Friday, July 18, 2008

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Developers pay Agents to Push Sales with Higher Commission: Buyers beware of sales tactics: REAL ESTATE BUYERS GUIDE

According to a news report by Business Times, developers are paying property agents 2% or more, compared to the 0.5% in the past, to push sales.

To further motivate property agents, the commission rate may go up to, say, 1% more nowadays, once a certain number of units have been sold.

Under such handsome rewards, it'd be natural for property agents to push developers' projects.

While this should not deter property buyers from buying the properties they want, property buyers should be careful that they do not make impulsive decisions because of sales pressure or any such sales tactics exerted by agents.

Tactics employed by agents are focused towards getting the buyers to commit immediately rather than time to work out a prudent decision. Agents may, for example, show buyers that the price offerred is below current replacement cost, either because the developer bought the land cheap or locked in construction costs early. Or agents may tell potential buyers that the developer will raise prices once it achieves a certain percentage of sales. These tactics work, according to some agents.

One technique I've adopted to avoid making impulsive decision under sales pressure is NOT to visit showroom with my cheque book. Even if a buyer is completely sold, some time off from the sales environment will allow him to reconsider his decision more rationally. Other strategies may include bringing along a trusted impartial party, preferably one with substantial property-buying and property-owning experience, who may be able to point out problems that are easily over-looked by an all excited buyer.

Most importantly, property buyers should do all their homework, especially in financial planning, even before starting their property hunt. Here's a Checklist for Buying Property .

May also want to read:
Buy or Not Buy: How to decide amid mixed market signals
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life


Anonymous said...

Whoever you are, thanks for the public service by starting this blog.
Great Info!!!

Smart Buyer said...

Thanks. I'm encouraged.

Smart Buyer said...

Hi all readers,
If you should find the information here helpful, kindly promote it, such as making a link to this site or tell a friend. It'd help me better justify the time spent on this blog and to make it more helpful.

Thank you.

Anonymous said...

Great blog! Most informative!
Keep up the good work!

Smart Buyer said...

Thank you for the encouragement!

Phantasia said...

Hi smart buyer,

Just wanna say thanks for your response to my query earlier in another post. And also for the very informative blog! Have learnt much from your postings! Thanks for sharing.

Smart Buyer said...

Dear Phantasia,
Thank you for your compliment.

I've gained a lot myself too through interaction with guys like you.

My best wishes to you and all property buyers!

Post a Comment

Dear visitors:
Your comments are most welcome!

The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.

Smart Buyer :)