Mr. and Mrs. Kok, a couple in their mid-40s, entered my acquaintance back in 2014 when I assisted them in selling their HDB flat and upgrading to an Executive Condo. As their Executive Condo approached its 5-year Minimum Occupation Period (MOP), they approached me for advice on managing their property portfolio. Numerous questions clouded their minds: Should they go for a larger property? Should they revert to an HDB flat? Or should they invest in two separate properties, one for personal use and one for investment?
Following our discussions, they leaned towards upgrading to a bigger unit, moving from their current 3-bedroom condo to a 4-bedroom one. I gathered the necessary information and financial details from them and crafted a comprehensive financial plan. We delved into the numbers together, discussing the upfront cash and CPF required to execute their plan.
After much consideration, it became apparent that they needed to secure a buyer for their existing property to avoid paying the Additional Buyer Stamp Duty (ABSD) upfront. They were aware of the option to claim a remission of ABSD within six months of purchase if they successfully found a buyer for their existing property. After careful consideration, they chose to first find a buyer for their property, avoiding the riskier option of relying on ABSD remission.
Unfortunately, just a week before their property’s MOP, we found an ideal 4-bedroom condo that met their needs. However, regulations prevented them from entering into any purchase agreements before the MOP, so we had to pass on this opportunity. Regrettably, a week later, the property they had shortlisted was sold.
By a stroke of luck, I proposed the idea of them owning two properties instead of just one. They understood that this meant some sacrifices – potentially purchasing a smaller property like a 3-bedroom or even a 2-bedroom. They would need to set aside extra funds and involve another party’s name for the second property purchase. In essence, selling their current property jointly owned and purchasing two properties individually.
They were excited about this prospect, but we carefully delved into financial calculations to ensure their commitment remained manageable and within their means. Importantly, I stressed the importance of avoiding over-leveraging. After careful thought, they found it viable to invest in a new project while also purchasing a resale property for their residence. They decided to explore this option further.
We embarked on an intensive house-hunting journey and successfully found a 3-bedroom resale condo that met their residence needs and was conveniently located near an MRT station. Additionally, I recommended a 1-bedroom unit for investment purposes. Now, they have a place to call home and another property for generating passive income when it’s completed.
They are much happier now, realizing that by not putting all their resources into a single 4-bedroom property, they have diversified their property investments.
In my perspective, property is an asset that holds immense significance, often serving as one’s home. The decision to sell and buy can be smooth sailing or a potential nightmare if things go awry. Thus, meticulous planning is crucial for a real estate agent to guide their clients through the dos and don’ts of such endeavors.
I’ve had instances where I advised a couple not to sell and instead, stay put because they were pushing their finances to the limit, even though other real estate agents were urging them to upgrade!
Drawing from my own experience of navigating several property transactions, I can relate to the significant decisions people make regarding their most valuable asset. It’s perfectly natural to exercise caution, especially when entrusting your property to a realtor. Over the past 18 years in my line of work, I’ve successfully concluded more than 950 cases, and there are many more to come.
Once again, I raise a toast to the success of Mr. and Mrs. Kok!