Have you heard of this phrase?

“Hero will die first.”

Similarly, I like to share the same advice to homeowners who wants to quickly cash out of their development.

Don’t be in a hurry to become the first to sell especially if there has not been a lot of transactions present.

For some newly-MOP developments like 5-year old BTO flats and 5-year old Executive Condos – it is absolutely worth the the time to slow down and not quickly sell your property.

Let’s explore why.

#1: Lack of transaction volume

This is Waterwoods EC. You can see from these few transactions for the 1033 sqft units.

One unit was transacted at $1,007,000 in May 2021 when it just hit TOP.

Then just 5 months later, a similar size unit is sold for $1,130,000.

You can see the selling price slowly inching upwards as more transaction volume appears.

The result of waiting slightly longer? A difference of $123,000 in 5 months.

Here is another example at Ecopolitan EC.

Look at stack 13.

In Sept 2021, a unit was sold at $1,055,000.

In Nov 2021, a unit of the same size and same stack – was sold at $1,160,000.

$105,000 difference in 2 months.

#2: To support bank valuation, transaction volume is necessary

In general, valuation will tend to follow the most recent transaction data.

So assuming that valuation is $950K but you wish to sell at $1M.

What happens is that the buyer will have to fork out $50K in cash.

Some buyers can accept that but certainly not every buyer.

That $950K valuation acts an arbitrary cap and prevents you from maximizing your selling price.

So if there is not enough transaction data or the transaction volume is very thin – all future valuations will follow what has been set previously.

That is the benchmark set.

But with every new transaction – where capable seller agents are willing to set new price records on behalf of their clients – it inches up this cap to a higher level.

This was seen in the examples I shared above.

So let others go first if you are not in a hurry.

Learn from the experience of others and you can get a better chance to secure a better price.

Here is another example at Twin Waterfalls EC.

Same size and yet a $120K price difference in just 3 months.

#3: In a rising market, prices move faster than most agents can catch up with

In today’s market especially, what I am seeing is that prices are rising faster than what most agents can catch up with.

A lot of agents are selling properties based on last week’s or even last month’s prices.

Is this good? For the buyers perhaps.

But for these sellers who have to buy their next home, this inability to sell at “future” prices will reduce their margin.

And it becomes that much harder to purchase their next property as their margin is not enough to buy the property of their choice.

Imagine losing out on additional $50K to $100K – because the agent did not anticipate the increase in prices?

It can pay for about 6 months worth of rental or even renovation for the next home.

This is a recent HDB cluster in Sembawang that just hit MOP in 2021.

You can see the 4-room flat transactions are hovering in the $4xxk range.

But during this year in 2022, the average prices of the 4-room HDB went up to $5xxk.

How Long Should I Delay Then?

So as a seller, how long should you delay to sell your property?

Because delaying too long is also not a great idea because your next home might also have risen in price.

And while trying to maximize your selling price, you also lose out an opportunity to buy your next home at a great price.

I know because I’ve seen it happen. Being too greedy will also affect your chances to secure a good deal for your next home.

So this is where you need to use your judgment to justify whether is it worth to delay.

But unless you are very active in the market and very aware of how prices are changing throughout, this will be a challenge.

This is where an experienced and competent agent can help you decide.

If you have access to an agent who is:

• very active in the market who has a very clear view on what is going on
• has a lot of good relationships with other agents in their network
• has access to data and insights you might not possess
  

Then you can gain an additional advantage that others might not have.

Final Words

Just crossed the 5-year MOP mark?

Or perhaps the 3-year SSD mark?

Don’t be in a hurry to sell.

In fact, take the time to do some research and find out what similar units are currently selling at.

At the same time, don’t delay for too long.

While might be possible to get an additional $100K for your existing property but your next dream home flies away too fast for you.

Have questions on selling your unit a newly MOP development or concerned about being the first few units to let go?

Feel free to drop me a message with your questions.