How to Buy Below Market Value Properties
We all love bargains especially so if it is a real estate property sold below market value. But it is never easy to find undervalued deals in Singapore’s real estate market.
The reality is Singapore is not a depressed market. Nobody in the right frame of mind would choose to sell something for less than it’s worth. That’s not to say there aren’t any good catch in today’s market. You just need to know how to smell it if you see one.
Most Sellers are motivated to sell because of financial incentives, but there are also many other motivations why they choose to sell.
You know you are in superior position to turn it into an opportunistic buy if you understand why they are in urgent need to sell it fast.
Look out for the 4D
First D – When there is a Divorce
During a marriage break up, matrimonial assets are usually ordered by the Family Court to be sub-divided accordingly.
Sale of property on the open market for financial gain is one thing, sale of property on the open market by Order of the Court is another thing.
Asking prices are usually much more negotiable and realistic as both ex-spouses want to move on with their personal life by selling their properties fast.
Second D – When there is Death
Unnatural death like murder, suicide, accidental drowning, fire or even explosion can happen any where.
Should an unnatural death occurs within a property, more likely than not, buyers will avoid like a plague.
This becomes a psychological defect on the property. When sellers have no competitive bids they are more inclined to consider low ball offers, and you are more likely to buy at way below market price.
When the owner defaults on his mortgage payment, the lender (the mortgagee, usually the bank) has the right to recoup the loan amount through exercising its powers prescribed in the mortgage contract.
This is done through foreclosure of the property and selling it to the highest bidder in a property auction, on the condition that the offer is above a minimum “reserve price”.
Fourth D – When they become really Desperate
Look for any combination of the 4D scenarios.