We always see things like "early bird discounts" or "VVIP discounts" when there are new condominium projects here and although I am not saying that they are all just a lot of hot air, I think that it is only prudent that we take claims like these with a pinch of salt.
After all, I have not come across sales people who would tell clients, "Hey, don't buy. Even after the discount, it is still not value for money." Sales people must always say optimistic stuff to their clients and look the part too.
"Being a salesman and an actor were not that dissimilar: It is a good lesson in covering up your feelings. No one wants to buy from someone who looks depressed." -------- D. Scott
Someone who recently visited a showflat received a strong dose of such optimism and shared her thoughts with me in an email. I would like to share a little bit of it here:
"So how did the agent try to convince me it is a good deal? The usual talk on
1. FH property and offering to show stats on the ROI in the area.
2. Discount is very attractive. 8% special discount + 5% VVIP discount if buy this weekend.
If you refer to the transacted prices of nearby developments which I included here, it is obvious that there is no discount to speak of."
Comparing with recent transacted prices of surrounding properties is something I do too and that was how I snagged good (i.e. undervalued) deals before. Comparative analysis is quite simple to do and I do it a lot in my investments in the stock market.
Now, in another blog post, I asked, "why would we want to buy a property that has priced in future value?"
(See: Buying a property: Affordability and value for money.)
Although this is not the motive of the question, it could give an impression that property prices would definitely go up in future but what if they were to go down instead?
Entry prices are important and if we ended up paying prices too high, we would have no margin of safety to speak of.
We should remember that nobody cares more about our money than we do.
Related posts:
1. Buying an apartment: Considerations.
2. Where to buy shoebox apartments for investment?
3. Apartments with rental yields of 4.95% to 7.3%