Why Is Why So Important?
So why is the why so important when you start looking at properties? Understanding this fundamental in decision making is not only applicable to real estate but the other facets of our lives as well. To better illustrate this thought process, I will be using Jack and the Beanstalk’s classic fairy tale as an example.
There are apparently many versions of Jack and the Beanstalk. But the most familiar one we all know started with the family sinking into poverty. To alleviate their situation and put food on the table, Jack’s mother told Jack to sell the only cow they have left. That way, they may still be able to survive for a while longer. To his mother’s disappointment, Jack traded the cow for a few magic beans. In fact, she was so upset with her stupid son that she threw the beans out of their window. My illustration only requires the introduction; you can find out the rest of this story by reading the classic.
Is Jack Really That Dumb?
The question is this. Is Jack really that dumb? Or is he a simpleton who got conned by the sly and cunning scammer? How can anyone be so stupid as to trade a cow for a few beans? Well, I believe when Jack went to the marketplace, he was distracted. This is no different from our experience of visiting a shopping centre. At first, you may have an intention of just getting lunch. But there may be many instances where you went back home with something else other than lunch.
I believe the same thing is happening to Jack. In the marketplace, there will be plenty of distractions. For example, Jack could trade his cow for farming tools, supplies and all kinds of other wonderful items. There are probably so many good deals out there for a full-sized cow, yet he chose the magic beans. The thing about the marketplace is that it is filled with all kinds of products. Products are what we called “whats”. As Jack was being distracted by all these “whats”, he forgot the main reason why he went to the marketplace. If you are not clear on your objectives, two things can happen. Someone else will decide for you, or you will end up without making any decision.
Unless We Are Very Clear On Your Objectives. We May All End Up Like Jack
From a real estate perspective, some buyers start to shop around to look at what is available in the market. They have no idea what they want or any clue on their final objectives. The property they are looking at can either be used for their own stay or investment purposes, whichever is suitable. Now, if you are not clear on your objectives, there is a very high probability you will end up like Jack.
Let’s assume you bought a property. On the surface, this property seems to be the best thing since sliced bread. Besides proximity to transportation nodes, it is also a stone’s throw away from multiple amenities. Rental yield is also excellent. Not only does it seem to fit your own stay purpose, but this property can also potentially appreciate in value.
After making that decision, you finally decide that you intend to stay in the property. However, living in that house is not a pleasant experience. As with all properties that are close to transportation nodes, there is a hustle and bustle associated with convenience. You cannot stand the human traffic and want to dispose of the property. Of course, capital appreciation for real estate takes years. You are now stuck in a situation you desperately want to get out of. The property’s value to you is now worth no different than Jack’s mom’s perception of those magic beans. You blame the agent who brokered the deal and may end up doing something rash, which may be no different than throwing those magic beans out of the window.
Hence, to make better decisions, we must all start with the “why”. Once you have an obvious understanding of why you want to purchase a property in the first place, you will not encounter what we call “Buyer’s remorse”. On the other end of the spectrum, some buyers have seen hundreds of homes without making any decisions. Their indecision will turn to regret as they realized that some of the properties they saw have gone up in value. At this point, some will continue to wait for prices to fall back to their initial levels. In reality, the opportunity has gone as the pricing gap continues to widen.
Why Having An Advisor Is Important
In addition to the “why”, Jack and the beanstalk also highlighted the importance of an advisor in the decision-making process. For example, if Jack went with his mom to the marketplace, it is unlikely that they will return with the magic beans. Similarly to real estate, property agents can act for either the buyer or the seller. The seller’s agent main purpose is to get the highest possible price for the magic beans, carrots or whatever produce the seller has. The main purpose of the seller’s agent is for the interest of the seller. From the seller’s perspective, the magic bean salesman did an excellent job.
On the other hand, the buyer’s agent purpose is to ensure that you reach your objectives. Due to the prevalence of information online, some buyers prefer to transact themselves without the need for a buyer’s agent. This is no different than going to the market without Jack’s mom. Without an advisor and the multitude of distractions, there is a genuine possibility that you may end up with the wrong type of beans in your pocket.
To navigate the real estate marketplace, why not speak with us today? Armed with various analytical tools and years of experience, we can help you either way. Be it disposing of magic beans or getting a good trade for your cow; we are there to help. Most importantly, we understand the “whys” and are never distracted by the “whats”. Meanwhile, stay safe and always start with the “why” first!
Article contributed by Jerry Wong.
Jerry Wong is a realtor with Propnex Realty. He loves coffee, cookies and condos and has been in real estate for ten years. Most importantly, he loves connecting people to properties and gets enormous satisfaction when they acquire their dream home. Or making well-informed decisions that see their assets grow. Book a video call appointment and Jerry will share with you the following.
- How certain factors affect real estate prices. Why some condos can make a million dollars while others can lose that same million.
- Why timing is not the most important thing. Because some people can buy the same condo at the same time, but one end up making $100k to $200k while the other suffers losses of the same amount!
- Understanding your requirements and craft a solution for your real estate needs. Be it in asset progression, tax planning, financial calculations, rentals, sales, etc.
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