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Even the richest are not immune to a slowing property market

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We want to sell our home today and we engage a real estate negotiator (REN). He advised us the current market price based on some recent transactions. Here’s a place for us to check recent transactions; Brickz.my  After the advertisement is up for a few days, our REN tells us a potential buyer called and wanted the selling price to be reduced by 30 percent. What will be our reaction? Maybe this: “Are you crazy?” I think this will be the reaction. In fact, this will be the reaction even if that someone asked for just a 10 percent lower price. Well, this is the buyers’ market as they say. (I disagree yeah, especially for really in-demand areas. Read this: Location Supply Scarcity.  A close friend just called the other day and told me that the price of my condo in Penang is now down by 30 percent. I said ‘that’s great news. Please recommend the REN who said so to contact me so that I can see if I should buy another unit.” Well, the agent has not called yet….

Anyway, this is not just for the Penang or KL property market. This happened to this famous billionaire investor in Laguna Beach, U.S. His name is Warren Buffett. The full article in ocregister.com here: Billionaire Warren Buffet chops price on his Laguna Beach home to $7.9 million  Last year, he wanted to sell his ocean-view house for US$11 million (RM45 million). It was not sold and now, the home is in the market for US$7.9 million. (RM32.32 million).  That’s a 28 percent drop from the original asking price.  The home is a 3,588 square-foot home and is a 6-bedroom house in Laguna Beach. He has owned the home since 1971 when he paid S$150,000 for it. (Yes, $150,000!!)  The home is only a block from the ocean and most rooms have views of the surf and rocks. There is a large family viewing deck which is separated from the main house. He uses the home only as a vacation home. This was not the only home Buffett has in the neighbourhood. He sold a house adjacent to this one for $4.3 million in 2005. That was a home for guests to stay. By the way, Buffett’s net worth is estimated to be around $86 billion (RM352 billion) by Forbes. The full article in ocregister.com here: Billionaire Warren Buffet chops price on his Laguna Beach home to $7.9 million  The image in featured image is also from the same website.

Coming back to the decision to sell a home we own. It’s far more important to understand the reason to sell. If it’s because there’s a potential good buy in the market, then selling our home faster is much more important than waiting for the next 9 months for a buyer. Else, we lose that opportunity to buy an undervalued property just because we think we are not getting a good price for our property. Of course, if we are ONLY thinking of putting it on the market to gauge the price, we could also do that but Ido pity that REN handling our case. Remember yeah, if your property has been ADVERTISED last year and it was NOT SOLD until this year, anyone searching for the same property may see the price. It’s not such a good idea because now the buyer will be even more motivated to negotiate for a lower price. Happy selling and buying. Market’s good I think.

written on 26 Aug 2018

Next suggested article:  Fully occupied condos will be more expensive

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