Taking the emotion out of buying your dream home


When I buy stocks, I find myself unattached emotionally to the share or the company.  It’s generally easy to buy, hold or sell and costs are transparent.

However, things are not the same when it comes to hunting for our property.  After all, it’s going to be our home for years to come.  We are going to sleep in it, eat in it and share many of our family memories in it, for years.    We have to love it, or at the very least, like it.  Therein, I think, lies the pitfall of many a property buyer. 

We become too emotionally invested in it, so much so that we fail to dissect the property and see it as it really is - a consumer item which has its costs and benefits attached.  It’s also probably one of the most expensive items you will ever buy in your lifetime, yet the way we approach it seems to be a little cavalier.

My husband and I bought a private property many years back just before the property market went downhill.  It was, on hindsight, an emotionally-swayed one although we didn’t see it as such during those heady property times.  Property prices were rising and we could not see how we could afford a property in the future if we were to “miss the boat”. 

Just then, my husband’s colleague had also bought a newly-launched property in the east and he was one of the few astute investors we knew back then. Surely, we thought, he must be doing this for a good reason. So, after vewing the showroom twice, we bought a unit there. High floor, no pool view and no west sun.  We waited for the TOP while still staying in our own flat.   Frankly, we weren’t sure whether we would shift in or rent it out.  Our goals were not clear.   We just knew we had to get one, well, because everyone else seems to be doing it or thinking of it.

To cut a long story short, we ended up renting it out as we still needed to stay near our in-laws who were taking care of our young children.   As the market slowly went downhill and hit by a double whammy of a slowing economy and rising interest rates, we saw our home loan instalments going up but our rental stayed the same.  The colleague sold his unit at a good price but ours took a long time to get any offers.  Later, we realised, buyers seem to love pool views and our unit was, in some buyers’ opinions, at a rather high floor.  We finally sold it at a loss.

It was a painful lesson. A lesson, I hope, readers like yourselves will learn from too.   The learnings we gleaned from it were priceless though.  Now, my husband and I steer clear of emotions when we talk about property purchases.  To avoid history repeating itself, we decided we will zoom in specifically on resale units where you can at least touch and feel the “product” instead of visualising it from some glossy marketing brochure.

These are some things we do to take the emotion out of our home hunting:

1)   Discuss and agree on the “must-haves” and “nice-to-haves” in the property you want before you even step into any viewing.  This clears your mind as to what it is you are really looking for in your property.  Hopefully, it also lessens the amount of friction between husband and wife when it comes to selecting your dream home.

2)   Check out URA transacted prices, maintenance fees, any impending sinking fund top-ups etc which involve your own outlays

3)   View as many units as available.  I cannot overstate this. I now keep a file, no – two files - of all the units we have viewed with scribbled notes.   

4)   View the property in the day and evening time, taking note of the sun, noise and traffic conditions.

5)   Never fall for “preview” pressure tactics or agent “counter-offer” tricks.

6)   Be ready to walk away from a deal.  There will always be a good one.  Patience shall be rewarded.

Comments

  1. Thank you for your candid account of how one can lose money in property investment.
    Just one question, do you really need to sell if rental income is still rolling in?

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  2. Hi Financialray

    Yes, it was really a bad timing. Our loan installment was getting higher as interest rates climbed. So, even with rental income, we were effectively making a loss every month, and that does not even include the taxes and other miscellaneous items (e.g. repairs etc) that came with the property. We decided to cut loss. Another reason was my husband was being posted overseas and our family was going to be away in China for an indefinite period of time.


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