5 mistakes Buyers make during property viewings
- Muhammad Norizzam Kamaruzaman
- May 26, 2020
- 6 min read
Updated: May 30, 2020
Viewings of property may look easy and basic or so it seems. Many negotiations fail due to these factors being neglected. Truth be told, even sometimes, agents overlooked on it too.
Successfully securing a unit doesn’t necessarily means you have gotten yourself the best deal. Sometimes even $10,000 and $20,000 does not mean that it’s the best “bargain” you could have clinched! Imagine that!
What we do know in a negotiation is that buyers and sellers have opposing demands; one wants it low and the other high. Who really gets the win then?
Here are some pointers that you as a buyer should note during property viewings. Let’s see if we can identify the steps to a good deal!
Emotions and Expressions
Not a lot of buyers know but your emotions and expressions play the most important role, more than you know! This can be seen as either be good or bad. Our faces can paint a thousand words. Yes, even a raised eyebrow will be mentally noted! What more an expression that shows excitement and interest.
Humans are visually inclined so more often than not hence we get excited in a viewing. Some buyers were seen to have expressed their comments at every positive aspect of the house; ranging from how beautifully renovated the unit is, the creative design of the layout to the scenic panoramic view of the horizon. Naturally when we fall in love with the features of any home, we failed to hide them.
Why is this an important factor is because it’s very telling of your interest and how keen you are. Sellers and their agents alike are noticing your every move. With that very fact, knowing you loved the unit, do you think the negotiations will be at your favour?
Other times, you might also stumble upon a less renovated unit, or one that isn’t necessarily the most well kept. Most buyers would just be turn off by this sight! But there are some that prefers to explore these lesser desirable options! Ever wondered why? Houses that comes with such conditions are usually priced slightly lower than the rest of its neighbouring competitors. This gives you an added advantage if you are looking to do up your own renovation from scratch to your taste, this could be a good snatch for you! That’s some cost saving tips for you. Most of the time, there are similar pattern that happens in every negotiation with lesser desired units from the Buyers. They tend to highlight the condition of the house and include that as leverage in their negotiation. It comes to a common understanding that naturally buyers are just trying to lower the price.
The sellers are fully aware of the state of their home. So, when you highlight that it is in a “bad condition” or “broken” it does not do any good to you, neither does it mean you can lowball an offer. Any negative comments could possibly hurt the owners feelings and we want to keep the relationship as healthy as possible. This is to ensure a smooth journey between both parties till the very end! You’d be surprised at the number of cases of buyers being chased out I’ve personally seen and heard of. Yes, chased out of the house! Therefore, it is important to be polite and respectful to the owner of the house. It’s always good to be nice to the person you’re buying from anyway.
Do not touch
As much as you would not like it when some one touches your personal belongings or opened your wardrobe or take any photos without any permission. Some things are a little bit personal and sensitive. We understand that we buyers want to look thoroughly on the conditions of ever corner of the house so that we can understand what should be done after we buy the house, after all, the renovation works and space planning are one of our key factors of the type unit we are looking for.
Hence, if necessary, do ask permission before we touch anything or take any photo or videos. This is so that we can maintain good relationship, thus smooth negotiations. We can always ask questions about the unit after the viewing is done. Notes will come handy for the viewings in case we forgot anything.
Bidding War
During a viewing, there are highly likely that you will be viewings together with others buyers, or for some case an open house that packs 15 groups! This is one of the strategy agents use to increase the demand for the unit. Imagine walking into a beautifully renovated house that checks all your boxes, fits your requirements of an ideal house and then you see another group of buyers looking at your dream home. That’s your competitor and it’s pressurizing especially when the other group has also expressed their interest.
Therefore, you got to make your move quick before the other party decides on your preferred unit. As much as buyers need time for considerations, thoughts and opinions of others on the house. But more often than not, it is the same time that they’ve taken up for deliberation that makes them lose a unit!
Other times, a bidding war may ensue when there are plenty of interested groups of buyers vying for the same unit. Competition, pressure against a ticking clock will only leave you anxious and the sellers grinning from ear to ear.
So time is of the essence when it comes to negotiations. Advice is, as long as the requirements are met Buyers should be firm with their decision. In this way, they need not go through the pressure and anxiety a bidding war promises!
Fastest fingers first; be the first to show your seriousness on the unit and make your offer. Being ready and showing seriousness shows you are prepared. Now the balls in the sellers court! Pass the urgency back to them while you wait. Rather than wait to see if your offer has been outbid.
Revealing your budget
It is the duty of the seller agent is to facilitate the sales of the house and to ensure that the transactions goes smoothly. It is common having an agent asking you 101 questions and one of the reason why is definitely to ensure that there will be no hiccups during the transaction if you decide to buy the unit. They will also want to ensure that buyers had everything ready (financially etc) for the purchase. Time are precious for some that has deadlines to get their house sold.
Hence, they will ask all the necessary question such as how much is your loan, how much is your budget, are you taking any grants etc. But not that you know by telling them, you are revealing your finance and at the same time revealing your maximum budget. Let say if your the house cost $400,000 and negotiable, but your budget is $500,000. How far do you think you can negotiate for? You will find yourself stuck in between on revealing or not to.
Hence, it is always advisable to engage a good agent to represent your purchase to avoid any chance to reveal. They will definitely saves you more.
Valuation
This is the most commonly asked question from Buyers. What is the valuations of the unit?
Valuation will determines how much CPF and Loan a buyer could use. Therefore, buying above the valuation price will results in a "Cash-Over-Valuation" aka COV. From the word cash, this will sound daunting to many buyers as they, especially first timer would want to avoid these and for some, are not prepared for it thus ended up forfeiting the deposit as we know, Buyers has to place their first deposit, option fee before they can apply for valuation.
We have to accept the fact that the valuation report do not tell you the actual value of the house anymore but only provide with the allowable usage of CPF and Loan. Therefore, we often ask ourselves what are the true valuation of a unit? How is it derived?
No one knows.
Few things we know that they varies from the location, size, floor level and many more. But one factor that buyer always forget, is its recent transacted. It plays a role in the actual value of the flat. Many times, Sellers or even their agents may be confident on the valuation, just because its high floor, renovated and bigger size etc. How accurate can they be? They too have their own interest, which is to get the best and highest price as possible. Are you prepared for the worst?
Therefore, it is still important to do your research on the market. Seek professional advice!
Good Luck!
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