HOW TO DETERMINE THE VALUE OF MY HOUSE?

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How much can you get if you were to sell your house now?

Whether you’re calculating your net assets or contemplating whether you should sell your house, understanding how much your house is worth roughly, is always beneficial.

The easiest way would be to get a professional realtor in to assess for you, but some may not be willing to do so (especially for free) if you have no intention to sell and thus engage their services.

So if you prefer to try and figure out how much your house is worth, here’s some methods you can use.

Location
Location is key. If you follow the sales trends of houses sold, you will soon realise that properties in a prime location will always sell for more (often even more than a bigger house in another estate).

Check how near your property is located to town.

Are there any major commercial districts nearby? (office workers there would be interested in your house then.) Houses that have a nearby shopping mall or schools are also in high demand on the resale market as parents often look to move somewhere near to their children’s school. This is particularly true for houses located within 1km of primary schools, as distance is a factor that gives their child a higher chance to get into that school.

Accessibility
Even if your house isn’t located in a prime district, as long as it is easily accessible and still convenient to get to places, it can still fetch a relatively higher price on the resale market. Ask yourself, how accessible is your house? If it is within walking distance to an MRT station, chances are that you will be able to sell it off for a higher price than one that isn’t. If a bus is required, how many stops away is it? What is the frequency of buses? Are there connecting buses nearby? How easy is it to get to your house via public transport?

Estate characteristics
It is no secret that a mature estate, often with already-built amenities and plenty of connecting buses or train stations, are often worth more than their younger counterparts. For instance, a house in Bishan will almost always fetch a higher price than its equivalent in Punggol.

If your house is located in a relatively young estate, you will also need to consider if the neighbouring blocks and clusters are young.

This could lead to a future problem whereby if every block in the estate is almost of the same age, then buyers will have more choices to choose from. When you’re a seller in such a scenario, you’ll be competing with each other to see who can exit faster i.e. check out the situation in Punggol and Sengkang, and see how many have sold their houses after the 5-year Minimum Occupancy Period (MOP) is up.

This usually happens in younger estates where the owners are often of a younger age as well eg. newlyweds. Why does this occur?

The answer is simple, because it is usually not their last home, and they upgrade in time to a new house or location (especially as their incomes rise over time, or lifestyle changes eg. kids come along). Thus, when more are selling, it leads to a scenario of supply being more than demand, and simple economics will tell you what the result of that is (lower prices! Good for buyers, bad for sellers).

Upcoming developments
If your estate has any upcoming developments planned for in the near future (or is perhaps already underway), this can raise the value of your house.

For instance, newer MRT lines (eg. Thomson-East Coast Line) would mean increased convenience and accessibility, making your house more attractive for potential buyers. With the Thomson-East Coast Line and Downtown Line coming up, it is stated that 80% of households in Singapore will now be located within a 10-minute walk from an MRT station.

An upcoming shopping mall would add to the current suite of amenities, which makes it more convenient for residents in that estate to obtain the stuff that they require, as well as increased foot traffic to the area. Don’t forget that schools and playgroups could also be set up there, thus making your house potentially attractive to parent of young children.

Any commercial hubs nearby would mean an increase in workers who would desire to live somewhere close to their workplace in order to save on travelling time every day.

One more development that is often overlooked would be whether there are any upcoming housing projects in your area.

This is important because it will affect your house value!

For instance, if the government is building more HDBs in your estate, this means that a few years down the road, these newly-built flats will be your competitor when it comes to selling (and a more attractive one at that!).

If you were to try to sell as high (or higher) than those flats, guess where a potential buyer will go to?

On the other hand, if more condominiums are being built in your estate, it could push up the land prices in that area, as developers buy the land at a more costly premium.

This then leads to a higher PSF when those are launched.

When your estate becomes a more expensive estates, then HDB prices may naturally be pulled up by the private housing located near you.

Recent market transactions
If your neighbour recently sold their flat for a record-high, then chances are, you will most likely be able to sell your house at a price close to theirs, or even higher.

Homeowners who do not understand recent market transactions and trends may end up ignorantly pricing their house at a ridiculous price, and then be left wondering why no one is yet interested to buy their house.

And the unwritten rule is that the longer your house remains unsold on the open market, the less attractive it becomes.

Also, don’t forget that if you overestimate the value of your house and price it higher than what it is really worth, you’re in fact doing a disservice to yourself and benefiting your neighbours i.e. other sellers in your estate instead, since their houses now look a lot more attractive (price-wise) when compared with yours.

Number of years left on your lease
Depending on the type of property you own, the length of your lease will also vary.

But it is also not always true that only freehold properties will fetch a higher price, for the years left on a house may affect the value of the house differently.

An ageing house, however, is almost always a ticking time bomb.

As the lease gets shorter, the next potential buyer may face more restrictions when they purchase it from you.

This has led to many scenarios where buyers end up having to fork out more cash, especially when their CPF usage limit or Loan Amount (Especially HDB Loan) is capped.

The viability and amount of their bank loan is also affected by the age of the house.

Having restrictions like these will also limit your houses to lesser qualified buyers, which could lead to more difficulties in selling.

Unbeknown to many, the CPF restriction applies not just to HDB flats, but to private condos as well.

You may understand more from an article that I have written below

https://sghomeprices.com/new-rules-on-cpf-usage-and-hdb-housing-loans-how-does-it-affect-us/

or from MND

https://www.mnd.gov.sg/newsroom/speeches/view/more-flexibility-to-buy-a-home-for-life-while-safeguarding-retirement-adequacy

.

Another alternative would be to use this CPF calculator here.

https://www.cpf.gov.sg/eSvc/Web/Schemes/CpfHousingWithdrawalLimits/CpfHousingWithdrawalLimits

If the remaining lease on a property is less than 20 years, no CPF or HDB Loan can be used.

However, HDB loan may still be available, especially if the remaining lease of the property is 20 years at the point of purchase and can covers the youngest buyer up to the age of at least 95 years.

In many cases, no bank loan can be used if the remaining lease on a property is less than 35 years either.

And if your property has a lease of less than 20 years remaining, then you’re sitting on a ticking time bomb, as no HDB loan, bank loan or even CPF can be utilised by the buyer.

This means that whoever buys over your house has to pay everything in cash at one go.

How many people will have that much surplus cash to spare?

All of these factors, my friends, affect the value of your property.

Keen on selling, but not too sure if it is the right move for you right now?

I can help you calculate the value of your property and advise whether your decision to sell your house is feasible.

Just leave me your contact details below and we can meet at your place for a discussion.

Click here to read more, if you want to find out https://sghomeprices.com/how-your-hdb-sale-proceeds-might-get-end-up-being-taken-by-cpf/

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