How do you get the highest possible price when you sell your property? Most people would look to engage a real estate agent – someone who has a track record of successful sales at high prices. But is that really the best way, and are there any alternatives?
In our previous blog article, we talked about our bidding mechanism and its advantages for HDB property transactions.
In case you missed it, here is a nice table reproduced from that article that neatly summarises why the TRUBid platform is a better solution for HDB sellers compared to traditional methods.
Higher prices through bidding
However, there is one thing we did not talk about in that article, which would definitely be of interest to prospective HDB sellers. It is actually well known in research circles, based on actual data, that the auction or bidding mechanism can secure higher prices for the seller than traditional methods!
It makes sense when you think about it. The bidding mechanism means that all prospective buyers have to submit their offers within the auction time frame. This allows the seller to evaluate all offers at the same time, and identify the highest bid. Contrast this with the traditional method where buyers’ offers may come in at different and unpredictable times. How is a seller to know when the highest possible offer has been made?
So if you are looking to sell your HDB unit, you are potentially leaving dollars on the table by not using a bidding platform to find your buyer. Furthermore, when you add the reduced transaction fees, the lack of a protracted negotiation period, and the transparency in the price discovery mechanism, there is little argument for choosing other transaction methods over the TRUBid platform.
Don’t just take our word for it.
Quan (2002) in the article entitled “Market Mechanism Choice and Real Estate Disposition: Search Versus Auction” in the journal Real Estate Economics shows conclusively that the auction mechanism achieves higher prices for real estate transactions.
However, this is not just the conclusion of an isolated study with no other studies to support this. Neither is it a conclusion that applies only to particular foreign real estate markets.
More recently, Isa Hafalir, Abdullah Yavas together with Yuen Leng Chow (the last author being from our very own NUS!) did a study on the Singapore real estate market and came to the same conclusion! Their article “Auction versus Negotiated Sale: Evidence from Real Estate Sales” analyses the price points of successful real estate sales in Singapore from quarter 3 of 1995 to quarter 4 of 2006. This includes 777 sales by auctions and 2245 sales through the traditional method.
What they found should be of great interest to sellers of real estate in Singapore, particularly of HDB units.
These authors found that the price increase was most pronounced when the units being sold were apartment units which tend to be more physically uniform than standalone bungalows or houses. In other words, the prototypical apartment unit type in Singapore, HDB units, have historically achieved higher prices through the bidding mechanism than through traditional sales methods!
If this is true, then if you are trying to sell your HDB unit, it appears that there is really only one way you should be doing it: through a bidding mechanism.
The good news is, TRUBid platform allows you to do just that! So buyers of HDB units rejoice! The way to secure a higher price for your HDB unit is finally here.
All you have to do is get in touch with the makers of TRUBid!
Quan, D.C. 2002. Market Mechanism Choice and Real Estate Disposition: Search Versus Auction. Real Estate Economics 30(3): 365-384.
Chow YL, Issa Hafalir, Abdullah Yavas. 2015. Auction versus Negotiated Sale: Evidence from Real Estate Sales. Real Estate Economics 43(2): 432-470.