Residential projects within 500m radius of the new stations are set to enjoy a huge gain in home prices. They include projects like The Calrose, Far Horizon Gardens, Thomson Grove which are right next to the future Lentor MRT station. The Gardens at Bishan and the Faber Garden Condominiums are similarly right smack besides the upcoming Sin Ming MRT station. Some projects in the city will have even more accessibility. The Equatorial will be right next to Stevens MRT station, while owners of The Trillium, The Cosmopolitan and Yong An Park will rejoice now that the Great World MRT will be right smack besides them. In general, if the development is on a 99 year lease, they should be less than 10 years old to enjoy capital appreciation. However, with the current inflationary pressure and land shortage, land prices might not drop even if they are older 10 years on. Throw in the current economic doldrum however, prices might indeed suffer a drop. It has been advised that the best time to buy a unit next to an MRT could be a year or two before the station opens as this anticipates the larger price gain that typically happen only after the station is opened.
Showing posts with label Create Wealth through Property. Show all posts
Showing posts with label Create Wealth through Property. Show all posts
Saturday, September 1, 2012
Tuesday, May 29, 2012
UK Tax change will affect buyers of properties
Recent changes in the UK tax scheme will see Singaporean investors in the UK paying higher stamp duties and other new taxes, according to a media report. The tax changes may be particularly hard on investors who acquired properties worth more than £2 million (S$4 million) using a company, compared to a standard purchase. For instance, a proposed annual charge will be implemented to both existing and new homes valued at more than £2 million (S$4 million) held by companies. The changes will likely take effect in April next year.
This will impact the increase in demand for properties between £1 million (S$2 million) and £2 million (S$4 million) where the normal rates of stamp duty without the annual tax or capital gains tax exposure, are stipulated. Several investors are also eyeing commercial property, which is not affected by the tax changes.
The consultant company, which is currently marketing London's Kensington High Street, is JLL. An average price of the unit sold cost between £1.5 million (S$3 million) and £1.9 million (S$3.8 million).
Source: Yahoo Finance
This will impact the increase in demand for properties between £1 million (S$2 million) and £2 million (S$4 million) where the normal rates of stamp duty without the annual tax or capital gains tax exposure, are stipulated. Several investors are also eyeing commercial property, which is not affected by the tax changes.
The consultant company, which is currently marketing London's Kensington High Street, is JLL. An average price of the unit sold cost between £1.5 million (S$3 million) and £1.9 million (S$3.8 million).
Source: Yahoo Finance
Monday, January 10, 2011
Wednesday, October 13, 2010
Buying a home now can be tough..
Buying a home is the biggest purchase most of us will make in our lives. Yet many people rush to buy a property with less preparation than they would planning a holiday. This can have financially disastrous consequences, especially in the light of new measures announced by the government on August 30th.
1. Decide whether you want to rent or buy
Buying a home is often an emotional decision. That’s fine – just make sure it’s a rational one too. Honestly ask yourself if you need to buy a home, and whether renting might be a viable option.
2. Calculate how much you can afford
First look at how much money you currently have, including cash and CPF. Note that based on the new measures, if you already have at least one loan outstanding, your minimum cash outlay will increase from 5 percent to 10 percent. Next, figure out how much you can borrow, taking all your outstanding debts into account. You can work with a banker, or use the affordability calculator available on LoanGuru : ( https://www.loanguru.com.sg/mortgage_affordability_calculator). Most banks will only lend up to a 35-50 per cent Debt Service Ratio (your total debt payments divided by your monthly income).
3. Figure out what sort of home you want
What are your current and future housing needs? For example, a newly married couple that buys a studio or one bedroom unit might find within a year or two that they need a two or three bedroom apartment once a baby is on the way. Would you prefer HDB or private property, if you can afford it? Which districts or areas do you prefer to live in? What are the amenities and public transportation options you want?
4. Build a list of options
You can choose to either use a buyer’s agent and/or go DIY. Look at both options offline (e.g. classified ads in the newspapers) and online (property websites) to get the largest pool to choose from. Based on what you’ve figured out from Steps 2 and 3 above, come up with a list of potential projects to consider.
5. Do market research and narrow down your choices
You can check the recent transacted prices of these projects from the PropertyGuru website. Or alternatively go to the buttons at the bottom of this web-site: Go to HDB Latest Price or Condo Latest Price to compare prices there with surrounding projects. Compare the transacted prices with the asking prices. If you are buying for investment, look at the market rents and rental yields. Eliminate the projects that do not look attractive.
6. Go for lots and lots of property viewings
Based on this smaller list of projects, arrange viewings of at least a few different units in each project. It’s helpful to take photos and notes to help you remember what you saw. Visit each project at different times of the day and night to see if it is noisy or otherwise unpleasant. Narrow down your list to your top few units and do a second viewing if necessary.
7. Get indicative valuations and your mortgage pre-approved
Don’t miss this critical step! Before you make an offer, ensure that you have gotten an indicative valuation from a bank and an in-principle approval for a mortgage. You can approach the different banks yourself or use a mortgage broker to save time. Based on the new measures, if you already have an outstanding loan, your Loan To Valuation (LTV) limit has been lowered to 70 percent from 80 percent, so you’ll need to cough up more cash. Also, banks will only lend to you based on the LOWER of the valuation limit or purchase price, so if you are buying above the bank’s valuation, you will need to pay the difference in cash. If you are selling your existing home to purchase a new one and hope to borrow at 80 percent LTV, you now need to present proof to qualify (in the form of a signed purchase agreement for your current home and certification showing that stamp duty for your existing property has already been paid for by the buyer).
8. Make an offer and negotiate the purchase
Once you get the indicative valuations and at least one pre-approved mortgage from the bank, you can then make an offer knowing you can borrow what you need. Please be prudent!
There exists a number of buyers who have lost their deposits because they realised later that banks would not finance their purchase, unfortunately. When negotiating the purchase price, it helps to have a number of options on hand so you are not forced to overpay due to a lack of options.
9. Sign and exercise the Option To Purchase
If the seller accepts your bid, typically you have to put down a 1 percent deposit to get the Option To Purchase (OTP), and have 14 days to exercise it, by which time you will have to pay another 4 percent of the purchase price. Make sure you have the funds on hand to do so. Once you get the OTP, liaise with your conveyancing lawyer and mortgage banker to settle the procedures.
10. Complete the sale and collect the keys
Before the completion date, do an inspection of the home to confirm that all agreed on fixtures and items are still around. On the date itself, collect the keys and check that you have a complete set. Congratulations! You are now the proud owner of a new home.
Saturday, January 31, 2009
Sunday, April 20, 2008
You can take a Cash-Out loan from your home
April 20, 2008
You can take a cash-out loan from your home
By Bryan Lee, Economics Correspondent
As a mortgage war breaks out among Singapore banks, homebuyers have emerged the clear winners as lenders slash interest rates to grab new customers and retain existing ones.
Rates have plummeted to less than 2 per cent. This means borrowers are effectively getting free cash as sky-high inflation means their future repayments are worth a lot less than the initial loan.
That is great, of course, for young couples buying their first home and moneyed investors looking to take advantage of the cooling property market. But they need not be the only ones reaping the spoils of the rate-cut battle.
Those of us who already have a roof over our heads but are not ready to take the plunge on another property can still benefit from the rate slashing that is going on. If you have a private property that is at least partly paid up, you can consider taking a loan, using the paid-up bit of the house as collateral. Often called a home equity loan or a cash-out loan, this facility is pretty much like a mortgage, with similar rates and terms.
But instead of using the money to pay for a house, you can use the cash any way you like - whether to splurge on a new BMW, pick up some undervalued stocks or finance that one-man business which you run out of your study.
As mortgages are just about the cheapest loans available in town, this slightly off-beat idea could yield some interest savings.
It is also one way to cash in on the recent property boom without selling your house. If you own a house that is now worth more than what you had bought it for, banks will be willing to lend you more money than before as the collateral base has grown.
These property-backed loans are common in developed countries, from the United States to Australia.
But bankers say conservative attitudes towards credit and a certain sanctity Asians ascribe to their homes mean relatively few people, in Singapore and in the region, have taken advantage of this cost-saving option.
So far, equity loans in the local market are used mostly by entrepreneurs as a cheap way to finance anything from business expansions to day-to-day transactions. But with mortgage rates so low - and they may fall further - it might be time to take another look at tradition.
Ignoring absurdly low first-year teaser rates, home loans are now going for between 2 per cent and 3 per cent in interest charges. Add a small premium that is typically charged, and equity loan rates are now around the 3 per cent mark, say bankers.
This is clearly cheaper than unsecured credit lines, where rates go into double digits. It is also cheaper than loans for small businesses, which typically face rates of between 7 per cent and 8 per cent.
What about car loans? At 2.5 per cent, they look cheaper. But interest for these is charged on the full loan amount throughout the tenure of the loan. In contrast, regular loans charge interest based on the outstanding principal as the loan is repaid. The effective rate for a car loan is thus roughly about twice that of the advertised rate.
Standard Chartered Bank general manager for lending, Mr Dennis Khoo, says that for a $40,000 loan stretched over six years, interest savings could come up to about $2,000, if one took up a home equity loan instead of a regular car loan.
Sounds good. So, how does one go about getting an equity loan? How much can one borrow?
The process is largely similar to that for a regular mortgage.
Take, for example, a $1 million house. A bank would typically allow for total borrowings on the house of up to 80 per cent of the property's value - or $800,000.
If there is an outstanding mortgage of $300,000, the biggest equity loan that can be granted would be $500,000. But if the home owner had also used $200,000 of his Central Provident Fund savings to pay for the house, the maximum would be $300,000. This is because if there is a default and the house is sold off, proceeds will first go towards repaying the mortgage and replenishing the owner's CPF account, before they can be claimed by the equity loan provider.
Besides home valuations, banks will also look at the borrower's income to make sure he can service the monthly instalments, given his existing financial commitments.
But before you dash out to the nearest bank branch, remember that while they are cheap, equity loans should not be taken recklessly. To cop a familiar slogan: Low interest does not mean no interest.
In fact, more caution is needed as what is at stake may be the home that you live in. Furthermore, bankers warn that a property market downturn may prompt lenders to pull back on the loan as the value of the collateral falls.
If anything, the ongoing financial crisis is a stark reminder of what happens when credit is abused.
The lure of cheap credit, along with a housing boom, led American households to overspend massively in the past decade. Now that the housing bubble has burst, they are finding themselves a lot shorter on cash, with a great number struggling to keep their homes from being repossessed by their lenders.
The point is that one should not let the promise of 'a good deal' override prudence and common sense. The equity loan is best seen as a way to reduce financing costs that you would have incurred anyway. Taking on an unsustainable financial burden just because it is cheap can turn out to be a costly decision.
So be shrewd with your borrowing, but be wise with your spending as well. Or else, you may find that splashing out on that flashy convertible may leave you all washed up - and without a roof over your head.
You can take a cash-out loan from your home
By Bryan Lee, Economics Correspondent
As a mortgage war breaks out among Singapore banks, homebuyers have emerged the clear winners as lenders slash interest rates to grab new customers and retain existing ones.
Rates have plummeted to less than 2 per cent. This means borrowers are effectively getting free cash as sky-high inflation means their future repayments are worth a lot less than the initial loan.
That is great, of course, for young couples buying their first home and moneyed investors looking to take advantage of the cooling property market. But they need not be the only ones reaping the spoils of the rate-cut battle.
Those of us who already have a roof over our heads but are not ready to take the plunge on another property can still benefit from the rate slashing that is going on. If you have a private property that is at least partly paid up, you can consider taking a loan, using the paid-up bit of the house as collateral. Often called a home equity loan or a cash-out loan, this facility is pretty much like a mortgage, with similar rates and terms.
But instead of using the money to pay for a house, you can use the cash any way you like - whether to splurge on a new BMW, pick up some undervalued stocks or finance that one-man business which you run out of your study.
As mortgages are just about the cheapest loans available in town, this slightly off-beat idea could yield some interest savings.
It is also one way to cash in on the recent property boom without selling your house. If you own a house that is now worth more than what you had bought it for, banks will be willing to lend you more money than before as the collateral base has grown.
These property-backed loans are common in developed countries, from the United States to Australia.
But bankers say conservative attitudes towards credit and a certain sanctity Asians ascribe to their homes mean relatively few people, in Singapore and in the region, have taken advantage of this cost-saving option.
So far, equity loans in the local market are used mostly by entrepreneurs as a cheap way to finance anything from business expansions to day-to-day transactions. But with mortgage rates so low - and they may fall further - it might be time to take another look at tradition.
Ignoring absurdly low first-year teaser rates, home loans are now going for between 2 per cent and 3 per cent in interest charges. Add a small premium that is typically charged, and equity loan rates are now around the 3 per cent mark, say bankers.
This is clearly cheaper than unsecured credit lines, where rates go into double digits. It is also cheaper than loans for small businesses, which typically face rates of between 7 per cent and 8 per cent.
What about car loans? At 2.5 per cent, they look cheaper. But interest for these is charged on the full loan amount throughout the tenure of the loan. In contrast, regular loans charge interest based on the outstanding principal as the loan is repaid. The effective rate for a car loan is thus roughly about twice that of the advertised rate.
Standard Chartered Bank general manager for lending, Mr Dennis Khoo, says that for a $40,000 loan stretched over six years, interest savings could come up to about $2,000, if one took up a home equity loan instead of a regular car loan.
Sounds good. So, how does one go about getting an equity loan? How much can one borrow?
The process is largely similar to that for a regular mortgage.
Take, for example, a $1 million house. A bank would typically allow for total borrowings on the house of up to 80 per cent of the property's value - or $800,000.
If there is an outstanding mortgage of $300,000, the biggest equity loan that can be granted would be $500,000. But if the home owner had also used $200,000 of his Central Provident Fund savings to pay for the house, the maximum would be $300,000. This is because if there is a default and the house is sold off, proceeds will first go towards repaying the mortgage and replenishing the owner's CPF account, before they can be claimed by the equity loan provider.
Besides home valuations, banks will also look at the borrower's income to make sure he can service the monthly instalments, given his existing financial commitments.
But before you dash out to the nearest bank branch, remember that while they are cheap, equity loans should not be taken recklessly. To cop a familiar slogan: Low interest does not mean no interest.
In fact, more caution is needed as what is at stake may be the home that you live in. Furthermore, bankers warn that a property market downturn may prompt lenders to pull back on the loan as the value of the collateral falls.
If anything, the ongoing financial crisis is a stark reminder of what happens when credit is abused.
The lure of cheap credit, along with a housing boom, led American households to overspend massively in the past decade. Now that the housing bubble has burst, they are finding themselves a lot shorter on cash, with a great number struggling to keep their homes from being repossessed by their lenders.
The point is that one should not let the promise of 'a good deal' override prudence and common sense. The equity loan is best seen as a way to reduce financing costs that you would have incurred anyway. Taking on an unsustainable financial burden just because it is cheap can turn out to be a costly decision.
So be shrewd with your borrowing, but be wise with your spending as well. Or else, you may find that splashing out on that flashy convertible may leave you all washed up - and without a roof over your head.
Before you Refinance Your Home Loan
April 20, 2008
Before you refinance your home loan... The current downward trend in home loan rates provides a compelling reason for home owners to review their mortgage packages.
Lorna Tan looks at five things to consider when refinancing your home loan
WITH interest rates in Singapore still falling and the property market turning quiet, banks are now gunning for the mortgage refinancing business.
Refinancing means replacing your current mortgage with another that comes with lower interest rates. This can be done with the same bank or by switching to another bank.
Many home owners are now considering this because the Singapore Inter-bank Offered Rate (Sibor) has fallen from over 3 per cent to below 1.3 per cent. Sibor, the rate at which banks lend to one another, is a key component used in setting home loan rates.
Some home owners have taken the bait. At HSBC Singapore, for example, refinancing applications have increased by more than 50 per cent in number over the past three months.
Other banks, such as United Overseas Bank, have been circulating new refinancing packages by mail to home owners. But before you take the plunge, you should be aware that refinancing a mortgage comes at a cost. Penalties could be imposed if you terminate your housing loan early with your existing lender, and you could incur legal fees if you refinance the loan with another bank.
Balance your options
A mortgage with a lower interest rate might seem more attractive, but before you refinance your loan, consider these factors:
a) Lock-in period
b) Penalty for early loan redemption
c) Conversion fee
d) Legal subsidy
e) Choice of fixed, variable or interest rate-linked rates
f) Cash rebates
Flexibility to make partial loan redemption
a) Free fire insurance
b) Affordability
Five things to note before you switch:
1 When you should consider refinancing
Scenario 1
The savings outweigh the costs of refinancing. In other words, do your sums first.
Scenario 2
You do not plan to sell your property within the next 12 months.
Maybank Singapore's head of consumer banking, Ms Helen Neo, said it does not make sense to refinance if you plan to sell your home in the short term.
'Home owners have to pay redemption fees, and even refund legal subsidies or cashbacks to the banks,' she said.
Mr Dennis Ng, the founder of mortgage consultancy portal www.HousingLoanSG.com, added you typically need to give three months' notice to your existing bank before switching. If you sell your property within nine months, say, you will enjoy interest savings for only six months. Your savings might not be much higher than the refinancing costs.
2 What refinancing will cost you ?
With the same bank
Within the lock-in period, Check if your package has a lock-in period. During this time, usually two to three years, you have to pay a penalty if you withdraw your loan. It's usually 1-1.5 per cent of the outstanding loan amount. Also, there is a conversion fee of $500 to $1,000.
Outside the lock-in period : The cost is just the conversion fee.
With another bank
With banks pulling out all the stops to garner a larger slice of the home loans market, it is worth your while to shop around. DBS Bank, for example, has customised packages that subsidise penalty payments, while Standard Chartered Bank (Stanchart) is repricing home loans down for existing customers on selected packages.
OCBC Bank's head of consumer secured lending, Mr Gregory Chan, encourages customers to talk to their lenders first before leaving for another bank. This is because the actual charges incurred could vary depending on various factors, which could include the time till the lock-in period expires and the customer's business relationship with the bank.
Within the lock-in period
Besides having to cough up a penalty for early loan redemption, you will have to refund the subsidy on legal costs provided by your current bank. Capped at $2,000, the subsidy is calculated based on 0.4 per cent of the loan amount, plus the cost of the $500 stamp duty. Most banks will offer a subsidy of up to $2,000, depending on the loan amount.
If your loan amount is, say, $500,000, the bank is likely to have given you a subsidy of $2,000.
Outside the lock-in period
Normally, you don't need to pay your current bank penalties or administrative fees. However, you might have to reimburse the bank for freebies you received when you first took out the loan. These could include legal subsidies, free fire insurance on the property and promotional shopping vouchers, said Citibank Singapore's business director, Mr Tan Chia Seng.
Whether you are inside or outside the lock-in period, refinancing a home loan with another bank means incurring legal fees again.
3 Which home loans benefit you most
There are more than 113 different home loan packages in the market.
Fixed rates
Depending on your 'risk tolerance', you can consider locking in your loan at the current low interest rates for the next two to three years. This means going for fixed-rate loan packages in which the rates are fixed for the first two to three years.
Pegged rates
If price transparency is a must and you believe interest rates are likely to remain low in the next 12 months, you can consider packages with rates pegged to the Singapore Inter-bank Offered Rate (Sibor) or other benchmark rates as you will automatically enjoy lower loan rates when interest rates fall further.
Said OCBC's Mr Chan: 'If fixed cash flow and protection against interest rate hikes are of utmost importance, our fixed-rate packages would be more appropriate.'
Zero penalty for switching
Those who are thinking of selling their property in the next two to three years should choose a package with a shorter penalty period or one with no penalties attached. For a loan amount of $500,000, you would save $7,500 if you chose a package with no penalties attached over one that imposes a penalty charged at 1.5 per cent of the loan amount, said Mr Ng.
4 Which expenses you have to budget for
Rates don't stay depressed forever. When refinancing, do not underestimate other expenses in a lower interest rate environment only to find yourself unable to pay your debts and monthly instalments when rates rise later, said Mr Dennis Khoo, the general manager of wealth management at Stanchart.
Borrowers should ensure they are not over-exposed to debt repayments. Set aside enough cash to cover at least six to 12 months of all necessary expenses such as utilities and phone bills, he said.
5 Which packages offer favourable incentives
There are more than rates to consider when refinancing.
Partial loan repayment
Pick a package that does not penalise you for partial repayments. This means you can lower your overall loan balance whenever you wish to redeem part of your loan.
Free loan conversion
If your property is still under construction, ask for a package with a 'free loan conversion'. This lets you switch to a package with lower rates when you get your temporary occupation permit.
Rebates
If a package offers a cash rebate, check if it is refundable and if there will be any additional penalty charges should you withdraw within the lock-in period.
Free fire insurance
Some lenders throw this in.
Dennis Ng, the founder of mortgage consultancy portal www.HousingLoanSG.com, reckons that if you are paying 3.5 per cent or higher on your home loan, you should be able to enjoy savings in interest by refinancing the loan.
He has worked out that, based on a 30-year loan tenure, refinancing an outstanding loan amount of $215,000 to a lower interest rate of 2.2 per cent, down from the current 4.5 per cent, would result in interest savings of about $14,730 over three years.
Source: The Straits Times
Before you refinance your home loan... The current downward trend in home loan rates provides a compelling reason for home owners to review their mortgage packages.
Lorna Tan looks at five things to consider when refinancing your home loan
WITH interest rates in Singapore still falling and the property market turning quiet, banks are now gunning for the mortgage refinancing business.
Refinancing means replacing your current mortgage with another that comes with lower interest rates. This can be done with the same bank or by switching to another bank.
Many home owners are now considering this because the Singapore Inter-bank Offered Rate (Sibor) has fallen from over 3 per cent to below 1.3 per cent. Sibor, the rate at which banks lend to one another, is a key component used in setting home loan rates.
Some home owners have taken the bait. At HSBC Singapore, for example, refinancing applications have increased by more than 50 per cent in number over the past three months.
Other banks, such as United Overseas Bank, have been circulating new refinancing packages by mail to home owners. But before you take the plunge, you should be aware that refinancing a mortgage comes at a cost. Penalties could be imposed if you terminate your housing loan early with your existing lender, and you could incur legal fees if you refinance the loan with another bank.
Balance your options
A mortgage with a lower interest rate might seem more attractive, but before you refinance your loan, consider these factors:
a) Lock-in period
b) Penalty for early loan redemption
c) Conversion fee
d) Legal subsidy
e) Choice of fixed, variable or interest rate-linked rates
f) Cash rebates
Flexibility to make partial loan redemption
a) Free fire insurance
b) Affordability
Five things to note before you switch:
1 When you should consider refinancing
Scenario 1
The savings outweigh the costs of refinancing. In other words, do your sums first.
Scenario 2
You do not plan to sell your property within the next 12 months.
Maybank Singapore's head of consumer banking, Ms Helen Neo, said it does not make sense to refinance if you plan to sell your home in the short term.
'Home owners have to pay redemption fees, and even refund legal subsidies or cashbacks to the banks,' she said.
Mr Dennis Ng, the founder of mortgage consultancy portal www.HousingLoanSG.com, added you typically need to give three months' notice to your existing bank before switching. If you sell your property within nine months, say, you will enjoy interest savings for only six months. Your savings might not be much higher than the refinancing costs.
2 What refinancing will cost you ?
With the same bank
Within the lock-in period, Check if your package has a lock-in period. During this time, usually two to three years, you have to pay a penalty if you withdraw your loan. It's usually 1-1.5 per cent of the outstanding loan amount. Also, there is a conversion fee of $500 to $1,000.
Outside the lock-in period : The cost is just the conversion fee.
With another bank
With banks pulling out all the stops to garner a larger slice of the home loans market, it is worth your while to shop around. DBS Bank, for example, has customised packages that subsidise penalty payments, while Standard Chartered Bank (Stanchart) is repricing home loans down for existing customers on selected packages.
OCBC Bank's head of consumer secured lending, Mr Gregory Chan, encourages customers to talk to their lenders first before leaving for another bank. This is because the actual charges incurred could vary depending on various factors, which could include the time till the lock-in period expires and the customer's business relationship with the bank.
Within the lock-in period
Besides having to cough up a penalty for early loan redemption, you will have to refund the subsidy on legal costs provided by your current bank. Capped at $2,000, the subsidy is calculated based on 0.4 per cent of the loan amount, plus the cost of the $500 stamp duty. Most banks will offer a subsidy of up to $2,000, depending on the loan amount.
If your loan amount is, say, $500,000, the bank is likely to have given you a subsidy of $2,000.
Outside the lock-in period
Normally, you don't need to pay your current bank penalties or administrative fees. However, you might have to reimburse the bank for freebies you received when you first took out the loan. These could include legal subsidies, free fire insurance on the property and promotional shopping vouchers, said Citibank Singapore's business director, Mr Tan Chia Seng.
Whether you are inside or outside the lock-in period, refinancing a home loan with another bank means incurring legal fees again.
3 Which home loans benefit you most
There are more than 113 different home loan packages in the market.
Fixed rates
Depending on your 'risk tolerance', you can consider locking in your loan at the current low interest rates for the next two to three years. This means going for fixed-rate loan packages in which the rates are fixed for the first two to three years.
Pegged rates
If price transparency is a must and you believe interest rates are likely to remain low in the next 12 months, you can consider packages with rates pegged to the Singapore Inter-bank Offered Rate (Sibor) or other benchmark rates as you will automatically enjoy lower loan rates when interest rates fall further.
Said OCBC's Mr Chan: 'If fixed cash flow and protection against interest rate hikes are of utmost importance, our fixed-rate packages would be more appropriate.'
Zero penalty for switching
Those who are thinking of selling their property in the next two to three years should choose a package with a shorter penalty period or one with no penalties attached. For a loan amount of $500,000, you would save $7,500 if you chose a package with no penalties attached over one that imposes a penalty charged at 1.5 per cent of the loan amount, said Mr Ng.
4 Which expenses you have to budget for
Rates don't stay depressed forever. When refinancing, do not underestimate other expenses in a lower interest rate environment only to find yourself unable to pay your debts and monthly instalments when rates rise later, said Mr Dennis Khoo, the general manager of wealth management at Stanchart.
Borrowers should ensure they are not over-exposed to debt repayments. Set aside enough cash to cover at least six to 12 months of all necessary expenses such as utilities and phone bills, he said.
5 Which packages offer favourable incentives
There are more than rates to consider when refinancing.
Partial loan repayment
Pick a package that does not penalise you for partial repayments. This means you can lower your overall loan balance whenever you wish to redeem part of your loan.
Free loan conversion
If your property is still under construction, ask for a package with a 'free loan conversion'. This lets you switch to a package with lower rates when you get your temporary occupation permit.
Rebates
If a package offers a cash rebate, check if it is refundable and if there will be any additional penalty charges should you withdraw within the lock-in period.
Free fire insurance
Some lenders throw this in.
Dennis Ng, the founder of mortgage consultancy portal www.HousingLoanSG.com, reckons that if you are paying 3.5 per cent or higher on your home loan, you should be able to enjoy savings in interest by refinancing the loan.
He has worked out that, based on a 30-year loan tenure, refinancing an outstanding loan amount of $215,000 to a lower interest rate of 2.2 per cent, down from the current 4.5 per cent, would result in interest savings of about $14,730 over three years.
Source: The Straits Times
Monday, March 3, 2008
What goes on behind an Urban Master Plan?
March 2, 2008
Putting the WOW into a masterplan
A good urban plan must have impact and give a sense of excitement, says Jeffrey Ho, executive vice-president of home-grown Surbana Urban Planning Group, which has won global planning awards.
SOME KEY ASPECTS OF AN ICONIC PLAN are attractiveness, convenience and efficiency, says Mr Ho, who finds great job satisfaction from interacting with his clients, especially those who are enlightened and open to new ideas.
HOME-GROWN Surbana International Consultants, which used to be part of the Housing Board (HDB), is well-known for winning architecture awards for its work in designing and building Singapore's public homes.
But elsewhere in the global arena, Surbana has also carved out a name for itself. It has fought off competition from international firms to win awards and clinch contracts to create masterplans for various projects, and even whole cities.
Surbana's urban planning arm, Surbana Urban Planning Group, has traversed far and wide to draw masterplans for diverse locations including China, the Middle East, Indonesia, Sri Lanka, South Africa and Cambodia.
Some of Surbana's masterplans to have won international awards include those for Tianjin Port Island in China, the Van Chuong New Urban Area in Vietnam and Greater Doha in Qatar.
Q What defines masterplanning and what do you consider when planning a new town or project?
'I find urban planning quite intuitive. Once you understand the place, you have a knack for knowing what goes where. There is a pattern and formula you can apply, but you need to adapt it to the local context... There is no one fixed approach.' MR HO, on the work of an urban planner
A masterplan is actually a physical plan that defines land uses in a specified area.
More specifically, in our context, it is called urban planning. This requires a multi-disciplinary group of professionals to put together plans, perspectives, scale models, computer- generated animation and written reports.
There are many aspects of a site that urban planners need to understand before any masterplan can be developed. These aspects are related to existing conditions such as: land uses, transport, landscape, community values and traditions, climatic conditions, constraints, environmental quality, vibrancy and the general feel of the place as a whole.
Q What does the work of urban planners entail?
A A masterplan can take three months to a year to complete. We develop the plan through site visits and meetings with the relevant authorities, local businessmen, academics, fellow consultants and stakeholders. We also review documents, statistical reports and so on. We go beyond being a tourist in the country that we are planning for. We have to live and breathe the country.
Sometimes, I find urban planning quite intuitive. Once you understand the place, you have a knack for knowing what goes where. There is a pattern and formula you can apply, but you need to adapt it to the local context. For urban planning, there is no one fixed approach.
Q What challenges do you face and how do you tackle these issues?
A Sometimes being an Asian firm is a disadvantage as we are competing with very established European firms. But this does not deter us. Rather, it sharpens our professional and negotiation skills.
We started small but we have tried as much as possible to get international exposure. Slowly, after doing more projects and getting a proven track record, we have started to gain a reputation. It's a very steep learning curve but we are getting there.
Also, Singapore has a tight labour market, which makes it hard to find good and committed people - and cost is high.
Q How different is it working overseas?
A Language can sometimes be a big problem in places such as Vietnam and Cambodia. You need a translator, and sometimes the essence and meaning of words get lost in translation. Then other things you have to consider include how to find the right place to get the information you need, understanding the political situation of various countries and being able to respond to changes in government policies. Basically, we have to be more flexible.
Q So what makes an iconic masterplan?
A A good urban plan must be what I call 'imageable'. You have to look at it and go 'wow'. It must have impact and make you feel a sense of excitement.
If it is well-composed, you also get a certain feeling of 'comfortability'. Some key aspects of an iconic plan are: attractiveness, convenience and efficiency. Our projects in the Middle East are examples of mega and iconic masterplans. One of them is the Al Salam City Masterplan that we did in 2006 - it is a 2,000ha site in Umm Al Quwain - one of the emirates of the United Arab Emirates.
Our clients were so satisfied that they have engaged us to implement the masterplan. From there, we went on to clinch the biggest masterplan project with the Qatar government: a 4,000 sq km planning of two municipalities.
Most of the Middle East projects are done on a clean slate with hardly any constraints. And here lies the golden opportunity for us to showcase our creativity, capabilities, knowledge and skill in delivering a project on time and meeting international standards.
Q What are some current global trends in urban planning?
A The biggest buzzword now is sustainability. Everywhere you go, people are 'going green'. Future urban planning will place special emphasis on eco-friendliness.
Environmental issues have always been part of our urban- planning philosophy. But now more than ever, this needs to be expressed physically in our plans, and in the landscape too, using green spaces and green technology.
There are two major trends on top of this - one is the desire to create a 'must visit' destination that attracts investment and people. The masterplan must have that 'wow' factor I talked about, that differentiates the location and helps it stay ahead of other developments. This is more prevalent in the Middle East.
In other places like China, the other trend is more apparent - that of using the masterplan to focus on solving issues such as traffic congestion, environmental pollution, housing needs, growing population and the need to conserve.
Q Which is your most memorable project?
A I have to say the next project will be the most memorable one, because you start all over again. Every project is interesting so I can't really single out any one.
But for me, the greatest job satisfaction is actually the interaction with my clients. If they are really enlightened and are open to ideas, the whole development process becomes very stimulating and inspiring.
Putting the WOW into a masterplan
A good urban plan must have impact and give a sense of excitement, says Jeffrey Ho, executive vice-president of home-grown Surbana Urban Planning Group, which has won global planning awards.
SOME KEY ASPECTS OF AN ICONIC PLAN are attractiveness, convenience and efficiency, says Mr Ho, who finds great job satisfaction from interacting with his clients, especially those who are enlightened and open to new ideas.
HOME-GROWN Surbana International Consultants, which used to be part of the Housing Board (HDB), is well-known for winning architecture awards for its work in designing and building Singapore's public homes.
But elsewhere in the global arena, Surbana has also carved out a name for itself. It has fought off competition from international firms to win awards and clinch contracts to create masterplans for various projects, and even whole cities.
Surbana's urban planning arm, Surbana Urban Planning Group, has traversed far and wide to draw masterplans for diverse locations including China, the Middle East, Indonesia, Sri Lanka, South Africa and Cambodia.
Some of Surbana's masterplans to have won international awards include those for Tianjin Port Island in China, the Van Chuong New Urban Area in Vietnam and Greater Doha in Qatar.
Q What defines masterplanning and what do you consider when planning a new town or project?
'I find urban planning quite intuitive. Once you understand the place, you have a knack for knowing what goes where. There is a pattern and formula you can apply, but you need to adapt it to the local context... There is no one fixed approach.' MR HO, on the work of an urban planner
A masterplan is actually a physical plan that defines land uses in a specified area.
More specifically, in our context, it is called urban planning. This requires a multi-disciplinary group of professionals to put together plans, perspectives, scale models, computer- generated animation and written reports.
There are many aspects of a site that urban planners need to understand before any masterplan can be developed. These aspects are related to existing conditions such as: land uses, transport, landscape, community values and traditions, climatic conditions, constraints, environmental quality, vibrancy and the general feel of the place as a whole.
Q What does the work of urban planners entail?
A A masterplan can take three months to a year to complete. We develop the plan through site visits and meetings with the relevant authorities, local businessmen, academics, fellow consultants and stakeholders. We also review documents, statistical reports and so on. We go beyond being a tourist in the country that we are planning for. We have to live and breathe the country.
Sometimes, I find urban planning quite intuitive. Once you understand the place, you have a knack for knowing what goes where. There is a pattern and formula you can apply, but you need to adapt it to the local context. For urban planning, there is no one fixed approach.
Q What challenges do you face and how do you tackle these issues?
A Sometimes being an Asian firm is a disadvantage as we are competing with very established European firms. But this does not deter us. Rather, it sharpens our professional and negotiation skills.
We started small but we have tried as much as possible to get international exposure. Slowly, after doing more projects and getting a proven track record, we have started to gain a reputation. It's a very steep learning curve but we are getting there.
Also, Singapore has a tight labour market, which makes it hard to find good and committed people - and cost is high.
Q How different is it working overseas?
A Language can sometimes be a big problem in places such as Vietnam and Cambodia. You need a translator, and sometimes the essence and meaning of words get lost in translation. Then other things you have to consider include how to find the right place to get the information you need, understanding the political situation of various countries and being able to respond to changes in government policies. Basically, we have to be more flexible.
Q So what makes an iconic masterplan?
A A good urban plan must be what I call 'imageable'. You have to look at it and go 'wow'. It must have impact and make you feel a sense of excitement.
If it is well-composed, you also get a certain feeling of 'comfortability'. Some key aspects of an iconic plan are: attractiveness, convenience and efficiency. Our projects in the Middle East are examples of mega and iconic masterplans. One of them is the Al Salam City Masterplan that we did in 2006 - it is a 2,000ha site in Umm Al Quwain - one of the emirates of the United Arab Emirates.
Our clients were so satisfied that they have engaged us to implement the masterplan. From there, we went on to clinch the biggest masterplan project with the Qatar government: a 4,000 sq km planning of two municipalities.
Most of the Middle East projects are done on a clean slate with hardly any constraints. And here lies the golden opportunity for us to showcase our creativity, capabilities, knowledge and skill in delivering a project on time and meeting international standards.
Q What are some current global trends in urban planning?
A The biggest buzzword now is sustainability. Everywhere you go, people are 'going green'. Future urban planning will place special emphasis on eco-friendliness.
Environmental issues have always been part of our urban- planning philosophy. But now more than ever, this needs to be expressed physically in our plans, and in the landscape too, using green spaces and green technology.
There are two major trends on top of this - one is the desire to create a 'must visit' destination that attracts investment and people. The masterplan must have that 'wow' factor I talked about, that differentiates the location and helps it stay ahead of other developments. This is more prevalent in the Middle East.
In other places like China, the other trend is more apparent - that of using the masterplan to focus on solving issues such as traffic congestion, environmental pollution, housing needs, growing population and the need to conserve.
Q Which is your most memorable project?
A I have to say the next project will be the most memorable one, because you start all over again. Every project is interesting so I can't really single out any one.
But for me, the greatest job satisfaction is actually the interaction with my clients. If they are really enlightened and are open to ideas, the whole development process becomes very stimulating and inspiring.
Sunday, February 10, 2008
Property Upgrading Scheme won't add much to Resale Price
Feb 10, 2008
PROPERTY: New HDB upgrading scheme won't add much more to resale prices
The Home Improvement Programme will not boost prices of resale flats as much because upgrading is on a smaller scale, say property experts
THE Home Improvement Programme (HIP) is the newest kid on the block in the Housing Board's two-decade long upgrading scheme.
Property experts, however, say that it will have a far smaller impact on the value of flats compared to previous upgrading plans. This is because upgrading under HIP will be smaller in scale.
HIP and another scheme, the Neighbourhood Renewal Programme (NRP), are devised to stretch the government dollar over many more households and to pay closer attention to residents' views. They will be rolled out soon in up to 12 locations islandwide, including Yishun and Tampines.
The outgoing Main Upgrading Programme (MUP) involved more extensive work as it overhauled the insides of flats with new toilets, extra rooms and doors, as well as the common areas of the blocks and precincts.
The MUP proved a gold mine for people like Mrs N. L. Chan, who bought her four-room flat in Holland Close for $290,000 in September 2006, when her estate was in the last throes of the upgrading programme.
Just eight months later, she sold it for $330,000 as she had to move closer to her daughter in Dover Crescent.
Less noticeable improvements
Flats which underwent the outgoing Main Upgrading Programme made a big impression with their additional rooms and spanking new precinct facilities around them. However, the improvements under the new Home Improvement Programme may not be that noticeable as they focus on essential improvements such as the repair of spalling concrete.Such jumps in value may be harder to come by under HIP, say property agents.
The new programme focuses on the essential improvements in the flat, such as the repair of spalling concrete and replacement of waste pipes.
Once at least 75 per cent of flat owners vote for such upgrading, this essential work is compulsory, although it is fully paid for by the Government. The flat owners, however, have the option of having their doors and toilets replaced at a subsidised rate.
Meanwhile, the NRP promises to spruce up a few adjoining sites together, unlike the previous Interim Upgrading Programme Plus scheme which was conducted in one precinct at a time.
Apart from the economies of scale, the bigger budget under the amended programme would make it possible for items such as tennis courts and skating parks to be considered.
About 300,000 flats will be eligible for the HIP, while 200,000 units can undergo work for the NRP.
A third programme - lift upgrading - will run concurrently with the new schemes. This aims to give almost every HDB flat resident direct lift access to his floor by 2014.
The director of Dennis Wee Properties, Mr Chris Koh, estimates that while the MUP usually boosts a flat's value by $20,000 to $30,000 over and above what the flat owner pays for the upgrading work, the equivalent expected for flats which undergo HIP is only about $10,000.
This is because the work done will be smaller in scale.
While flats which undergo the MUP make a big impression with their additional rooms, new doors and windows, and spanking new precinct facilities around them, the improvements under the HIP may not be that noticeable.
More people, for example, are now likely to opt out of having new doors and windows to reduce their bills under the HIP.
It may not produce the 'entire fresh look' needed to raise the value of the home by much, said Mr Koh.
Similarly, the executive director of Roof Real Estate Group, Mr Dave Lau, does not expect the value of a home under the HIP programme to rise by more than 2 to 3 per cent, compared to 10 to 20 per cent under the MUP before.
But he reckoned that 'the HIP would probably make property easier to sell'.
Both programmes were devised from the feedback received during a series of forums held last year to find out what it takes to strengthen bonding within HDB estates.
During these discussions, participants wanted a greater say in how their estate turned out.
No matter the smaller increase in value, the executive director for HSR property group, Mr Eric Cheng, said that buyers can usually wrangle a better price from sellers if they buy a flat that is undergoing upgrading, compared to after it is done.
Most of the time, sellers try to hold off putting their flat on the market until after upgrading, when the new look of their estate will bolster their position at the negotiating table.
PROPERTY: New HDB upgrading scheme won't add much more to resale prices
The Home Improvement Programme will not boost prices of resale flats as much because upgrading is on a smaller scale, say property experts
THE Home Improvement Programme (HIP) is the newest kid on the block in the Housing Board's two-decade long upgrading scheme.
Property experts, however, say that it will have a far smaller impact on the value of flats compared to previous upgrading plans. This is because upgrading under HIP will be smaller in scale.
HIP and another scheme, the Neighbourhood Renewal Programme (NRP), are devised to stretch the government dollar over many more households and to pay closer attention to residents' views. They will be rolled out soon in up to 12 locations islandwide, including Yishun and Tampines.
The outgoing Main Upgrading Programme (MUP) involved more extensive work as it overhauled the insides of flats with new toilets, extra rooms and doors, as well as the common areas of the blocks and precincts.
The MUP proved a gold mine for people like Mrs N. L. Chan, who bought her four-room flat in Holland Close for $290,000 in September 2006, when her estate was in the last throes of the upgrading programme.
Just eight months later, she sold it for $330,000 as she had to move closer to her daughter in Dover Crescent.
Less noticeable improvements
Flats which underwent the outgoing Main Upgrading Programme made a big impression with their additional rooms and spanking new precinct facilities around them. However, the improvements under the new Home Improvement Programme may not be that noticeable as they focus on essential improvements such as the repair of spalling concrete.Such jumps in value may be harder to come by under HIP, say property agents.
The new programme focuses on the essential improvements in the flat, such as the repair of spalling concrete and replacement of waste pipes.
Once at least 75 per cent of flat owners vote for such upgrading, this essential work is compulsory, although it is fully paid for by the Government. The flat owners, however, have the option of having their doors and toilets replaced at a subsidised rate.
Meanwhile, the NRP promises to spruce up a few adjoining sites together, unlike the previous Interim Upgrading Programme Plus scheme which was conducted in one precinct at a time.
Apart from the economies of scale, the bigger budget under the amended programme would make it possible for items such as tennis courts and skating parks to be considered.
About 300,000 flats will be eligible for the HIP, while 200,000 units can undergo work for the NRP.
A third programme - lift upgrading - will run concurrently with the new schemes. This aims to give almost every HDB flat resident direct lift access to his floor by 2014.
The director of Dennis Wee Properties, Mr Chris Koh, estimates that while the MUP usually boosts a flat's value by $20,000 to $30,000 over and above what the flat owner pays for the upgrading work, the equivalent expected for flats which undergo HIP is only about $10,000.
This is because the work done will be smaller in scale.
While flats which undergo the MUP make a big impression with their additional rooms, new doors and windows, and spanking new precinct facilities around them, the improvements under the HIP may not be that noticeable.
More people, for example, are now likely to opt out of having new doors and windows to reduce their bills under the HIP.
It may not produce the 'entire fresh look' needed to raise the value of the home by much, said Mr Koh.
Similarly, the executive director of Roof Real Estate Group, Mr Dave Lau, does not expect the value of a home under the HIP programme to rise by more than 2 to 3 per cent, compared to 10 to 20 per cent under the MUP before.
But he reckoned that 'the HIP would probably make property easier to sell'.
Both programmes were devised from the feedback received during a series of forums held last year to find out what it takes to strengthen bonding within HDB estates.
During these discussions, participants wanted a greater say in how their estate turned out.
No matter the smaller increase in value, the executive director for HSR property group, Mr Eric Cheng, said that buyers can usually wrangle a better price from sellers if they buy a flat that is undergoing upgrading, compared to after it is done.
Most of the time, sellers try to hold off putting their flat on the market until after upgrading, when the new look of their estate will bolster their position at the negotiating table.
Tuesday, December 18, 2007
A Marketing Plan - The Thing that MAKES deals happen
A Marketing Plan - The Thing That Makes Deals Happen!
You’re a Real Estate Investor, and you’re out there in the market place looking for deals. I have a question for you.
Are you doing a bit of advertising and just hoping that a deal will fall in your lap? , or are you operating in a way that makes certain it will happen?
If you don’t have a process for making sure deals happen, you don’t yet understand the importance of having a marketing plan. The sad fact is that even after all their training, less than one percent of all real estate entrepreneurs and investors actually have a marketing plan. Even though it’s very simple, don’t underestimate its power.
The Most Important Thing About Marketing is to Have a Marketing Plan!
1) It’s a concrete result you put out for your mind to seize on and strive to achieve.
2) It allows you to clarify exactly what you want to achieve in the coming 30 days.
3) It allows you map out the activities needed to achieve that plan.
4) It allows you to plan in advance to delegate off the lower paying activities, so you don’t end up doing them.
5) It allows you set time deadlines, to hold others accountable so everything gets DONE!
6) It results in you being free to concentrate on your highest payoff activity: Making Offers on Great Deals!
7) You have a business that operates consciously, not by accident.
More people fail in real estate because they simply do not have a plan or goals. You should have a detailed marketing plan of what you want to accomplish and how you are going to accomplish it.And, don’t be vague, either. Things like, I want to make more money than I can ever spend, and I want to be rich, and I want to make $10,000 a month, are not plans. They are too vague, and they won’t help you get there.
Be as specific as you can possibly be.In planning for monthly revenue, try to put your money goals in cash income, not gross revenue. I know gross revenue is what you’re used to thinking in, but cash is obviously more important. It’s what you take to the bank, and it’s what pays bills.
First, examine your current numbers. More than 80 percent of all real estate entrepreneurs know how many houses they are buying each month, but they don’t know where those houses came from and how many leads they had to process to develop them into the single deal. And, this is a deadly sin.
You Simply Must Know How You Are Currently Doing
You should know:
1) The total leads that call each month (each week is more manageable),
2) Where those leads come from,
3) How many “qualified” seller prospects (i.e. those that you are willing to invest follow-up in if they don’t sell now; they have motivation, you are interested in the house.) you get each month,
4) The ratio of total to qualified,
5) The number of deals you close,
6) The ratio of closed deals to qualified leads – for each lead source
7) How much you make from each seller,
8) How much it cost you to acquire a new seller.
With this information you can look at your current resources, look ahead, and then plan out what you want to have happen. The number of deals you want to do, the amount of money you want to make.
For example, let’s say you are bringing in around $10,000 a month and your average deal gives you $5,000. Yes, I know that’s low, but for the sake of example. That’s two deals a month. These are cash proceeds and after expenses you net 50 percent of your gross or $5,000 a month. And let’s say that you want to double your net income next month.You will have to get twice as many deals to double your business.
Goal? Four deals a month, or one a week.
Let’s say you currently get one deal a month from a classified ad, and one deal a month for mailing expired listings. But, you get ten qualified calls a month from his classified ad and 10 qualified prospects calling a month as a result of mailing expired listings. So, you currently close ten percent of your prospects.
First, you can improve on this situation by improving that twenty percent closing ratio. By improving your closing ratio by things like more precise targeting, the present lead-flow would stay the same, you’ll get your same twenty real prospects and achieve your goal of doing four deals next month.
But assuming that’s not something you have control over right now, the other way to double your income in the next month is to double the number of qualified prospects you talk to and make offers to. So instead of getting 20 qualified leads to call, you would need 40.Your plan to get forty qualified prospects would need 10 to come from expired listing mailings, 16 to come from flyers in target neighborhoods, 4 from business cards handed out everywhere, 6 to come from signs placed in the ground at high traffic count intersections, 10 to com from classified ads that drive people to the website.
Total: 46 prospects. Cool! That’s six to spare.With this number of leads coming in you have what is needed closed four deals and reach your goal of doubling your net income. Actually, it’s more than doubling because your fixed expenses don’t increase with the income.You should have a monthly plan. Schedule thirty or forty minutes out of one day to make up your monthly plan and see how you did last month. Schedule this time and keep to it. Don’t do any work or take any calls during this time. Keep it strictly for planning.
If you do this and you allow yourself to get into the whole spirit of planning, and making things happen on purpose, you will easily double your income in twelve months.
Your Monthly Plan Should Include The Following:
1) A goal for total net income.
2) A goal for number of deals signed up
3) A goal for number of appointments made.
4) A goal for number of qualified, interested sellers.
5) A goal for total number of leads.
6) Average net income from each deal.
7) The number of prospects you have to generate to reach your goal.
A detailed plan to generate the number of prospects you need. Your plan doesn’t have to be typed out or put into a computer. It can be handwritten on paper. It doesn’t have to be pretty. Scratch pad plans are good enough. The important part is that you do a plan every single week and keep on top of things.
This is a simple thing to do, but it is just as easy to not do. Blowing it off is the equivalent of you absolving yourself of responsibility for your business. On the other hand, taking the time to think through your goals each month, both for income, and marketing activity, then committing them to paper will make things start happening by plan and put you in control of your business.
About the author:
Ben Innes-Ker has been a full time real estate investor for 7 years and is author of the Motivated Seller Magnet - Automatic Lead Generating System. He is constantly fine-tuning his marketing and business systems to make his investing more profitable with less effort, so he can spend more time enjoying life with his wife and 2 young children. He shares these unique profit making systems with his Power Marketing Members.
You’re a Real Estate Investor, and you’re out there in the market place looking for deals. I have a question for you.
Are you doing a bit of advertising and just hoping that a deal will fall in your lap? , or are you operating in a way that makes certain it will happen?
If you don’t have a process for making sure deals happen, you don’t yet understand the importance of having a marketing plan. The sad fact is that even after all their training, less than one percent of all real estate entrepreneurs and investors actually have a marketing plan. Even though it’s very simple, don’t underestimate its power.
The Most Important Thing About Marketing is to Have a Marketing Plan!
1) It’s a concrete result you put out for your mind to seize on and strive to achieve.
2) It allows you to clarify exactly what you want to achieve in the coming 30 days.
3) It allows you map out the activities needed to achieve that plan.
4) It allows you to plan in advance to delegate off the lower paying activities, so you don’t end up doing them.
5) It allows you set time deadlines, to hold others accountable so everything gets DONE!
6) It results in you being free to concentrate on your highest payoff activity: Making Offers on Great Deals!
7) You have a business that operates consciously, not by accident.
More people fail in real estate because they simply do not have a plan or goals. You should have a detailed marketing plan of what you want to accomplish and how you are going to accomplish it.And, don’t be vague, either. Things like, I want to make more money than I can ever spend, and I want to be rich, and I want to make $10,000 a month, are not plans. They are too vague, and they won’t help you get there.
Be as specific as you can possibly be.In planning for monthly revenue, try to put your money goals in cash income, not gross revenue. I know gross revenue is what you’re used to thinking in, but cash is obviously more important. It’s what you take to the bank, and it’s what pays bills.
First, examine your current numbers. More than 80 percent of all real estate entrepreneurs know how many houses they are buying each month, but they don’t know where those houses came from and how many leads they had to process to develop them into the single deal. And, this is a deadly sin.
You Simply Must Know How You Are Currently Doing
You should know:
1) The total leads that call each month (each week is more manageable),
2) Where those leads come from,
3) How many “qualified” seller prospects (i.e. those that you are willing to invest follow-up in if they don’t sell now; they have motivation, you are interested in the house.) you get each month,
4) The ratio of total to qualified,
5) The number of deals you close,
6) The ratio of closed deals to qualified leads – for each lead source
7) How much you make from each seller,
8) How much it cost you to acquire a new seller.
With this information you can look at your current resources, look ahead, and then plan out what you want to have happen. The number of deals you want to do, the amount of money you want to make.
For example, let’s say you are bringing in around $10,000 a month and your average deal gives you $5,000. Yes, I know that’s low, but for the sake of example. That’s two deals a month. These are cash proceeds and after expenses you net 50 percent of your gross or $5,000 a month. And let’s say that you want to double your net income next month.You will have to get twice as many deals to double your business.
Goal? Four deals a month, or one a week.
Let’s say you currently get one deal a month from a classified ad, and one deal a month for mailing expired listings. But, you get ten qualified calls a month from his classified ad and 10 qualified prospects calling a month as a result of mailing expired listings. So, you currently close ten percent of your prospects.
First, you can improve on this situation by improving that twenty percent closing ratio. By improving your closing ratio by things like more precise targeting, the present lead-flow would stay the same, you’ll get your same twenty real prospects and achieve your goal of doing four deals next month.
But assuming that’s not something you have control over right now, the other way to double your income in the next month is to double the number of qualified prospects you talk to and make offers to. So instead of getting 20 qualified leads to call, you would need 40.Your plan to get forty qualified prospects would need 10 to come from expired listing mailings, 16 to come from flyers in target neighborhoods, 4 from business cards handed out everywhere, 6 to come from signs placed in the ground at high traffic count intersections, 10 to com from classified ads that drive people to the website.
Total: 46 prospects. Cool! That’s six to spare.With this number of leads coming in you have what is needed closed four deals and reach your goal of doubling your net income. Actually, it’s more than doubling because your fixed expenses don’t increase with the income.You should have a monthly plan. Schedule thirty or forty minutes out of one day to make up your monthly plan and see how you did last month. Schedule this time and keep to it. Don’t do any work or take any calls during this time. Keep it strictly for planning.
If you do this and you allow yourself to get into the whole spirit of planning, and making things happen on purpose, you will easily double your income in twelve months.
Your Monthly Plan Should Include The Following:
1) A goal for total net income.
2) A goal for number of deals signed up
3) A goal for number of appointments made.
4) A goal for number of qualified, interested sellers.
5) A goal for total number of leads.
6) Average net income from each deal.
7) The number of prospects you have to generate to reach your goal.
A detailed plan to generate the number of prospects you need. Your plan doesn’t have to be typed out or put into a computer. It can be handwritten on paper. It doesn’t have to be pretty. Scratch pad plans are good enough. The important part is that you do a plan every single week and keep on top of things.
This is a simple thing to do, but it is just as easy to not do. Blowing it off is the equivalent of you absolving yourself of responsibility for your business. On the other hand, taking the time to think through your goals each month, both for income, and marketing activity, then committing them to paper will make things start happening by plan and put you in control of your business.
About the author:
Ben Innes-Ker has been a full time real estate investor for 7 years and is author of the Motivated Seller Magnet - Automatic Lead Generating System. He is constantly fine-tuning his marketing and business systems to make his investing more profitable with less effort, so he can spend more time enjoying life with his wife and 2 young children. He shares these unique profit making systems with his Power Marketing Members.
Tuesday, December 11, 2007
Create Wealth thru Negotiations Skills
Negotiating and Sales Skills Are Critical
Author: Tim Randell
When I first started getting active in creative real estate, my skill set at negotiating was very weak. I had done the telemarketing thing for American Express as a financial planner and had studied and learned a few techniques. On the surface one might think that would be a perfect tie-in to talking to sellers about their properties and their financial situation. I can promise you it wasn't.
Yes, I did pick up asking general sales techniques like never asking close-ended ("yes" or "no" answers) questions. Also, it still works to ask multiple choice assumptive questions like "Would Tuesday at 6 p.m. or Thursday at 3 p.m. work better for you?". The basics were not enough.
When I first began asking sellers what their loan balance was, I may have actually received a number for an answer 50% of the time. I had two major obstacles facing me.
First, my belief system was cock-eyed in that having come from a financial/accountant type background, I knew without a shadow of a doubt that no one would ever just give me their house and that only a complete fool would tell me the balance remaining on their loan.
Second, I didn't have a clue as to the right way to ask and I can tell you from experience that it matters greatly.
The first obstacle, belief system, was easily overcome after I met my first truly motivated seller. Okay, beliefs systems are trashed and I must be the complete fool because that was way too easy.
The second obstacle, phraseology/negotiating, is no longer an obstacle, per se, but it is still a skill that I continually try to improve upon. The two key components, assuming you have already properly established good rapport, are timing and the phrases you use.
Here are some quick examples of how NOT to ask a seller what the loan balance is:
What do you owe?
Are you willing to sell it for what you owe?
How much equity would you say you have?
etc., etc.
Now, don't get me wrong. If you use these phrases and similar ones enough times and with enough confidence, you will be able to get a numerical answer on occasion (as opposed to some of the not so friendly responses I received early on).
Contrast the above phrases to these:
How much is left on the loan?
So, the property's not owned free and clear?
etc., etc.
The first set of questions personalizes the issue and attaches the debt, and thus the problem, with the seller. The second set of questions creates detachment and since it's no longer "their debt" or "their problem" or "what they owe", it's just simply a number and not a problem to share.
Since I first picked up on this one little tactic, I would estimate I get all the information I want on 99 out of 100 calls with almost no real effort. Granted, it does take time and practice to develop decent phone skills. The ability to naturally create rapport and flow with the call, yet still get the information you want will come with time. My point is that it's important to begin testing and tracking different approaches. If you do this, you will notice some very interesting results.
Here's another example when asking about whether or not the seller would consider a carryback (financing it for you). I'd suggest actually trying this one out just to verify the reality. If I ask a seller something like:
Would you consider owner finance?
Would you do a carryback?
Would you carry paper on this?
etc., etc.
What do you think my responses will be? Yes, I know that we like to use our fancy terminology once we've mastered it. I'm probably as guilty as anyone in that regard. However, what the above questions accomplish is forcing the seller into a corner. Either they have to admit they don't understand, and thus appear foolish, or simply say "no". Which do you think happens most often?
Compare the above questions with something like:
Are you in a position where you could take payments?
Would it be possible for me to make payments for a while and pay off your loan later?
These questions almost always lead to a "yes" or a "tell me more" type response. You'll be amazed at the difference.
These are just two quick examples of how the phrases you choose can affect your results. Take a minute to consider how many questions you ask and how much information you attempt to extract from a seller in a single call. Knowing what to say and when to say it will improve your performance more than you can imagine.
I highly recommend picking up some books and/or taking some courses on sales and negotiating. Roger Dawson has great materials available on this web site... http://www.texasrealestateclub.com/courses.html#negotiating and you can visit his site at http://www.blogger.com/www.rdawson.com.
I'd also recommend reviewing our recommended book list for materials on sales and negotiating which can be found here... http://www.texasrealestateclub.com/booklist.html.
Grab some books by Tom Hopkins, Zig Ziglar, and other topsales and negotiators and begin the quest. I firmly believe no other action will make you as much money as fast as developing these skills and practicing them.
Regardless of your specific approach to your business, these skills will absolutely be used in every aspect of your life.
Sincerely,
Tim Randle
Texas Real Estate Club
Author: Tim Randell
When I first started getting active in creative real estate, my skill set at negotiating was very weak. I had done the telemarketing thing for American Express as a financial planner and had studied and learned a few techniques. On the surface one might think that would be a perfect tie-in to talking to sellers about their properties and their financial situation. I can promise you it wasn't.
Yes, I did pick up asking general sales techniques like never asking close-ended ("yes" or "no" answers) questions. Also, it still works to ask multiple choice assumptive questions like "Would Tuesday at 6 p.m. or Thursday at 3 p.m. work better for you?". The basics were not enough.
When I first began asking sellers what their loan balance was, I may have actually received a number for an answer 50% of the time. I had two major obstacles facing me.
First, my belief system was cock-eyed in that having come from a financial/accountant type background, I knew without a shadow of a doubt that no one would ever just give me their house and that only a complete fool would tell me the balance remaining on their loan.
Second, I didn't have a clue as to the right way to ask and I can tell you from experience that it matters greatly.
The first obstacle, belief system, was easily overcome after I met my first truly motivated seller. Okay, beliefs systems are trashed and I must be the complete fool because that was way too easy.
The second obstacle, phraseology/negotiating, is no longer an obstacle, per se, but it is still a skill that I continually try to improve upon. The two key components, assuming you have already properly established good rapport, are timing and the phrases you use.
Here are some quick examples of how NOT to ask a seller what the loan balance is:
What do you owe?
Are you willing to sell it for what you owe?
How much equity would you say you have?
etc., etc.
Now, don't get me wrong. If you use these phrases and similar ones enough times and with enough confidence, you will be able to get a numerical answer on occasion (as opposed to some of the not so friendly responses I received early on).
Contrast the above phrases to these:
How much is left on the loan?
So, the property's not owned free and clear?
etc., etc.
The first set of questions personalizes the issue and attaches the debt, and thus the problem, with the seller. The second set of questions creates detachment and since it's no longer "their debt" or "their problem" or "what they owe", it's just simply a number and not a problem to share.
Since I first picked up on this one little tactic, I would estimate I get all the information I want on 99 out of 100 calls with almost no real effort. Granted, it does take time and practice to develop decent phone skills. The ability to naturally create rapport and flow with the call, yet still get the information you want will come with time. My point is that it's important to begin testing and tracking different approaches. If you do this, you will notice some very interesting results.
Here's another example when asking about whether or not the seller would consider a carryback (financing it for you). I'd suggest actually trying this one out just to verify the reality. If I ask a seller something like:
Would you consider owner finance?
Would you do a carryback?
Would you carry paper on this?
etc., etc.
What do you think my responses will be? Yes, I know that we like to use our fancy terminology once we've mastered it. I'm probably as guilty as anyone in that regard. However, what the above questions accomplish is forcing the seller into a corner. Either they have to admit they don't understand, and thus appear foolish, or simply say "no". Which do you think happens most often?
Compare the above questions with something like:
Are you in a position where you could take payments?
Would it be possible for me to make payments for a while and pay off your loan later?
These questions almost always lead to a "yes" or a "tell me more" type response. You'll be amazed at the difference.
These are just two quick examples of how the phrases you choose can affect your results. Take a minute to consider how many questions you ask and how much information you attempt to extract from a seller in a single call. Knowing what to say and when to say it will improve your performance more than you can imagine.
I highly recommend picking up some books and/or taking some courses on sales and negotiating. Roger Dawson has great materials available on this web site... http://www.texasrealestateclub.com/courses.html#negotiating and you can visit his site at http://www.blogger.com/www.rdawson.com.
I'd also recommend reviewing our recommended book list for materials on sales and negotiating which can be found here... http://www.texasrealestateclub.com/booklist.html.
Grab some books by Tom Hopkins, Zig Ziglar, and other topsales and negotiators and begin the quest. I firmly believe no other action will make you as much money as fast as developing these skills and practicing them.
Regardless of your specific approach to your business, these skills will absolutely be used in every aspect of your life.
Sincerely,
Tim Randle
Texas Real Estate Club
Thursday, December 6, 2007
How to analyse Quality Investment?
To build a 10 million dollar portfolio, you will need to buy investment properties. Those properties need to appreciate while renters pay them off for you, and eventually you will have a huge portfolio.
If you want to skip right to the good stuff, download the excel spreadsheet included in this post, or if you do not have excel (or openoffice.org) you can download the PDF file. The excel file will let you adjust the appreciation rate and the average property price. My $10 million portfolio is based on an average appreciation of 4%, which is the average appreciation over the last 40 years. It is also based on the average property value of $1000k.
Download the excel spreadsheet million dollar investment excel (zipped)
The formula is simple, buy at least $1000k worth of property every year for 10 years. In 35 years your 10 properties will accumulate a value of over $10 million. If you don’t understand, just look at the spreadsheet…it makes more sense to see it! Pretty straightforward. You will make your first million at the 12 year mark, and go over 4 million at 24 years.
There are plenty of properties out there for $1000K or less, that bring in high rents. High rent and low price equals positive cash flow, which is very important when the appreciation is low. Appreciation will go up and down, sometimes even negative, but you should be in it for the long haul.
Even better there are properties that are already rented, so you know exactly the expenses and cash flows if you decide to buy them.
Remember, investing is systematic, and you need a strategy. Set your goals and criteria. Start building your contacts and your network. This how you find the deals.
Source: http://blog.hotvictory.com/
If you want to skip right to the good stuff, download the excel spreadsheet included in this post, or if you do not have excel (or openoffice.org) you can download the PDF file. The excel file will let you adjust the appreciation rate and the average property price. My $10 million portfolio is based on an average appreciation of 4%, which is the average appreciation over the last 40 years. It is also based on the average property value of $1000k.
Download the excel spreadsheet million dollar investment excel (zipped)
The formula is simple, buy at least $1000k worth of property every year for 10 years. In 35 years your 10 properties will accumulate a value of over $10 million. If you don’t understand, just look at the spreadsheet…it makes more sense to see it! Pretty straightforward. You will make your first million at the 12 year mark, and go over 4 million at 24 years.
There are plenty of properties out there for $1000K or less, that bring in high rents. High rent and low price equals positive cash flow, which is very important when the appreciation is low. Appreciation will go up and down, sometimes even negative, but you should be in it for the long haul.
Even better there are properties that are already rented, so you know exactly the expenses and cash flows if you decide to buy them.
Remember, investing is systematic, and you need a strategy. Set your goals and criteria. Start building your contacts and your network. This how you find the deals.
Source: http://blog.hotvictory.com/
Thursday, November 22, 2007
What is the meaning of En-Bloc Sale? (Collective Sale) ?
What is En-Bloc Sale?
ENBLOC SALE allows Owners to sell their properties for a lot more than they could fetch by selling individually in the open market. Normally, this applies to old buildings or buildings which can be developed to their full potential.
How is it so ?It basically allow DEVELOPERS to convert the unused land or development potential in their property development into cash, subject to constraints like flying limit etc.
Enbloc Sale basically means ...All the owners of separate units in an apartment, condominium or even an office building, coming together to collectively sell out their properties to a developer for comprehensive redevelopment.
Why would Owners go for Enbloc Sale ?
Well..
1. En-Bloc Sale allows Owners to sell their properties for a lot more than they could fetch by selling individually in the open market.
2. En-Bloc Sale allows Owners to convert the unused land or development potential in their property development into cash.
3. En-Bloc Sale also allows Owners to cash out of their property investment for other newer and larger properties or re-invest in other forms of higher yield investments.
When is Enbloc then Feasible ?
En-Bloc Sale is normally feasible when one or a combination of the followings is evident in the development:
1. An Increase in Plot Ratio of the land
2. Re-zoning of the land to a higher use
3. The land is not fully built up or utilised to its allowable development potential
What is the Procedures involved ?
The 7 Stages involved in the En-bloc Sale Process
1. Checking Land Value
2. Checking Owners' interest
3. Sale Preparation
4. Marketing of Land sale
5. Private Treaty/ Public Tender and Evaluation
6. Legal Completion of Enbloc Sale
7. Delivery of Vacant Possession
ENBLOC SALE allows Owners to sell their properties for a lot more than they could fetch by selling individually in the open market. Normally, this applies to old buildings or buildings which can be developed to their full potential.
How is it so ?It basically allow DEVELOPERS to convert the unused land or development potential in their property development into cash, subject to constraints like flying limit etc.
Enbloc Sale basically means ...All the owners of separate units in an apartment, condominium or even an office building, coming together to collectively sell out their properties to a developer for comprehensive redevelopment.
Why would Owners go for Enbloc Sale ?
Well..
1. En-Bloc Sale allows Owners to sell their properties for a lot more than they could fetch by selling individually in the open market.
2. En-Bloc Sale allows Owners to convert the unused land or development potential in their property development into cash.
3. En-Bloc Sale also allows Owners to cash out of their property investment for other newer and larger properties or re-invest in other forms of higher yield investments.
When is Enbloc then Feasible ?
En-Bloc Sale is normally feasible when one or a combination of the followings is evident in the development:
1. An Increase in Plot Ratio of the land
2. Re-zoning of the land to a higher use
3. The land is not fully built up or utilised to its allowable development potential
What is the Procedures involved ?
The 7 Stages involved in the En-bloc Sale Process
1. Checking Land Value
2. Checking Owners' interest
3. Sale Preparation
4. Marketing of Land sale
5. Private Treaty/ Public Tender and Evaluation
6. Legal Completion of Enbloc Sale
7. Delivery of Vacant Possession
Sunday, November 18, 2007
Traits a Good Property Investment should have
Nov 18, 2007
Traits a good property investment should have
IT'S important to keep this in mind: It's easy to get into properties, but very difficult and costly to get out. Hence you must get it right the first time and every time. Try to meet as many of the following criteria as you possibly can.
Buy in high-growth areas
These places experience traffic congestion. In many cases, people are forced to relocate closer to their places of work to cut down on travelling time and travelling expenses.
Hence, the demand for such properties is high. Given the limited land supply in choice locations, there will always be upward pressure on prices for these properties.
Buy 10 to 20 per cent below market
You must make money going into properties. The way to do it is to master property negotiating skills and buy from motivated sellers at 10 to 20 per cent lower than the market.
This is especially important when you are buying with the intention to keep forever. If you are planning to sell some time in future, it is still important to buy below market as doing so will ensure that you have made money at the point of purchase.
Buy properties facing the right direction
In a hot tropical country that has 10 to 12 hours of sunshine every day, properties facing the setting sun tend to get very hot after 2pm.
Properties that directly face the setting sun are priced 10 to 20 per cent lower than those facing the morning sun.
Besides properties facing the east, you should also consider north- or south-facing properties as the potential heat impact would be minimal.
Buy properties facing greenery or water
These properties will command a slight premium over others. It is more soothing to face nature in the form of parks and lakes. You will find it windier and cooler too thanks to the open spaces.
Buy corner units if you have the budget
With corner units, you will have much more flexibility than with intermediate units.
For landed properties, you will have far more options with regard to renovations, rebuilding your house and so on.
Excerpted from Milan Doshi's How You Can Become A Multi Millionaire Real Estate Investor
Traits a good property investment should have
IT'S important to keep this in mind: It's easy to get into properties, but very difficult and costly to get out. Hence you must get it right the first time and every time. Try to meet as many of the following criteria as you possibly can.
Buy in high-growth areas
These places experience traffic congestion. In many cases, people are forced to relocate closer to their places of work to cut down on travelling time and travelling expenses.
Hence, the demand for such properties is high. Given the limited land supply in choice locations, there will always be upward pressure on prices for these properties.
Buy 10 to 20 per cent below market
You must make money going into properties. The way to do it is to master property negotiating skills and buy from motivated sellers at 10 to 20 per cent lower than the market.
This is especially important when you are buying with the intention to keep forever. If you are planning to sell some time in future, it is still important to buy below market as doing so will ensure that you have made money at the point of purchase.
Buy properties facing the right direction
In a hot tropical country that has 10 to 12 hours of sunshine every day, properties facing the setting sun tend to get very hot after 2pm.
Properties that directly face the setting sun are priced 10 to 20 per cent lower than those facing the morning sun.
Besides properties facing the east, you should also consider north- or south-facing properties as the potential heat impact would be minimal.
Buy properties facing greenery or water
These properties will command a slight premium over others. It is more soothing to face nature in the form of parks and lakes. You will find it windier and cooler too thanks to the open spaces.
Buy corner units if you have the budget
With corner units, you will have much more flexibility than with intermediate units.
For landed properties, you will have far more options with regard to renovations, rebuilding your house and so on.
Excerpted from Milan Doshi's How You Can Become A Multi Millionaire Real Estate Investor
Friday, November 9, 2007
The Art of Cold Calling
The Art Of Cold Calling
by Chuck and Sue DeFiore
I know, don't groan. You have to do them if you want to get properties and make money. Believe me, I used to hate cold calling. For those of you that have read our book, "Who Makes It Happen: Back On The Road To Success With Creative Real Estate", remember it used to take me an hour to get on the phone and then after 30 minutes I was ready to hang up.
I've learned over time to not think of telephoning as cold calling, but how I can help a seller or buyer. I realize if I make so many calls, I will get so many responses, and I don't take a no personally. It's their loss. Let them continue to pay to run their ads and six months from now when I call out of a paper or web list and they are still there, maybe then they will listen. There are too many people I can help. I refuse to worry about the ones that won't listen.
So, the first step is to get in the frame of mind that you are offering help. Next, let the seller do the talking. You listen. How do I do that, you say? Well, when I call on a home and someone answers (as opposed to leaving my message), I ask is the home still available? Great, my name is Susan, who am I speaking with? George, tell me about your home? This gets the seller talking. I just guide him/her with how many square feet, garage, etc. For those that have purchased our manual, this form is in the Seller section. You want to get as much information as possible. What they don't tell you ask. The last question I ask is, George, it sounds like a beautiful home, why are you selling? Then let him/her talk. This question tells you how motivated he/she is. Is he/she moving into a new home, relocating or just putting out feelers.
Next I ask the pricing information, how much are they asking for the house? How did they arrive at that price? Comps? Have they had any offers? If no offers, ask them why they think they haven't had any offers?
Next I ask about financing information. What are the payments? Any second mortgages? Are their payments current? Any CC&R's? What they paid for the home? Many times when Iask, "What did they pay for the home?", I get, "it's none of your business". Well, I say to the seller, this helps me decide if a Lease Purchase is workable, and it is a matter of public record.
Always be sure to check on-line or with public records that the person you spoke to is the individual who has the authority to deal.
Finally, I ask about Lease Purchasing and tell them the advantages. Some will say yes, can you send me some information? Others will say, no, I need to sell. I'll say, that's fine, why don't I send you some information so you have it on hand as another option if you need it. Always, follow up.
Remember, relax and pick up that phone. Otherwise, the deal and the money won't come your way. And remember, you can always consult!
Source: http://www.reidepot.com/
by Chuck and Sue DeFiore
I know, don't groan. You have to do them if you want to get properties and make money. Believe me, I used to hate cold calling. For those of you that have read our book, "Who Makes It Happen: Back On The Road To Success With Creative Real Estate", remember it used to take me an hour to get on the phone and then after 30 minutes I was ready to hang up.
I've learned over time to not think of telephoning as cold calling, but how I can help a seller or buyer. I realize if I make so many calls, I will get so many responses, and I don't take a no personally. It's their loss. Let them continue to pay to run their ads and six months from now when I call out of a paper or web list and they are still there, maybe then they will listen. There are too many people I can help. I refuse to worry about the ones that won't listen.
So, the first step is to get in the frame of mind that you are offering help. Next, let the seller do the talking. You listen. How do I do that, you say? Well, when I call on a home and someone answers (as opposed to leaving my message), I ask is the home still available? Great, my name is Susan, who am I speaking with? George, tell me about your home? This gets the seller talking. I just guide him/her with how many square feet, garage, etc. For those that have purchased our manual, this form is in the Seller section. You want to get as much information as possible. What they don't tell you ask. The last question I ask is, George, it sounds like a beautiful home, why are you selling? Then let him/her talk. This question tells you how motivated he/she is. Is he/she moving into a new home, relocating or just putting out feelers.
Next I ask the pricing information, how much are they asking for the house? How did they arrive at that price? Comps? Have they had any offers? If no offers, ask them why they think they haven't had any offers?
Next I ask about financing information. What are the payments? Any second mortgages? Are their payments current? Any CC&R's? What they paid for the home? Many times when Iask, "What did they pay for the home?", I get, "it's none of your business". Well, I say to the seller, this helps me decide if a Lease Purchase is workable, and it is a matter of public record.
Always be sure to check on-line or with public records that the person you spoke to is the individual who has the authority to deal.
Finally, I ask about Lease Purchasing and tell them the advantages. Some will say yes, can you send me some information? Others will say, no, I need to sell. I'll say, that's fine, why don't I send you some information so you have it on hand as another option if you need it. Always, follow up.
Remember, relax and pick up that phone. Otherwise, the deal and the money won't come your way. And remember, you can always consult!
Source: http://www.reidepot.com/
Sunday, September 23, 2007
Hot Tips in buying Overseas Land
Singaporeans R becoming Richer!!
I thrive in modelling...especially what the successful is doing.... And one of the things that has struck present day Singapore is the ever increasing amount of wealth that is handed down from this thing called property.. whether it be Enbloc... whereas developers pay a sum of money to dwellers for the sale of their property.. or whether is it just plain residential sale or rental... everyone seems to be becoming more well off... And indeed... one of the common thing now is overseas property.... So.. I bring you some news of what others had done in particular. To be sure, not all stories are success stories.. but you learn. The things about lessons.. is that you can get free lessons from the success or failures of others.. so that by not losing a dime, you get a load full of worthy lessons that in time to come, you benefit... We learn SIMPLY by standing on the shoulders of others... haha..And don't fret that there isn't going to be any more opportunities... Things like this do go in cycles.... So don't worry.. we will have our time.. so here goes...
Sep 23, 2007
Banking on overseas land
Thousands of Singaporeans have sunk money into undeveloped plots overseas in the hope of getting high returns. Finance Correspondent Lorna Tan talks to three investors who have ventured into this foreign territory.
FOR some, it is not enough to have a roof over their heads. Singaporeans' love affair with property has extended to owning raw land beyond the Republic's shores, with more than 10,000 opting for this type of investment.
In the 1990s, there was just one firm marketing such undeveloped land, or raw land.
But now at least five firms are selling land in Britain, Canada, Thailand and the United States. The latest two entrants are Profitable Plots, which offers British land, and Royal Siam Trust, which sells beachfront plots in Thailand.
Investor Helen Tay
FOR Ms Helen Tay, 37, it has been a long wait for her raw land investment to bear fruit, and she is still waiting. In 1998, the former lawyer turned network marketeer bought two plots of Canadian land for C$50,000 (S$74,485) after visiting a roadshow at a hotel.
It was organised by land asset management firm Walton International Group. Set up here in 1996, Walton markets plots of raw land in the Canadian cities of Calgary and Edmonton, as well as in Texas, in the US. It buys the land, keeps a portion for itself and sells the rest to individual investors, who in turn get a title deed in their name. Each unit of land costs about C$25,000.
Investors are typically advised that there could be a wait of five to seven years before the parcel of land obtains development approvals. When that happens, Walton will sell the land to developers at a higher price, subject to 60 per cent of investors consenting to the sale.
For Ms Tay, the wait to see profits from her plots in Northridge, Calgary, has been longer than expected.
'I still haven't seen my money. It's been a long wait...Back in 1998, I was given a forecast of five years. It's not a great investment but if the money comes in, it should still be better than putting money in a fixed deposit,' said Ms Tay.
But her long wait could be coming to an end. In May, she was informed by Walton that there was an offer to buy the land at a price that worked out to C$130,000 per plot. This would mean a profit of about C$96,000 for Ms Tay, after she coughs up a capital gains tax of 40 per cent to the Canadian government, plus transfer fees.
If she had bought one plot of land, the tax would be a lower 25 per cent.
Investor John Khoo
UNLIKE Ms Tay, another raw land investor, Mr John Khoo, 50, made sure he saw his plot of land before purchasing it. Mr Khoo works in a foreign bank here but has been visiting relatives in Edmonton, Canada every year since 1990. In 2004, he plonked about C$100,000 into two plots of land measuring 700 sq ft each (excluding the garden areas), after visiting the raw land sites to assess their appeal.
Mr Khoo took a loan for 60 per cent of the purchase price at an annual rate of under 2 per cent from a Canadian bank. He was also informed that he need not pay a property gains tax as it was his first property in Canada.
'Location is the most important factor and that means buying land near a mall, a train station, an oil field, a windmill, biodiesel farmland...If you don't go there, you don't really know what kind of site you've bought. So unless you are familiar with the area, better go see for yourself,' said Mr Khoo. Before investing, he also consulted banker friends who were familiar with the location of his sites.
Mr Khoo added that by the time land banking firms sell their plots to Asian investors, the good ones would have been taken up by local investors, who would have picked the cream of the crop of the raw land sites. The land that he bought had just received planning permission then, and two two-bedroom houses now sit on his two plots of land. The land is near a university in downtown Edmonton.
The value of his land has since doubled and Mr Khoo expects to pay a legal fee of about C$1,000 when he sells his land. Currently, he enjoys an annual rental yield of 10 per cent.
Investor Dr Chiu Jen Wun
DR CHIU Jen Wun, 45, said that 'the main bugbear of raw land investing is time', because you can never be sure when you can cash out. In recent years, the anaesthesiologist has invested in Canadian and British land, which he purchased from Walton and Profitable Plots. He declined to reveal the amount.
Early this year, he made a net profit of about $20,000 from two plots of Canadian land, which were about half an acre, or 0.202ha, each. He had bought them at $37,000 per plot, 41/2 years ago. Two years ago, he invested in British land. At that time, Profitable Plots was selling units of land with each ranging between £3,000 (S$9,044) and £28,000. Customers were told to expect returns of 2.5 to 14 times, said Dr Chiu. Profitable Plots has advised him that it may take five years to see results.
A personal friend of financial guru Robert Allen, Dr Chiu was motivated to invest in raw land as part of his overall investments so as to generate multiple streams of income.
'This is one allocation in my diversified balanced portfolio of investments,' said Dr Chiu, who aims for a minimum 7 per cent annual return on his investments. He adds that the advantage of buying British land for Singaporeans who do not work or live there, is that they need not pay either capital gains tax or stamp duty to the British government.
To boost the confidence of investors and to make it easier for them to part with their cash, both Walton and Profitable Plots offer some sort of buyback guarantee. Instead of opting for such a guarantee, Dr Chiu decided to wait it out in the hope of bigger returns.
At Walton, investors can sell the land back to Walton at the original purchase price in five years, based on an agreement. But this is believed to be limited to Canadian land and not US land. In fact, the firm used to offer a financing scheme at a rate of 11.75 per cent a year but it has since been withdrawn.
And Profitable Plots, which has paid up capital of $2.1 million, offers two ways of getting a return. Group operations director Andy Nordmann said: 'One is where the return is earned when planning permission is given and the land is sold to a developer. The other is a fixed return of 12.5 per cent paid annually. This allows our clients the choice of both a short-term and a medium-term investment strategy.'
The firm provides a warranty to all clients which allows a five-year opt-out with no loss of capital. And it also allows clients the flexibility of switching their plots to ones that have already received development approval, so that they can enjoy faster gains.
Mr Nordmann emphasised that Profitable Plots ensures that all funds are placed in the hands of an independent trust which helps to safeguard the investments no matter what happens to the seller of the land.
I thrive in modelling...especially what the successful is doing.... And one of the things that has struck present day Singapore is the ever increasing amount of wealth that is handed down from this thing called property.. whether it be Enbloc... whereas developers pay a sum of money to dwellers for the sale of their property.. or whether is it just plain residential sale or rental... everyone seems to be becoming more well off... And indeed... one of the common thing now is overseas property.... So.. I bring you some news of what others had done in particular. To be sure, not all stories are success stories.. but you learn. The things about lessons.. is that you can get free lessons from the success or failures of others.. so that by not losing a dime, you get a load full of worthy lessons that in time to come, you benefit... We learn SIMPLY by standing on the shoulders of others... haha..And don't fret that there isn't going to be any more opportunities... Things like this do go in cycles.... So don't worry.. we will have our time.. so here goes...
Sep 23, 2007
Banking on overseas land
Thousands of Singaporeans have sunk money into undeveloped plots overseas in the hope of getting high returns. Finance Correspondent Lorna Tan talks to three investors who have ventured into this foreign territory.
FOR some, it is not enough to have a roof over their heads. Singaporeans' love affair with property has extended to owning raw land beyond the Republic's shores, with more than 10,000 opting for this type of investment.
In the 1990s, there was just one firm marketing such undeveloped land, or raw land.
But now at least five firms are selling land in Britain, Canada, Thailand and the United States. The latest two entrants are Profitable Plots, which offers British land, and Royal Siam Trust, which sells beachfront plots in Thailand.
Investor Helen Tay
FOR Ms Helen Tay, 37, it has been a long wait for her raw land investment to bear fruit, and she is still waiting. In 1998, the former lawyer turned network marketeer bought two plots of Canadian land for C$50,000 (S$74,485) after visiting a roadshow at a hotel.
It was organised by land asset management firm Walton International Group. Set up here in 1996, Walton markets plots of raw land in the Canadian cities of Calgary and Edmonton, as well as in Texas, in the US. It buys the land, keeps a portion for itself and sells the rest to individual investors, who in turn get a title deed in their name. Each unit of land costs about C$25,000.
Investors are typically advised that there could be a wait of five to seven years before the parcel of land obtains development approvals. When that happens, Walton will sell the land to developers at a higher price, subject to 60 per cent of investors consenting to the sale.
For Ms Tay, the wait to see profits from her plots in Northridge, Calgary, has been longer than expected.
'I still haven't seen my money. It's been a long wait...Back in 1998, I was given a forecast of five years. It's not a great investment but if the money comes in, it should still be better than putting money in a fixed deposit,' said Ms Tay.
But her long wait could be coming to an end. In May, she was informed by Walton that there was an offer to buy the land at a price that worked out to C$130,000 per plot. This would mean a profit of about C$96,000 for Ms Tay, after she coughs up a capital gains tax of 40 per cent to the Canadian government, plus transfer fees.
If she had bought one plot of land, the tax would be a lower 25 per cent.
Investor John Khoo
UNLIKE Ms Tay, another raw land investor, Mr John Khoo, 50, made sure he saw his plot of land before purchasing it. Mr Khoo works in a foreign bank here but has been visiting relatives in Edmonton, Canada every year since 1990. In 2004, he plonked about C$100,000 into two plots of land measuring 700 sq ft each (excluding the garden areas), after visiting the raw land sites to assess their appeal.
Mr Khoo took a loan for 60 per cent of the purchase price at an annual rate of under 2 per cent from a Canadian bank. He was also informed that he need not pay a property gains tax as it was his first property in Canada.
'Location is the most important factor and that means buying land near a mall, a train station, an oil field, a windmill, biodiesel farmland...If you don't go there, you don't really know what kind of site you've bought. So unless you are familiar with the area, better go see for yourself,' said Mr Khoo. Before investing, he also consulted banker friends who were familiar with the location of his sites.
Mr Khoo added that by the time land banking firms sell their plots to Asian investors, the good ones would have been taken up by local investors, who would have picked the cream of the crop of the raw land sites. The land that he bought had just received planning permission then, and two two-bedroom houses now sit on his two plots of land. The land is near a university in downtown Edmonton.
The value of his land has since doubled and Mr Khoo expects to pay a legal fee of about C$1,000 when he sells his land. Currently, he enjoys an annual rental yield of 10 per cent.
Investor Dr Chiu Jen Wun
DR CHIU Jen Wun, 45, said that 'the main bugbear of raw land investing is time', because you can never be sure when you can cash out. In recent years, the anaesthesiologist has invested in Canadian and British land, which he purchased from Walton and Profitable Plots. He declined to reveal the amount.
Early this year, he made a net profit of about $20,000 from two plots of Canadian land, which were about half an acre, or 0.202ha, each. He had bought them at $37,000 per plot, 41/2 years ago. Two years ago, he invested in British land. At that time, Profitable Plots was selling units of land with each ranging between £3,000 (S$9,044) and £28,000. Customers were told to expect returns of 2.5 to 14 times, said Dr Chiu. Profitable Plots has advised him that it may take five years to see results.
A personal friend of financial guru Robert Allen, Dr Chiu was motivated to invest in raw land as part of his overall investments so as to generate multiple streams of income.
'This is one allocation in my diversified balanced portfolio of investments,' said Dr Chiu, who aims for a minimum 7 per cent annual return on his investments. He adds that the advantage of buying British land for Singaporeans who do not work or live there, is that they need not pay either capital gains tax or stamp duty to the British government.
To boost the confidence of investors and to make it easier for them to part with their cash, both Walton and Profitable Plots offer some sort of buyback guarantee. Instead of opting for such a guarantee, Dr Chiu decided to wait it out in the hope of bigger returns.
At Walton, investors can sell the land back to Walton at the original purchase price in five years, based on an agreement. But this is believed to be limited to Canadian land and not US land. In fact, the firm used to offer a financing scheme at a rate of 11.75 per cent a year but it has since been withdrawn.
And Profitable Plots, which has paid up capital of $2.1 million, offers two ways of getting a return. Group operations director Andy Nordmann said: 'One is where the return is earned when planning permission is given and the land is sold to a developer. The other is a fixed return of 12.5 per cent paid annually. This allows our clients the choice of both a short-term and a medium-term investment strategy.'
The firm provides a warranty to all clients which allows a five-year opt-out with no loss of capital. And it also allows clients the flexibility of switching their plots to ones that have already received development approval, so that they can enjoy faster gains.
Mr Nordmann emphasised that Profitable Plots ensures that all funds are placed in the hands of an independent trust which helps to safeguard the investments no matter what happens to the seller of the land.
Sunday, August 26, 2007
Fundamentals of Showing a Home for Sale And the ART of Negotiation in Property Purchase
Create Wealth through Property
Showing Your Home
Prospective buyers never buy a house ‘unprepared’.
They want to see the house, inspect it, ask questions and satisfy themselves that it is the best choice. The presentation of your house should therefore be a Positively Overwhelming & Memorable Performance. (POMP)
Buyers usually come with pre-conceived ideas of what they are looking for in a house. They may even have gone around "shopping". They would have a mental checklist in their mind to help them arrive at their decision. Their issues must then be addressed to help the buyer come to a decision to buy your house. You have to look at the whole selling process through the eyes if the buyer. What you show is not as important as what the buyers perceive. Perception is king and as sellers, you must manage the perception of the buyers. This is also the same stage if you are a newbie estate agent..The P.O.M.P. can be divided into 5 stages and requires you to address several key issues to ensure a successful sale.
Stage 1: Preparation Stage
How to make your house more Appealing?
As mentioned in the preparation your house for Showtime, the objective of this stage is to create an emotionally stimulating environment to the buyers. The goal is to give them a ‘welcome home’ feeling and convince them that this is where they will enjoy the comfort and pleasures of life.
Stage 2: Probing Stage
What are the needs and behavioral patterns of the buyers? You have to understand the motives, wants and personality of your buyers. Only then, you can help them realize the value and benefits of your house better. You must uncover the needs of the buyers - a process similar to peeling the layers of an onion to see if the buyer matches the following ‘F.R.I.E.N.D’ ly criteria.Finance: Do the buyers have the money to buy the house?
Responsiveness: Are they willing to discuss and cooperate with you? Inclination: How motivated are the buyers about buying your house? Eligibility: Are they in a position to buy your house?Needs: Can you meet their needs and requirements? Decision: Will they have the authority to make the decision?
Stage 3: Presentation Stage
How to convince the buyers to buy your house?
Falling in love with a house is like falling in love with a person. It is better if the sellers are “unobtrusive” during the presentation of the house. This will make the prospective buyer feel more relaxed and be more open about sharing his or her opinions after viewing.
Stage 4: Prevention Stage
What prevents buyers from buying your house?
You must expect buyers to raise questions, doubts and objections. It is part and parcel of the decision making process. When prospective buyers raise concerns, it is an indication that they are interested in your house. The best way to remove a concern is to prevent it. To do so, you need to apply the 3 P’s strategy. You need to pre-empt a buyer’s potential concerns prior to meeting him or her. You need to prepare the appropriate responses and if necessary, respond to them proactively.Stage 5: Position Stage- How to make the buyers believe (logic) and feel (emotion) that your house is the best choice for them?You will do well to remember the words of Sun Tze, the famous military strategist, ‘Know your enemy…’ Why? Because prospective buyers will visit other properties and make comparisons before deciding to buy a house. It is therefore important for you to visit and study other show-flats and properties, especially those that are in your neighborhood, so to ensure that your house is well positioned to achieve success.
The Art of Negotiation
Negotiation is the process of influencing buyers to purchase your house at the best possible price, terms and conditions. It is not a platform to obtain everything you desire, however, if you plan carefully and negotiate effectively and efficiently, you can achieve the highest possible price for your property.
The following are some negotiation tactics to help you achieve better success.
Plan for success
Before entering into a negotiation, you need to know what you want and how you can potentially achieve it. There is no point in closing the sale only to find out later that you have lost much money in selling the property at the contracted price. Therefore, make sure you have done your homework on your property financial calculation in the beginning so as to achieve your desired results.
Always negotiate face-to-face
This is the best way to size up buyers and promote the value of your house. If you negotiate over the phone, it is easier for buyers to say “No”. They can also change their mind before they sign on the dotted line.
Set the stage
Always choose on appropriate time and place to negotiate with buyers. It should be ideally occur when they are in a good mood, not occupied with other matters and are in a position to make a decision.
Prepare yourself
An unprepared mind and uncontrolled emotion can kill the sale. If the atmosphere becomes tense or negative during negotiation it will not help to bring the sale to a close. Worse still, if there are disputes in which careless words are spoken, it may even kill the sale completely.
Negotiation is power play in action!
You should try to negotiate from the ‘superior’ ground. The party with lesser power, real or perceived, will find their position being eroded over a period of time. Power in negotiation is centered on your character (who you are) and competence (what you can do). To be successful, you should be able to build positive relationships, earn the right to be listened to and even be trusted. You need to be skilful in communicating to and persuading buyers to accept your offer. Project an image of professionalism and reliability. In addition, be pleasant at all times without being perceived as a pushover.
Negotiation is psychological
If you are not convinced about the selling price, do not expect to be able to convince others. You will only get what you believe, desire and deserve.
Negotiation is a management of perception
There is no need to be perfect to command the best returns although it helps. More importantly, you need to know how to influence buyers’ perception about the value of your house. From the dressing up of it to the presentation, you need to communicate the advantages of the house and help buyers perceive the tangible improvements that it will make to their lifestyle and returns on investment. The principle is: The more they want the house, the more they will pay for it. Generally, there is an upper limit to the fair market value of your property so aim high – this will at least leave room for negotiation. However, do not set too high a price. It will deter genuine buyers and possibly make them feel insulted.
Stretch the deposit
When a deal is agreed upon and the option form is signed, it should be accompanied by a non-refundable deposit (also know as option money). The sum of which should be large enough to deter buyers from defaulting it should also cover the cost for removing your property from the market.
Never reject an offer outright
Do not close the door permanently. Like fishing, always have a ‘bait’ to attract buyers to review and improve their offers. Throughout the process, you need to be patient and be sensitive to every move of the buyers. In conclusion, remember that all of us will have to negotiate something during our lives. It can be an educational, exciting and enriching experience. If executed correctly, it can help you get what you want not only in the selling of property, but also in other areas of your life be it business or leisure
JAMES WEALTH MANAGEMENT
Showing Your Home
Prospective buyers never buy a house ‘unprepared’.
They want to see the house, inspect it, ask questions and satisfy themselves that it is the best choice. The presentation of your house should therefore be a Positively Overwhelming & Memorable Performance. (POMP)
Buyers usually come with pre-conceived ideas of what they are looking for in a house. They may even have gone around "shopping". They would have a mental checklist in their mind to help them arrive at their decision. Their issues must then be addressed to help the buyer come to a decision to buy your house. You have to look at the whole selling process through the eyes if the buyer. What you show is not as important as what the buyers perceive. Perception is king and as sellers, you must manage the perception of the buyers. This is also the same stage if you are a newbie estate agent..The P.O.M.P. can be divided into 5 stages and requires you to address several key issues to ensure a successful sale.
Stage 1: Preparation Stage
How to make your house more Appealing?
As mentioned in the preparation your house for Showtime, the objective of this stage is to create an emotionally stimulating environment to the buyers. The goal is to give them a ‘welcome home’ feeling and convince them that this is where they will enjoy the comfort and pleasures of life.
Stage 2: Probing Stage
What are the needs and behavioral patterns of the buyers? You have to understand the motives, wants and personality of your buyers. Only then, you can help them realize the value and benefits of your house better. You must uncover the needs of the buyers - a process similar to peeling the layers of an onion to see if the buyer matches the following ‘F.R.I.E.N.D’ ly criteria.Finance: Do the buyers have the money to buy the house?
Responsiveness: Are they willing to discuss and cooperate with you? Inclination: How motivated are the buyers about buying your house? Eligibility: Are they in a position to buy your house?Needs: Can you meet their needs and requirements? Decision: Will they have the authority to make the decision?
Stage 3: Presentation Stage
How to convince the buyers to buy your house?
Falling in love with a house is like falling in love with a person. It is better if the sellers are “unobtrusive” during the presentation of the house. This will make the prospective buyer feel more relaxed and be more open about sharing his or her opinions after viewing.
Stage 4: Prevention Stage
What prevents buyers from buying your house?
You must expect buyers to raise questions, doubts and objections. It is part and parcel of the decision making process. When prospective buyers raise concerns, it is an indication that they are interested in your house. The best way to remove a concern is to prevent it. To do so, you need to apply the 3 P’s strategy. You need to pre-empt a buyer’s potential concerns prior to meeting him or her. You need to prepare the appropriate responses and if necessary, respond to them proactively.Stage 5: Position Stage- How to make the buyers believe (logic) and feel (emotion) that your house is the best choice for them?You will do well to remember the words of Sun Tze, the famous military strategist, ‘Know your enemy…’ Why? Because prospective buyers will visit other properties and make comparisons before deciding to buy a house. It is therefore important for you to visit and study other show-flats and properties, especially those that are in your neighborhood, so to ensure that your house is well positioned to achieve success.
The Art of Negotiation
Negotiation is the process of influencing buyers to purchase your house at the best possible price, terms and conditions. It is not a platform to obtain everything you desire, however, if you plan carefully and negotiate effectively and efficiently, you can achieve the highest possible price for your property.
The following are some negotiation tactics to help you achieve better success.
Plan for success
Before entering into a negotiation, you need to know what you want and how you can potentially achieve it. There is no point in closing the sale only to find out later that you have lost much money in selling the property at the contracted price. Therefore, make sure you have done your homework on your property financial calculation in the beginning so as to achieve your desired results.
Always negotiate face-to-face
This is the best way to size up buyers and promote the value of your house. If you negotiate over the phone, it is easier for buyers to say “No”. They can also change their mind before they sign on the dotted line.
Set the stage
Always choose on appropriate time and place to negotiate with buyers. It should be ideally occur when they are in a good mood, not occupied with other matters and are in a position to make a decision.
Prepare yourself
An unprepared mind and uncontrolled emotion can kill the sale. If the atmosphere becomes tense or negative during negotiation it will not help to bring the sale to a close. Worse still, if there are disputes in which careless words are spoken, it may even kill the sale completely.
Negotiation is power play in action!
You should try to negotiate from the ‘superior’ ground. The party with lesser power, real or perceived, will find their position being eroded over a period of time. Power in negotiation is centered on your character (who you are) and competence (what you can do). To be successful, you should be able to build positive relationships, earn the right to be listened to and even be trusted. You need to be skilful in communicating to and persuading buyers to accept your offer. Project an image of professionalism and reliability. In addition, be pleasant at all times without being perceived as a pushover.
Negotiation is psychological
If you are not convinced about the selling price, do not expect to be able to convince others. You will only get what you believe, desire and deserve.
Negotiation is a management of perception
There is no need to be perfect to command the best returns although it helps. More importantly, you need to know how to influence buyers’ perception about the value of your house. From the dressing up of it to the presentation, you need to communicate the advantages of the house and help buyers perceive the tangible improvements that it will make to their lifestyle and returns on investment. The principle is: The more they want the house, the more they will pay for it. Generally, there is an upper limit to the fair market value of your property so aim high – this will at least leave room for negotiation. However, do not set too high a price. It will deter genuine buyers and possibly make them feel insulted.
Stretch the deposit
When a deal is agreed upon and the option form is signed, it should be accompanied by a non-refundable deposit (also know as option money). The sum of which should be large enough to deter buyers from defaulting it should also cover the cost for removing your property from the market.
Never reject an offer outright
Do not close the door permanently. Like fishing, always have a ‘bait’ to attract buyers to review and improve their offers. Throughout the process, you need to be patient and be sensitive to every move of the buyers. In conclusion, remember that all of us will have to negotiate something during our lives. It can be an educational, exciting and enriching experience. If executed correctly, it can help you get what you want not only in the selling of property, but also in other areas of your life be it business or leisure
JAMES WEALTH MANAGEMENT
Friday, August 24, 2007
Selling... A Property...
Selling:
Setting the Price
Location, Demand, Economy
Wah.. Sometimes, its really difficult- After all, I have to give credit to estate agents for providing such a wonderful job.. But at times, you would rather do the ground work yourself.. so that you won't be ... ahem.. "tricked" into paying more.... Aahh... Its not the payment that matters but the $1 or more extra.. I guess I can put it into better use somewhere..??
The best way of knowing the true value of your house is to have an independent valuer to give you a valuation. They are skilled professionals who are legally liable for their services and have no financial interest in the sale. But of course, you would have to pay them their worth.
A good agent should be well aware of what similar houses in your area have sold for in recent months and can also access market analysis information that gives data on local properties that have sold or failed to sell, including the asking prices.
Always do a "Comparative Market Analysis" : Ask them to show how they have arrived at the price they are suggesting. The agent will need to consider market conditions in terms of buyer demand, interest rates, inflation rates and any other factors affecting the economy. If changes in the economy are influencing the way people are spending, the property market is likely to be effected in some way.
Your potential buyers too, should also have a fair knowledge of your house's worth, probably having seen every other house for sale in the area. Be aware however that it is in their interest to get it a lower price; so don't feel pressured into accepting a low offer.
Then Again, you have the sites here.. with ALL THAT LINKS.. rite?? Haha... Just click on one of those under the "Very Very Important Sites".. ALternatively.. you can Click on the "Value Addedness" Link Box On-Top...and search for a comparable property and compare the Selling Price... Both of these Links and advertisements are Provided F.O.C! BELOW !
Isn't that Great??
Word of Advice:
Always always delay selling off in the beginning of your "sales campaign". Call a few agents ..Compare a range of similar properties.. their differing prices ... Never Never agree to sign a Sales and Purchase Agreement or for that matter any "Intention to Sell" document.... unless and until you are ready to let go... THAT document once signed.. can be caveated... should there be a change of mind.. even if the price is moving upwards, to your horror! That document once signed imply an intention to SELL!
Setting the Price
Location, Demand, Economy
Wah.. Sometimes, its really difficult- After all, I have to give credit to estate agents for providing such a wonderful job.. But at times, you would rather do the ground work yourself.. so that you won't be ... ahem.. "tricked" into paying more.... Aahh... Its not the payment that matters but the $1 or more extra.. I guess I can put it into better use somewhere..??
The best way of knowing the true value of your house is to have an independent valuer to give you a valuation. They are skilled professionals who are legally liable for their services and have no financial interest in the sale. But of course, you would have to pay them their worth.
A good agent should be well aware of what similar houses in your area have sold for in recent months and can also access market analysis information that gives data on local properties that have sold or failed to sell, including the asking prices.
Always do a "Comparative Market Analysis" : Ask them to show how they have arrived at the price they are suggesting. The agent will need to consider market conditions in terms of buyer demand, interest rates, inflation rates and any other factors affecting the economy. If changes in the economy are influencing the way people are spending, the property market is likely to be effected in some way.
Your potential buyers too, should also have a fair knowledge of your house's worth, probably having seen every other house for sale in the area. Be aware however that it is in their interest to get it a lower price; so don't feel pressured into accepting a low offer.
Then Again, you have the sites here.. with ALL THAT LINKS.. rite?? Haha... Just click on one of those under the "Very Very Important Sites".. ALternatively.. you can Click on the "Value Addedness" Link Box On-Top...and search for a comparable property and compare the Selling Price... Both of these Links and advertisements are Provided F.O.C! BELOW !
Isn't that Great??
Word of Advice:
Always always delay selling off in the beginning of your "sales campaign". Call a few agents ..Compare a range of similar properties.. their differing prices ... Never Never agree to sign a Sales and Purchase Agreement or for that matter any "Intention to Sell" document.... unless and until you are ready to let go... THAT document once signed.. can be caveated... should there be a change of mind.. even if the price is moving upwards, to your horror! That document once signed imply an intention to SELL!
Sunday, July 29, 2007
PROPERTY BUYING (PART 1)
July 29
BEFORE BUYING, it is always prudent to check the most recent prices of HDB flats or any prospective PRIVATE PROPERTY ...Especially foreigners who come to Singapore to buy property... YEP!!
Anyhow….here goes:
HDB Flats
For checking recent transacted price of HDB flats, please click:
HDB Resale Transactions website
Private Property
For checking recent transacted price of private properties provided by URA, please click:
Residential Property Transactions website
And of course further information is given below................
BUYING (PART 1)
Be in a position to Set the Price
BEFORE BUYING, it is always prudent to check the most recent prices of HDB flats or any prospective PRIVATE PROPERTY ...Especially foreigners who come to Singapore to buy property... YEP!!
Anyhow….here goes:
HDB Flats
For checking recent transacted price of HDB flats, please click:
HDB Resale Transactions website
Private Property
For checking recent transacted price of private properties provided by URA, please click:
Residential Property Transactions website
And of course further information is given below................
BUYING (PART 1)
Be in a position to Set the Price
REMEMBER: LOCATION, DEMAND, ECOMOMY!!
What can I say? From experience, the type of houses that always give the BEST VALUE has always been properties located near the prime areas. They are near the CBD, Orchard Road, Bukit Timah, Shenton Way etc.. has rich History and is basically near Town or Sea. These are normally Condominiums or Private Landed properties.
Certain areas however also do enjoy positive returns based on proximity to MRT (Mass Rapid Transit train), bus routes, good schools, etc.
Why are these important? They are, because, in a few years time, when you do want to sell them or rent them, you need to know whether you have a prospective market. And it has always been an established rule for real estate investors that location is important!
Ask anyone…..
In a good time, these would fetch a higher premium. And even in a bad time, the value won’t fall as much as properties in other areas.
For HDB buyers, the make of your flat is an important consideration. Sometimes, the structure does play an important role: whether or not you need to spend another sum of money doing the renovation of your house. And things like: how high your unit is? This is important as the higher the unit, the more money it is being sold out for. And on average: an additional floor up commands at least a $1000 more in the selling price of the unit.
The best way of knowing the true value of your house, however, is to have an independent valuer to give you a valuation. They are skilled professionals who are legally liable for their services and have no financial interest in the sale.
You can use this valuation against the appraisals given by the agents you are considering hiring to see how accurate the agents have been in their assessments. A good agent should be well aware of what similar houses in your area have sold for in recent months and can also access market analysis information that gives data on local properties that have sold or failed to sell, including the asking prices.
Ask your agent to go through this information (usually called a Comparative Market Analysis) with you to show how they have arrived at the price they are suggesting. The agent (and therefore you) will also need to consider market conditions in terms of buyer demand, interest rates, inflation rates and any other factors affecting the economy. If changes in the economy are influencing the way people are spending, the property market is likely to be effected in some way.
Your potential buyers too, should also have a fair knowledge of your house's worth, probably having seen every other house for sale in the area. Be aware however that it is in their interest to get it a lower price; so don't feel pressured into accepting a low offer. It is strongly advised that you check the web-site given above, on the recent price transacted.
One simple way to know the demand is to look at the newspapers to get a ‘rough feel’ of the demand for a particular property. Another is by looking at Future Development Plans.. like government directions, public policies, etc.. And of course, this blog has already detailed a lot of recent developments. One can actually make some, if not, a lot of money by just following through the areas that had been en-bloc, or other areas that were targeted at and sold for a lot of money.
Another good gauge in whether a certain property is a good buy comes from the economy. Besides looking at the newspaper for the GDP figures, sometimes, it is pretty interesting to just take a cab around that portion of the area around your interested property and see whether there is “mechanized cranes around..” or whether there is any “construction” nearby…
This implies that there is demand for that place and is likely to convert to some “traffic of sorts” or some demographic changes in future. People come, people go. One needs to ascertain whether that property has some intrinsic worth. And if your research is done well, you can be assured of a good buy… whether you want to rent or sell in future or not, is really your call. Learning how to assess the value of a property is really the FIRST STEP in acquiring wealth through property.
To go to Property Buying Part 2
Thursday, July 26, 2007
Buying Vs Renting
July 24
Buying a house versus Renting from Someone else?
Consider the pros and cons of each and whether your motivation to buy matches the lifestyle you have or want to have.
Why buy?
There seems to be an inherent desire in most of us to eventually 'nest' and make our home somewhere. This usually means that buying a home is more desirable than renting and brings a sense of satisfaction and security that cannot be matched. Unfortunately, the rapid increase of values in the property market in recent years has pushed home ownership out of reach for some would-be first time buyers. However affordability does not necessarily equate with having a high income. Home ownership is a long-term goal, and requires planning, tight budgeting and saving strategies. Not everyone is willing to make the types of sacrifices this can sometimes require so it helps to consider some of the pros and cons of buying in order to examine your own priorities.
Advantages:
Security: Owning your own home brings a sense of satisfaction, security and stability. There are no lease conditions to worry about and you are no longer subject to the whims of a landlord who has control over the length of your tenancy and the cost of rent. Investment: As long as your home is appreciating or maintaining value, you are growing equity (ownership) in your home. This equity can be later used to secure further loans and will also provide security in retirement.
Savings strategy: In a sense, making repayments is like a type of forced savings strategy. The more you pay off, the more of your home you will own. Furthermore, once you have paid off your mortgage, you will free up a large portion of your income which will lighten your financial responsibilities. This is theoretically correct but I am more of the view that once you have paid around a certain percentage say: 40 percent, one is better off re-financing it to buy another property.
Lifestyle: Choosing the style and type of home for your lifestyle (or changing it to fit) is a huge incentive for many people to become home owners. In rented premises, time, money and effort spent on decoration and gardening will not return to you beyond the length of your lease and in most cases, the landlord will be very particular about any modifications you make in the first place. Owning your own home not only provides the freedom to change and improve your house as you like, but the process can become a productive hobby which may increase the value of your property at the same time.
Tax incentives: If you purchase a property for investment purposes, the interest on your mortgage payments is tax deductible. Likewise, an investor who lets their property to tenants can take advantage of the tax benefits of negative gearing. Status: The status of being a home owner is not only satisfying inwardly, but it provides other benefits from a financial viewpoint. As you make regular mortgage payments, you will establish a favourable credit rating with financial institutions which may be useful for future borrowing.
Disadvantages:
Struggle to save deposit: Depending on the market you are hoping to buy in, getting a deposit together can take several years of saving every spare cent of your income and changing your view of 'essential' spending quite severely. It can mean a lot more than taking cheap holidays, cutting out take-aways or limiting going to the restaurant. Buying in bulk, taking lunch to work, getting rid of credit cards and forgoing expensive outings might be just the beginning, not to mention switching to public transport if you have a second car or giving up expensive habits.
High Costs: Home-ownership can be more expensive than renting because you are responsible for the maintenance and repairs of the property, insurance, paying council rates, plus any improvements you want to make. If you have a large mortgage you may find more than half of your income going into repayments - a huge financial commitment. But of course, depending on the number of rooms you have, it is financially prudent if you can "rent out a room". That way, you pass the high cost to who-ever rents your room.
Price Depreciation: There is a risk in any investment that its value will depreciate. If this happens to your property you stand to make a loss in the event you decide to sell. But of course, you have a choice not to sell.
Interest rates: If your mortgage is subject to a rise in interest rates, you may struggle to continue making your repayments if interest rates increase. While renters can also face rent increases, it is possible to negotiate this with your landlord - or otherwise move.
Location bound: Some people are not settlers. They like to move around regularly. Whether it be for career or lifestyle reasons, the thought of being bound to one place seems boring or threatening to their sense of freedom. Moving regularly is expensive in itself, but the transaction costs buying and selling every few years is likely to cancel out any appreciation of the property.
Buying a house versus Renting from Someone else?
Consider the pros and cons of each and whether your motivation to buy matches the lifestyle you have or want to have.
Why buy?
There seems to be an inherent desire in most of us to eventually 'nest' and make our home somewhere. This usually means that buying a home is more desirable than renting and brings a sense of satisfaction and security that cannot be matched. Unfortunately, the rapid increase of values in the property market in recent years has pushed home ownership out of reach for some would-be first time buyers. However affordability does not necessarily equate with having a high income. Home ownership is a long-term goal, and requires planning, tight budgeting and saving strategies. Not everyone is willing to make the types of sacrifices this can sometimes require so it helps to consider some of the pros and cons of buying in order to examine your own priorities.
Advantages:
Security: Owning your own home brings a sense of satisfaction, security and stability. There are no lease conditions to worry about and you are no longer subject to the whims of a landlord who has control over the length of your tenancy and the cost of rent. Investment: As long as your home is appreciating or maintaining value, you are growing equity (ownership) in your home. This equity can be later used to secure further loans and will also provide security in retirement.
Savings strategy: In a sense, making repayments is like a type of forced savings strategy. The more you pay off, the more of your home you will own. Furthermore, once you have paid off your mortgage, you will free up a large portion of your income which will lighten your financial responsibilities. This is theoretically correct but I am more of the view that once you have paid around a certain percentage say: 40 percent, one is better off re-financing it to buy another property.
Lifestyle: Choosing the style and type of home for your lifestyle (or changing it to fit) is a huge incentive for many people to become home owners. In rented premises, time, money and effort spent on decoration and gardening will not return to you beyond the length of your lease and in most cases, the landlord will be very particular about any modifications you make in the first place. Owning your own home not only provides the freedom to change and improve your house as you like, but the process can become a productive hobby which may increase the value of your property at the same time.
Tax incentives: If you purchase a property for investment purposes, the interest on your mortgage payments is tax deductible. Likewise, an investor who lets their property to tenants can take advantage of the tax benefits of negative gearing. Status: The status of being a home owner is not only satisfying inwardly, but it provides other benefits from a financial viewpoint. As you make regular mortgage payments, you will establish a favourable credit rating with financial institutions which may be useful for future borrowing.
Disadvantages:
Struggle to save deposit: Depending on the market you are hoping to buy in, getting a deposit together can take several years of saving every spare cent of your income and changing your view of 'essential' spending quite severely. It can mean a lot more than taking cheap holidays, cutting out take-aways or limiting going to the restaurant. Buying in bulk, taking lunch to work, getting rid of credit cards and forgoing expensive outings might be just the beginning, not to mention switching to public transport if you have a second car or giving up expensive habits.
High Costs: Home-ownership can be more expensive than renting because you are responsible for the maintenance and repairs of the property, insurance, paying council rates, plus any improvements you want to make. If you have a large mortgage you may find more than half of your income going into repayments - a huge financial commitment. But of course, depending on the number of rooms you have, it is financially prudent if you can "rent out a room". That way, you pass the high cost to who-ever rents your room.
Price Depreciation: There is a risk in any investment that its value will depreciate. If this happens to your property you stand to make a loss in the event you decide to sell. But of course, you have a choice not to sell.
Interest rates: If your mortgage is subject to a rise in interest rates, you may struggle to continue making your repayments if interest rates increase. While renters can also face rent increases, it is possible to negotiate this with your landlord - or otherwise move.
Location bound: Some people are not settlers. They like to move around regularly. Whether it be for career or lifestyle reasons, the thought of being bound to one place seems boring or threatening to their sense of freedom. Moving regularly is expensive in itself, but the transaction costs buying and selling every few years is likely to cancel out any appreciation of the property.
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