Buying A Property? Ask These Three (3) Questions Before You Take The Plunge

Gladys Yeap GoodPlace

If you have been in the property game for long, you will soon realize that it’s an industry which is driven pretty much by emotions. The truth is that while we like to think that we make decisions purely on reason alone, in actuality we (often subconsciously) choose to buy based on our feelings (“This place gives me a good vibe”, “I grew up in a house which looks really like this”, “Our bed will really match the wallpaper and the carpet”, etc etc). And as we have said before, if you’re not careful, emotions will screw it all up for you.

The truth is that it’s easy to fall in love with a house especially when you’ve been looking around for some time and you’ve not been able to find something that fits into your budget. Your mind will start playing tricks on you, and you’ll try to find as many good things about the property as you can to justify your decision to buy.

GoodPlace Treehouse

And it goes without saying that making emotionally-charged decisions will often have disastrous consequences for the buyer. You’ll make mistakes like (1) paying well above the property’s fair price, (2) failing to take into account market fluctuations (you might not be able to unload the property later) and most often of the lot, (3) buyer’s remorse.

So what you’ll need is someone in your corner to advise you to make sure that you make sober and fact-based purchases. Now if you don’t have that ever important consigliere (I recommend linking up with a team of good agents if you’re going to do this seriously) then use this handy checklist below to make sure that you’ve got yourself covered before you make that offer to buy:-

Why is the seller selling?

This is by far my favourite question to ask the seller. If I get a smart alecky answer like “I like to sell, so I sell lah!” then I walk the other way slowly…

My neighbour's a dick

And of course, some sellers won’t be as forthcoming, but you’ll be surprised that many are willing to spill the beans because, well, for the same narcissistic reason that some people like to post pictures of their athlete’s foot on Facebook for the world to see. The “good” answers that you want to hear are:-

  • “I’m getting transferred to Timbuktu, and so I am selling this place.”
  • “We need a bigger home. My wife just gave birth to our sixth kid yesterday.”
  • “I need the dough to send my daughter to college.”
  • “I am getting married, and will be moving in with my mother-in-law. Can’t wait!”
  • “According to the Investment Advisor at my favourite property club, this place is going to dogshit.” (sucker)
  • “I sing in a Metallica cover band, and my neighbour hates heavy metal. I am moving in with my drummer.”

"Take my word for it!"

“Take my word for it!”

These are the “bad” answers to watch out for –

  • “This house is next to a kindie. I am sick of hearing kids yodel Twinkle Twinkle Little Star thirty times an hour.”
  • “I am divorcing my wife.” (beware of legal complications)
  • “I heard they are building a highway outside my window.”
  • “I have gotten mugged at knife point about twelve times last year outside my house.”
  • “The neighbour is in a Metallica cover band. I am sick of hearing his shitty version of Enter Sandman thirty times an hour.”

Free pizza!And of course, you can try to gauge the seller’s degree of desperation by seeing how eager he is when he is answering your questions. Again, any sign of desperation is probably bad although it may also present an opportunity for you to bargain down the price. But for heaven’s sake – not low ball the seller; move on if you can’t afford it.

What are the defects?

Not many know this, but sellers are obliged to fully disclose a complete list of the property’s defects prior to the sale. Ask the seller’s agent to give you this list if s/he hasn’t done so already.

And of course, some defects are easily fixed by the amateur handyman, but others may require the tender loving care of a (paid) professional. Estimate (together with the seller) how much it would cost to fix the problems and factor this into the purchase price. Any reasonable seller will accede to this request (note the emphasis on the word reasonable).

GoodPlace Garage

What is the fair price to pay?

We have covered this topic donkey times already, and if you haven’t read our somewhat popular PDF guide to valuation, then go do it. Nobody (and I mean nobody) apart from professional valuers seem to know (or want to know) how to value a property properly, and most people just base their asking prices off what their neighbours are asking – which is pretty silly if you ask me.

But they'll pay you a visit at midnight every night

But they’ll pay you a visit at midnight every night

Again, feelings play a large part when the seller sets the asking price – especially when he has developed an emotional connection with the place that he is selling (we all do). But this doesn’t mean that the buyer has to pay extra just because the seller had spent many delightful afternoons as a kid feeding his nana’s chickens in the coop at the backyard.

So, here’s what to do: make a trip to JPPH, and get a record of transactions of comparable properties for, say, the last three to six months. And use this data with the seller to mutually arrive at a sensible price. Of course, you can also ask your agent to do this legwork for you, and this is why picking a good agent is crucial to your property buying process.

About Khai Yin

When I am not writing for GoodPlace.my and helping my readers find properties though the DealMatcher service, I spend time doting on my three kids: Wenyi, Qinyi and Eian. My personal stuff, some published essays and contact details can be found at khaiyin.com

Comments

  1. Hi Khai Yin,

    Can we the layman just go straight to the JPPH and asking about the transaction history? How much we have to pay for this transaction ?

    And one more thing: I found this website XXX which provide services like JPPH… is this your website Khai Yin? hehe

    • Yes, anyone can go to JPPH and do a search for RM1 per transaction.

      I removed the website name because I can’t verify its legitimacy. Not mine. 🙂

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