At a listing appointment one day in one of the apartments in East Coast, Singapore, I came to part of my presentation when the homeowner wanted a price at which I thought we should list the property for. In this particular scenario, the comparable listings were very easy to spot in the vicinity and the obvious list price was very clear to be between $1.2m to $1.25m to be competitive.

They said: “Another real estate agent had been there the day before and told us we should list around $1.35m." I was appalled. Out of curiosity they asked, why would another realtor tell us $1.35m since he knows that it is never going to sell? There’s no money in it for him if it didn’t sell, he would be wasting much time and effort and it just wouldn’t make any sense.

That is a valid question which I will explain the reasons below.

Firstly, they believe that by telling you what you like to hear, you will like them and continue working and listing your property with them. Slowly, week after week after week, they will have to keep returning to ask that you revise the price to the point that it sells. By then, you are already with them in the contract and there is no choice if you have a timeline to adhere to.

The problem here is that by that time your price is down to a realistic market level, which might have gotten it sold 3 months ago, the market has dropped another 2%. This is what we term as chasing the market. By the time you adjust to S$1.25m three months later, prices have dropped and you could be at S$1.2m.

Another reason is what we call the “Bait and Switch" tactic. There are discount realtors and companies who specialize in such tactics. The main reason is to attract more buyers to call in; they will show them your property and then swing them over to a much better priced one, in the hope that the comparison paints a better deal for the latter. Then, they take another buyer in and repeat the same thing. Your property exists as only a benchmark to how good the others are being priced as. As you can see, it would be in these agents best interest to keep you on the list so that they can keep using you and your home to close deals that would have been tougher if there were no stark comparisons. They do make money from your listing but at your expense.

Sometimes, it is an honest mistake attributed to the inexperienced agent or lack of market knowledge. Many agents claim to specialize in several areas. Anywhere they go, they claim to be a specialist in that area. Realistically, it is impossible to keep up with the knowledge and prices in every area in Singapore. They know that. But often, the owner does not.

Pricing a property cannot be based on what it sold 1 year ago as the market is changing every month. If an identical home was sold at $1.4m 2 months ago but now all the comparable ones are competitively priced and asking $1.25m, then if you are a serious seller, you would have to price your own property wisely to attract buyers. It does not matter whether it sold for $150,000 more yesterday if the prices today are all at $1.25m.

It is critical to find an agent that will compare, analyse and price your property correctly to sell the first time around. New units on the market tend to attract more buyers, especially those who know what they are looking for and are just waiting for the correct unit. This initial spike of potential buyers is the most important wave to catch. When you miss that, and have your property listed for more than 3 months in the market, buyers will know that they have more negotiating power.

The last thing you would want to do is to chase a declining real estate market. Contact us at +65 9691 9907 for a free consultation to get your home listed the right way on the first try.