We may all agree that buying a house in this economy is expensive. But buying a house in Singapore is EVEN more expensive.
We thought very long and hard about how we could save money without compromising too much on our expectation. One particular item stood out: property agent fees!
Consider that resale flat prices are really expensive, and 1% of the flat price is at least a few thousand dollars worth in fees. Hence, it made perfect sense for us to skip the middleman and hunt for a house on our own.
If you do a quick search online, there are many articles sharing about how easy it is to go down the DIY route when it comes to purchasing a resale HDB flat.
As first-time buyers, we expected that the DIY route might be easy but surely not all sunshine and rainbows. However, we were still a bit surprised by how much we didn’t know or foresee.
How easy and smooth the buying process is really depends on your luck. But based on personal experience, some agents in the market may take advantage of the fact that you’re on your own to scare you into overpaying a fair bit.
Some may also simply ignore you because they would much prefer to deal with fellow agents directly.
1. You need to know all the processes & documents required.
Beware of: getting ripped off by sellers & their agents, missing important deadlines, and paying for items that you didn’t know about.
From personal experience, we found out that there are a ton of fees to pay for, which we didn’t know about until we were told to make payment.
There are also deadlines that we almost missed and timelines that we didn’t know we had to coordinate with the sellers. All of these are items an agent would help you to keep track and remind you about.
2. Be prepared to invest all your free time scouting properties within expectations.
Beware of: seeing multiple listings for the same flat on every portal, getting frustrated at EIP restrictions, and sighing at starting prices way beyond your budget.
Using property listing sites & apps is a convenient way of finding properties. However, the process gets frustrating when you realise that the different portals all feature the same few listings!
Prices listed are also a bit iffy because some actually list the starting price (i.e. they are most interested in prices ABOVE what they quoted!).
3. You may not know how much HDB thinks your house is worth – until it’s too late.
Beware of: struggling to filter through sales talk, writing multiple appeal letters to HDB to lower COV (cash over valuation), and realising you’re well & truly broke.
We checked the resale flat transactions in our area and felt that our price quotation was reasonable. Hence, we thought it was unlikely that we would pay a high cash over valuation (COV).
We couldn’t be more wrong! We ended up with a S$45k COV that we paid for because we really wanted the house & didn’t want to lose the OTP fee.
Naturally if we engaged an agent, they would have helped us to negotiate a lower price or advise if the flat was worth purchasing based on their selling experience.
4. You do all the negotiation work over everything & anything.
Beware of: the price war where only the sellers win, okaying extension of stay without agreeing what fees the sellers should cover, and a whole lot of ‘he said she said’.
This is quite straightforward. Naturally your agent (if you have one) would do the dirty negotiation work for you, otherwise you’ll need to hone your own debate skills.
What caught us off-guard was the fact that we didn’t think to clarify what fees should be covered under extension of stay, and we sometimes forgot to keep receipts of things we had previously agreed on.
However, we counted ourselves lucky that our sellers agreed to cover everything!
tl;dr
In a nutshell: if you’re thinking whether to engage a property agent, the three main considerations are time, effort, and negotiation skills.
If you’re not confident in any of the three factors, you might want to consider biting the bullet and paying the 1%. It’s definitely much better than paying even more for other unwanted costs!
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