Constant increasing demand for HDB flats in this COVID-19 era has driven up the prices of property and made house hunting extremely competitive.
Prime units easily have more than 20 groups of buyers on their first day of viewing. These units are often out-bid on the same day, while the rest of us are left to continue our house hunts without even a chance to make our first offer.
This process can drag on for months. We need to go about our house hunts strategically as buyers, especially first-time buyers. Being clear about our objectives and requirements can make it a smooth and stress-free affair.
Here are some guidelines to follow when planning for your house hunt:
House hunt strategy tips
1. Work out the numbers
You should get a loan assessment done with the bankers and/or apply for the HDB Loan Eligibility (HLE) letter from HDB. This will give you a number to work with for a start.
The rates that bank loans and HLE gives are drastically different. For bank loans, there any many different bank rates to choose from based on the different plans offered by the local banks. Fixed rates offer you stability while floating rates can sometimes give a significantly lower interest.
After deciding on a loan plan, you should do an In-Principal Approval (IPA). With an accurate calculation of our maximum budget, we can readily and safely offer any unit we desire without the worry of financial issues.
Lastly, we should also check our Government Grant Eligibility. The eligible amount will be deposited into our CPF upon the purchase of an HDB flat. The Government Grant can be used as part of the down payment for the purchase.
2. Do our research well
To be able to make a fast yet firm decision, we need to be clear about the requirements for our new home. While we may have a whole list of requirements, narrowing down and prioritizing our needs can make the process a lot easier and more decisive for ourselves. Take the time to discuss with your family the top 3-5 must-haves of your new home. Some requirements to think about are:
- Public transportation
- Carpark location
- Dropoff point for Taxis or Private Hire Vehicles
- Schools
- Markets
- Childcare centres
- Accessibility for elderly or disabled family members
With these requirements, pick an estate you like and look at the amenities offered around the estate using a map.
Tip: Instead of using Google Maps, use the Singapore Street Directory or One Map. These maps demarcate the estates clearly and mark out important amenities around the areas such as clinics, schools, carparks, and bus stops.
Using the map and the requirements you laid out, shortlist 3 estates of significant interest and rank them from first to third. We can then research and understand the transaction prices in the estates that you have chosen to have a clearer understanding of the justified price in the area.
3. Shortlist Unit Listings
With a good understanding of your finances and personal requirements, it is time to look for units to shortlist.
Use Real Estate portals such as PropertyGuru to look for units on sale in the estates of your choice. When shortlisting for units, some general features to look out for are:
- Unit layout
- Floor level
- West Sun coming into the unit
- How well-furnished the unit is
- We should focus on whether the unit requires major renovation. While a messy house may be off-putting, these are superficial problems that will be gone after hand-over.
- On the other hand, a beautiful set-up picture with a good camera angle may distract you from the fixtures that require money and time to alter, fix or remove. Remember that movables are unimportant!
- Surrounding amenities of the particular block
- While the estate was chosen as one of our top 3 choices, we need to ensure that the environment around the block that this unit belongs to is acceptable to us. Is our unit facing roads with daily heavy traffic? Are we directly above or facing noisy amenities? These are some points to consider.
- Empty plots of land
- For units facing empty plots of land, check if there are construction plans for the land through the URA Master Plan. Having an unblocked view can be a great factor for buying the unit, however, we may not be sure what might end up being built on the land.
4. View the house, focus on the details
After arranging viewings with the shortlisted units, we can finally start our home shopping. While it is easy for us to get distracted by the beautiful houses and the lively estate, the devil is in the details. Here are some key things to look out for:
- Check the ceilings and walls for seepage, particularly in the bathrooms and around the windows.
- For older flats, gently tap on the tiles to feel if it is hollow inside. Hollow tiles will need to be replaced, so we need to take into consideration the replacement costs.
- Although the kitchen cabinets may look beautiful and worth restoring, check if the wood below the sink is soaked with water leakage.
- Furthermore, check if the kitchen stove is still using the old gas cylinder. Replacing it with new gas piping may require dismantling of the whole kitchen cabinet.
- Removal of fixtures may seem costly, however, it is surprisingly one of the least costly works to be done. On the other hand, hacking of cement walls or cement buildups, or replacement of carpentry work will incur the greatest costs.
- Have a rough idea of why the owners want to sell their home. Talk to the adjacent neighbours, as well as those living above and below the unit. This is to ensure that you do not move into a hostile living environment.
- Corridor space and the neighbours’ usage of corridor space can also be an issue in the long run.
5. Wrap things up
If this unit seems perfect for you, there are likely many other buyers having the same feelings as you do. If you have already taken all the above steps, congratulations! You are now ready to offer the unit immediately. This can be a competitive process of negotiation and compromise, so be ready for that.
Engage a professional
Having a professional to discuss with and evaluate your ideas and decisions will improve the quality of your purchase.
While it may be tempting to save a few thousand bucks not to engage a real estate agent, a mistake in your decision can be much costlier than the agent fee.
An experienced agent knows the common issues that a unit has. They will be able to help you make an explicit and informed decision on your purchase.
Any real estate agent worth your time will sit you down and discuss your personal ideas and worries and factor them into your house-hunting journey. You will be sure that the decision you make is the best in any given circumstance.
Conclusion
Buying a house is a big milestone in anybody’s life. Whether we’re looking to buy it as an investment or to raise a family, we cannot afford to make any major mistakes in our decision. Taking the above guidelines into serious consideration can be tiring and time-consuming, but it is necessary for us to make the right decision.