Thinking of Selling Your Property?
Some information and selling tips for property owners.
1) Be sure the house is neat and tidy
Professionally cleaning your home does not cost much and must be done before putting it on the market. It tells prospective buyers that the home is well-maintained. Broken glass panels, leaky faucets, stained floor tiles, burned-out light bulbs, clogged drains, unsightly exposed wires, cracked wall paint, etc. should be fixed beforehand to enhance the property’s aesthetic value and attract potential buyers, but don’t spend a fortune—some cost-effective improvements that will give you a good return on your investment is the key.
Make sure your property is odour-free or smells fresh and brightly lit as well. Clean white walls are also the best to create a vital good first impression. Once you feel your home is ready, invite a friend to walk through your house as a buyer would and point out anything you may have overlooked.
2) Less is more
It is not necessary to make your home stylish to impress potential buyers. Having too many big furniture pieces makes it easier for people to move around a room freely. Avoid dark colours, de-clutter, reorganize and depersonalize. But don’t completely empty the house either because a vacant property seems rather cold and uninviting, not to mention empty rooms appear smaller than they are. It’s best to have a small amount of furnishings to help buyers visualize where they will put their things and how they will live in the home. And if you are selling to a fast buyer, there is no need to decorate your house at all (but always, always keep it clean).
3) Optimizing space and layout
Generally, the more bedrooms there are the better. Try to avoid converting bedrooms into a home office, study or game room, if it already isn’t. If there are no beds, leave it empty. A buyer can usually visualize converting an existing bedroom to fit whatever function they have planned out later if they wish to. Buyers will also notice the amount of storage space in closets and cabinets, so clear them out as much as you can. Large kitchen with adjacent or near to dining and living rooms are huge plus points too, as are the utility area/drying yard with ample space.
4) Fixtures and fittings
Do invest in modern appliances before you resell your property. Not only does it add to your sale price (as would a fresh coat of paint, landscaping, etc.), but potential buyers would appreciate the convenience of not having to buy one themselves and may not mind paying that little bit more. Do not underestimate the power of convenience, most people like experiencing the instant gratification even when it comes to buying properties at times and most buyers don’t have time to do the DIY jobs.
5) Well-kept garden and landscaping
Again, keeping your property neat is important. That goes for your garden and backyard too. Nobody likes having to trudge through long unkempt grass and avoiding broken flower pots. Landscaping and touch-up paint can greatly increase the curb appeal. Hire a gardener to landscape your garden and/or get the neighbourhood grass-cutter to trim the grass periodically. Try not to overly-landscape the garden either, because even though it adds to your property’s sale price, you may not get your money back when you resell.
6) Be aware of the market and neighbourhood
Sellers who are aware of such information can present their home more effectively and price it accordingly. Highlight interesting features and the unique selling points. Potential buyers appreciate getting as much information before they make such an investment and may probably choose your property for similar reasons as you first did. In a neighbourhood where several homes are being put up for sale, it would also be good for you to know who your competitors are and how much they are asking for.
7) Avoid overpricing
In a buyer’s market, overpricing your property is among (if not) the biggest mistake sellers can make. No amount of visual appeal will tantamount to a fast and/or definite sale, especially in these times when buyers are more educated about the property market and transactions. There is a saying, “The Golden Rule is the right selling price is the price that a buyer is willing to pay for the property.” It is important to consider that the current value of the property should not be based on its purchase price.
Having your property appraised by a certified valuer would be a good idea before inviting buyers to view the property. This will provide both parties with a more accurate indication of what the selling price in the area is as well as the details of other recent transactions involving similar properties within the same vicinity. Try to detach yourself emotionally and think of your house as a commodity that you want to sell instead of a home. Basing the price on needs and emotion instead of market value can be an expensive mistake. Be willing to negotiate even if just so slightly. Also, you can generally tell that a property is likely overpriced if it costs you a lot more per month than a comparable rental unit.
8) A photo is worth a thousand words
Marketing is one of the important aspects in selling a house. Some potential buyers do not have time to view too many options, nor might they not want to waste any. Showing them actual photos of your property could very well be the first, and in some instances, the only step. Creative and good quality photographs would help a great deal in the initial decision-making process.
Take interior and exterior photos of your home, and take plenty of each room. Consider them from typical angles and from unusual ones. Avoid zooming in onto furniture pieces or taking close shots, instead take photos in wide angles to give potential buyers an overall view of what the room or corner looks like. Keep in mind the photographs give a potential buyer the first impression of your home.
9) Help us help you – selecting a Real Estate Agent
Here is where real estate agents come in to assist. Appointing agents to help market your property is a common and effective practice, particularly for the following reasons:
- Selling a property can be very time-consuming. You will need to carry out tasks that include advertising and showing the property to prospective buyers, and these can be done by your real estate agent instead.
- Letting professionals market your property can increase the number of viewings and take less time to sell than if you were to do it on your own.
- With fewer viewings and less interest in your property, you may end up agreeing to a compromise and selling your property at a lower price.
You only pay commission to the agent who actually sells the property, and while using more than one agent will result in your property being more widely advertised, using too many agents can also discourage most of them from working hard on your property. When selecting a real estate agent, find an experienced one or two who specialise in your area or property type. They are more likely to have the right prospective buyers for your property, as well as help you sell at a good price, in less time, and with a minimum amount of hassle.
Once you have chosen your select group of real estate agents that you would like to work with, it would be most helpful if you could not only provide the property details, but also emphasise your property’s individual selling points and/or positive features, e.g. nearby schools, spacious kitchen, gated & guarded community, etc.. Take digital photos and send them to your agents, or allow them to pay a visit to inspect and ‘have a feel’ of your property. Photographs are powerful marketing/advertising tools when attracting prospective buyers.
10) Showtime!
Property viewings is when a potential buyer comes to have a look and evaluate one/several property(ies) with the sole purpose of eventually buying one. This is also what you have been preparing your house for, although the preparation doesn’t stop there. On the day of the viewing, you can take a few more extra steps to attract the buyers, such as opening all curtains and blinds, turning on lights to make the house bright, airing out the house to get rid of any odours, picking up clutter and emptying the garbage, having fresh flowers in view, putting on the air-conditioning to cool the room, removing pets from the house or putting them outside, providing a place for umbrellas in poor weather, etc.
Also, avoid overselling your property. Buying a property is an emotional decision. Rather than pointing out every improvement you have made, allow buyers to see it for themselves if they are comfortable with the property. Buyers will reject the property in favour of a less expensive one without features that they feel are of no personal importance to them.
11) Common mistakes by sellers
Apart from not poor presentation of their property during viewing and in the photos taken, as well as overpricing, there are a few more common mistakes that sellers sometimes make that leads to a missed opportunity or cancellation of transaction, such as:
1) Be sure the house is neat and tidy
Professionally cleaning your home does not cost much and must be done before putting it on the market. It tells prospective buyers that the home is well-maintained. Broken glass panels, leaky faucets, stained floor tiles, burned-out light bulbs, clogged drains, unsightly exposed wires, cracked wall paint, etc. should be fixed beforehand to enhance the property’s aesthetic value and attract potential buyers, but don’t spend a fortune—some cost-effective improvements that will give you a good return on your investment is the key.
Make sure your property is odour-free or smells fresh and brightly lit as well. Clean white walls are also the best to create a vital good first impression. Once you feel your home is ready, invite a friend to walk through your house as a buyer would and point out anything you may have overlooked.
2) Less is more
It is not necessary to make your home stylish to impress potential buyers. Having too many big furniture pieces makes it easier for people to move around a room freely. Avoid dark colours, de-clutter, reorganize and depersonalize. But don’t completely empty the house either because a vacant property seems rather cold and uninviting, not to mention empty rooms appear smaller than they are. It’s best to have a small amount of furnishings to help buyers visualize where they will put their things and how they will live in the home. And if you are selling to a fast buyer, there is no need to decorate your house at all (but always, always keep it clean).
3) Optimizing space and layout
Generally, the more bedrooms there are the better. Try to avoid converting bedrooms into a home office, study or game room, if it already isn’t. If there are no beds, leave it empty. A buyer can usually visualize converting an existing bedroom to fit whatever function they have planned out later if they wish to. Buyers will also notice the amount of storage space in closets and cabinets, so clear them out as much as you can. Large kitchen with adjacent or near to dining and living rooms are huge plus points too, as are the utility area/drying yard with ample space.
4) Fixtures and fittings
Do invest in modern appliances before you resell your property. Not only does it add to your sale price (as would a fresh coat of paint, landscaping, etc.), but potential buyers would appreciate the convenience of not having to buy one themselves and may not mind paying that little bit more. Do not underestimate the power of convenience, most people like experiencing the instant gratification even when it comes to buying properties at times and most buyers don’t have time to do the DIY jobs.
5) Well-kept garden and landscaping
Again, keeping your property neat is important. That goes for your garden and backyard too. Nobody likes having to trudge through long unkempt grass and avoiding broken flower pots. Landscaping and touch-up paint can greatly increase the curb appeal. Hire a gardener to landscape your garden and/or get the neighbourhood grass-cutter to trim the grass periodically. Try not to overly-landscape the garden either, because even though it adds to your property’s sale price, you may not get your money back when you resell.
6) Be aware of the market and neighbourhood
Sellers who are aware of such information can present their home more effectively and price it accordingly. Highlight interesting features and the unique selling points. Potential buyers appreciate getting as much information before they make such an investment and may probably choose your property for similar reasons as you first did. In a neighbourhood where several homes are being put up for sale, it would also be good for you to know who your competitors are and how much they are asking for.
7) Avoid overpricing
In a buyer’s market, overpricing your property is among (if not) the biggest mistake sellers can make. No amount of visual appeal will tantamount to a fast and/or definite sale, especially in these times when buyers are more educated about the property market and transactions. There is a saying, “The Golden Rule is the right selling price is the price that a buyer is willing to pay for the property.” It is important to consider that the current value of the property should not be based on its purchase price.
Having your property appraised by a certified valuer would be a good idea before inviting buyers to view the property. This will provide both parties with a more accurate indication of what the selling price in the area is as well as the details of other recent transactions involving similar properties within the same vicinity. Try to detach yourself emotionally and think of your house as a commodity that you want to sell instead of a home. Basing the price on needs and emotion instead of market value can be an expensive mistake. Be willing to negotiate even if just so slightly. Also, you can generally tell that a property is likely overpriced if it costs you a lot more per month than a comparable rental unit.
8) A photo is worth a thousand words
Marketing is one of the important aspects in selling a house. Some potential buyers do not have time to view too many options, nor might they not want to waste any. Showing them actual photos of your property could very well be the first, and in some instances, the only step. Creative and good quality photographs would help a great deal in the initial decision-making process.
Take interior and exterior photos of your home, and take plenty of each room. Consider them from typical angles and from unusual ones. Avoid zooming in onto furniture pieces or taking close shots, instead take photos in wide angles to give potential buyers an overall view of what the room or corner looks like. Keep in mind the photographs give a potential buyer the first impression of your home.
9) Help us help you – selecting a Real Estate Agent
Here is where real estate agents come in to assist. Appointing agents to help market your property is a common and effective practice, particularly for the following reasons:
- Selling a property can be very time-consuming. You will need to carry out tasks that include advertising and showing the property to prospective buyers, and these can be done by your real estate agent instead.
- Letting professionals market your property can increase the number of viewings and take less time to sell than if you were to do it on your own.
- With fewer viewings and less interest in your property, you may end up agreeing to a compromise and selling your property at a lower price.
You only pay commission to the agent who actually sells the property, and while using more than one agent will result in your property being more widely advertised, using too many agents can also discourage most of them from working hard on your property. When selecting a real estate agent, find an experienced one or two who specialise in your area or property type. They are more likely to have the right prospective buyers for your property, as well as help you sell at a good price, in less time, and with a minimum amount of hassle.
Once you have chosen your select group of real estate agents that you would like to work with, it would be most helpful if you could not only provide the property details, but also emphasise your property’s individual selling points and/or positive features, e.g. nearby schools, spacious kitchen, gated & guarded community, etc.. Take digital photos and send them to your agents, or allow them to pay a visit to inspect and ‘have a feel’ of your property. Photographs are powerful marketing/advertising tools when attracting prospective buyers.
10) Showtime!
Property viewings is when a potential buyer comes to have a look and evaluate one/several property(ies) with the sole purpose of eventually buying one. This is also what you have been preparing your house for, although the preparation doesn’t stop there. On the day of the viewing, you can take a few more extra steps to attract the buyers, such as opening all curtains and blinds, turning on lights to make the house bright, airing out the house to get rid of any odours, picking up clutter and emptying the garbage, having fresh flowers in view, putting on the air-conditioning to cool the room, removing pets from the house or putting them outside, providing a place for umbrellas in poor weather, etc.
Also, avoid overselling your property. Buying a property is an emotional decision. Rather than pointing out every improvement you have made, allow buyers to see it for themselves if they are comfortable with the property. Buyers will reject the property in favour of a less expensive one without features that they feel are of no personal importance to them.
11) Common mistakes by sellers
Apart from not poor presentation of their property during viewing and in the photos taken, as well as overpricing, there are a few more common mistakes that sellers sometimes make that leads to a missed opportunity or cancellation of transaction, such as:
a) (Not knowing when to stop) thinking that “There will be a better offer”
Sure, there’s almost always a better offer for your property. Holding out for a higher price is quite normal for sellers because they often believe that the first offer received will be one of many to come, hence the tendency to not take the first offer seriously. Unfortunately, sometimes there won’t be a better offer either, and you could, in fact, end up losing the first good offer and having to accept another one for far less money; especially when buyers come to know that the property has been on the market for a prolonged period of time. The first buyer could very be the best –or ONLY– buyer, so it’s best to seriously consider (if offer meets or fall just slightly short of your asking/negotiated floor price) it, or if you simply have to wait, don’t put the buyer on hold for longer than absolutely necessary.
b) Not knowing your rights and obligations
As with all legally binding document, knowing the “ins and outs” of the contract –or what we call the Sales & Purchase Agreement (SPA or S&P)—before signing it is extremely important for any seller (and buyer, too, of course). It is highly advisable that you get your own lawyer to review it before acceptance because an improperly written contract can allow the purchaser to void the sale, or unnecessarily cost you thousands of Ringgit; not to mention the headache and heartache that would come with it.
12) Selling costs
Here’s a basic structure of what kind of costs entail when selling a property:
Real Estate Agents’ Commission:
Up to 3% on the property’s selling price
Property SPA/S&P Legal Fees (if seller uses his/her own lawyer):
- For the first RM150,000, the legal fees payable is 1%
- For the next RM850,000, the legal fees payable is 0.7%
- For the next RM2,000,000, the legal fees payable is 0.6%
- For the next RM2,000,000, the legal fees payable is 0.5%
- For the next RM2,500,000, the legal fees payable is 0.4%
- For the remaining, if any, negotiable
Early redemption penalty:
Before selling, check your mortgage policy to determine whether any penalty for early redemption may be applicable.
Real Property Gains Tax (RPGT):
RPGT is a tax levied by the Inland revenue Board (IRB/LHDN) on chargeable gains derived from the disposal of real property. The tax is levied on the gains made from the difference between the disposal price and acquisition price.
In accordance to the rates of tax as per Schedule 5 of Act 169, Malaysian citizens (residents and tax-non-residents) are subjected to tax rate at 30% of the amount gained when disposing their real property within the first 3 years after the date of acquisition of the chargeable asset, 20% in the fourth year, and 15% for properties disposed in the fifth year; while the RPGT rate for holding a property for 6 years and thereafter is 0%.
For companies and non-citizens/non-permanent residents, click here for more info.
However, under the Real Property Gains Tax (Exemption) Order 2009 that was gazetted and taken effective since 1 Jan 2010, the property owner is exempted from the 5% RPGT under the following circumstances:
RPGT is a tax levied by the Inland revenue Board (IRB/LHDN) on chargeable gains derived from the disposal of real property. The tax is levied on the gains made from the difference between the disposal price and acquisition price.
In accordance to the rates of tax as per Schedule 5 of Act 169, Malaysian citizens (residents and tax-non-residents) are subjected to tax rate at 30% of the amount gained when disposing their real property within the first 3 years after the date of acquisition of the chargeable asset, 20% in the fourth year, and 15% for properties disposed in the fifth year; while the RPGT rate for holding a property for 6 years and thereafter is 0%.
For companies and non-citizens/non-permanent residents, click here for more info.
However, under the Real Property Gains Tax (Exemption) Order 2009 that was gazetted and taken effective since 1 Jan 2010, the property owner is exempted from the 5% RPGT under the following circumstances:
- Disposal of one residential property once in a lifetime (at any point in time);
- RPGT exemption of up to RM10,000 or 10% of the net gains (whichever is higher) from the disposal of real property by individuals; and
- Gifts or gains arising from the disposal of real property between parents and children, husband and wife, grandparents and grandchildren.
In addition, the RPGT is only imposed on net gains after deducting all costs involved such as the purchase price, renovation cost, legal fees, real estate fees (sales commission, typically between 2%-3%) and stamp duty.
For further information on RPGT or calculation examples, click here.
0 comments:
Post a Comment