to negotiate down the selling price. You should already have in mind the minimum selling price and reject those who go below. Again, it depends on your situation and how quick you need the transaction to be completed.
Engage a Conveyancing Lawyer
A property transacton is certainly one of the biggest financial commitment you are likely to make, therefore, it is certainly wise to engage a lawyer to protect your interest. A conveyancing lawyer can advice and execute the legal processes concerning the transaction. Legal fees are typically in the range of between $2,500 to $5,000. When you have a confirmed buyer, one of the lawyer’s first tasks is to vet the option to purcahse (OTP).
OTP And Option Fee
When you have a potential buyer, an OTP will be issued to him/her and they have 14 days to confirm their purchase and enter into a contract for the sale of the property. You should also secure an option fee which is usually 1% of the purcahse price as downpayment. Once an OTP is issued, you cannot engage in other negotiations with other potential buyers during the14-day validity period.
Excercise The Option To Purchase
When the potential buyer exercise the OTP, the sale process is offically underway. However, in the event that the buyer does not exercise the OTP, you are entitled to keep the option fee.
Take note that if you are selling the property less than 3 years after you purchased, you are liable to pay a Seller’s Stamp Duty (SSD) of 4%, 8% or 12%. If you are selling within the first year of ownership, the SSD is 12%. Within the second year, the SSD is 8% and 4% if it is within the third year. You need not pay any SSD if you are selling beyond the third year of ownership.
Step 8: Inspection Of The Unit
In the meantime, you should start moving your things out and ensure that the place is in good condition. Once that is done, you can invite the buyer over to conduct a inspection to confirm vacant possession before the close of the sale.
Step 9: Completion Of The Sale
This is the part where your lawyer will be the busiest, settling paperwork and adminstrative stuff. On the day of the sale completion, hand over the keys to the new owners.
Selling a private property by yourself is not as complicated as selling a HDB flat. It is fairly straight forward and you are in control of the whole process, from pricing, to listing, to viewing, negotiating and closing. As long as you engage a lawyer to take care of the legal matters, it should be smooth sailing and you get to save on paying the agent’s commission.