Why a property for sale is not for sale

And so I’m house-hunting again, this time very determined to buy a place for myself. This is the second time I’m trying to buy something here: I visited a few properties to invest back in 2009, but dropped my investigation when the market started to rebound in the most brutal way. Unlike locals I’m mostly looking at the secondary market as I want something now, not in 3 years. And once again I’m facing one of the worst plague of Singapore’s real-estate market: fake sellers.

As it turns out, at least half of the private properties listed on sale are actually not being sold. They are rented-out houses that the owner has not interest in selling, unless he can find a sucker willing to pay some insane amount of money for it. You can usually spot them because the asking price is way above market. This is not because the place is beautifully renovated, or because there’s some incredible rental yield, or because it’s a unique valuable property. No, the price is high because the owner isn’t trying to sell: thanks to mortgage rates that have gone down, while rents went up, he has a good and positive cash flow. So he sees no point in selling, unless some crazy buyer makes him an “offer he can’t refuse”.

Of course you often only really find out after you wasted an hour or two of your and the agent time, and disturbed the tenants, and made an offer, for nothing. Because there’s no real interest to sell, there’s no point negotiating: most often than not, the seller will not lower his asking price by even a dollar, and sometimes he will even jack it up during negotiations. Never mind that nobody is willing to pay his asking price: if the newspapers says the market will go higher, surely that means he should put a higher price right now!

One thing that I can’t figure out is why agents play along with these peoples by organizing visits and paying for ads. Obviously they should know it’s a waste of time and money, but I suppose they also want a chance of winning the lottery.