Spent sometime with the owner of this piece of land this morning. I am glad it is not widely known of its availability, or else I will not have the chance to help the owner sell this piece of land - 3.45km from the Kuala Lumpur Petronas Twin Towers, in a quiet surrounding.
At only slightly more than RM210 per square feet, it is cheaper than most of the bungalow land in the outskirts of Kuala Lumpur. A steal.
Too bad I do not have enough money, or else it is mine, without any hesitation.
Thursday, October 8, 2009
What is the right price?
I had a most interesting encounter this morning.
I was showing some properties at a high-end condominium project when an owner came up and ask if we (one tenant, 2 agents) are agents. Well, before I could open my mouth, the other agent quickly 'claimed ownership' of this owner. Kept him busy with lots of 'verbal diarrhoea'. We then proceeded to the owner's unit. This lady acted as if she is very familiar with the property, when it was her first visit to the project.
We saw the unit shown by the owner.
The unit is easily worth RM8k to RM10k. The agent's tenant who was with us has a budget of not more than RM4k.
What transpired was interesting. The agent actually asked the owner to lease his unit out at RM4k and the justification was the market condition, etc. What a load of rubbish. This is one of many agents who try to match a deal without considering the consequence - short and long term.
Let's take the perspective of the owner. If he was to lease at RM4k, his return on investment is <4%. I guess only an idiot will do that. An agent who push the price to half the market is a lousy agent, and owners should not give them opportunities to even look at their properties, not to talk about representing them.
And the perspective of the tenant? If an agent can try, although bound to fail, to push the price so low, she will not flinch from doing the opposite. Let's say they view a property that is worth only RM2k. I would not be surprised that she will strongly market that property at RM4k so as to get more commission. If I were the tenant, I would drop her.
The long term consequence if this was successfully matched? Owners will want to sell. Some may not pay management fees on time. Undesirable tenants, etc. Total downgrading of condo, and maybe surrounding condo's as well.
Your thoughts?
I was showing some properties at a high-end condominium project when an owner came up and ask if we (one tenant, 2 agents) are agents. Well, before I could open my mouth, the other agent quickly 'claimed ownership' of this owner. Kept him busy with lots of 'verbal diarrhoea'. We then proceeded to the owner's unit. This lady acted as if she is very familiar with the property, when it was her first visit to the project.
We saw the unit shown by the owner.
The unit is easily worth RM8k to RM10k. The agent's tenant who was with us has a budget of not more than RM4k.
What transpired was interesting. The agent actually asked the owner to lease his unit out at RM4k and the justification was the market condition, etc. What a load of rubbish. This is one of many agents who try to match a deal without considering the consequence - short and long term.
Let's take the perspective of the owner. If he was to lease at RM4k, his return on investment is <4%. I guess only an idiot will do that. An agent who push the price to half the market is a lousy agent, and owners should not give them opportunities to even look at their properties, not to talk about representing them.
And the perspective of the tenant? If an agent can try, although bound to fail, to push the price so low, she will not flinch from doing the opposite. Let's say they view a property that is worth only RM2k. I would not be surprised that she will strongly market that property at RM4k so as to get more commission. If I were the tenant, I would drop her.
The long term consequence if this was successfully matched? Owners will want to sell. Some may not pay management fees on time. Undesirable tenants, etc. Total downgrading of condo, and maybe surrounding condo's as well.
Your thoughts?
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