Good interior design and renovation need not be expensive
We are not battle-hardened real estate agents. We have not been following prices or reading tea leaves as much as we should. But we liked what we saw, and decided its about time. The property in question is in tip-top condition even if it’s 10 years-old, at a high floor, pool-side facing condo unit, and the development is directly opposite an up-and-coming train station that’s along the Downtown line. We negotiated directly with the seller and ended up with a price that’s 15% below bank’s evaluation. Is this a good price in today’s market? We don’t know, but we know the below negotiating techniques brought us one step closer to having our own roof after 10 years of nomadic existence.
1. Start with an end in mind
Remember our earlier sharing about approaching your banker first before viewing any apartment? We drew our “line” and bluffed ourselves into believing that we can’t afford anything higher than this. We told ourselves we can walk away if the seller doesn’t concede to our price. Keeping a “ceiling” helps us set the stage first with the seller’s agent and then to the seller. And at no point during our conversations did we waver. This sends a strong signal to the seller that we are for real.
2. Be candid with the seller right from the start
Common sense tells us never to show your cards at the negotiating table, but we did exactly that. We told the seller we are interested in this unit because we need to be close to our parents who are taking care of our kids when we are away at work. We told him we only have this budget and not anything more, because our financial resources are still tied down in China. We told him we already have our banker’s approval to take a loan of this value and all the paperwork is already done, only waiting for us to fill in the address, which we hope will be this unit that belongs to him. We were firm, we were sincere, without being patronizing nor intimidating. Our seller is a pragmatic Singaporean in his 50s who owns more than one property. By showing him we have nothing to hide, it pushed the negotiation process much faster.
3. Bring your cheque book
Singaporeans are eager to see results. Sellers want to see a cheque of 1% of your offer price, they take that as a show of sincerity. At our second viewing, we did just that. But just as we were writing the cheque, another group of potential buyers came to view the apartment. We thought all hope is gone, since we were making him an offer that’s 7% below his asking price, and 15% below the bank’s evaluation. Thankfully, those potential buyers came and went, but didn’t make an offer. The seller interrogated them slightly, and found out that they didn’t live in that side of town. He immediately arrived at the conclusion that they were not serious buyers. He took our cheque (phew…. ) and said he will discuss with his wife. So a cheque did help.
4. Build the emotional likability
We are humans after all, even if there’s always some friction between sellers and buyers. We think what sealed the deal, besides the quick offer, was that the seller saw us with our two kids both times we went to view the apartment. He started chatting with us and shared his story of how he built his family home over the last 20 years by investing into one property over another so that they can achieve their financial freedom today. It was an inspiring story for us (we want to be like him!). And we shared with him how we left Singapore in search for the unordinary and ended up in China for the last 10 years. As the chats dragged on at his apartment, we discovered that we shared quite some similarities. It became easier when we started negotiating, because we felt like we knew each other well enough to push the right buttons.
5. Your banker is your new BFF
Your banker can be your BFF. In our case, we were very firm in not inching the offer price up, like most negotiation in real estate goes. And we used our banker as an excuse for not able to offer more. We were lucky as well, because we learnt that someone else had offered 10% higher than what we were able to give, but that person’s home loan application was rejected so the sale could not proceed. The seller was pleased that we have already gone through our bankers, and knew exactly what our “approved” ceiling was. He was a wise and decisive man. He knew in today’s market sentiment, it’s better to sell than to hold on into the unknowns.
So that’s how we came to finally owning a place of our own. Our next big job is to get it refurbished and we’ll be ready to celebrate another new season in life.