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Removal of property fee guidelines unlikely to have deep impact

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I really did not see the point for setting a mandatory commission amount.  But I believe the attempt had the best intentions.  The IEA represents about 7% of the agent population here in Singapore.  In an attempt to organize and standardize the training that agents receive and to put in place for the public to voice complaints, the IEA came onto the scene.  They have not been very successful because the major brokers like Propnex and DTZ decided not to join after they saw the IEA going in a direction that they did not desire.

This recent strike down of the Fee Guidelines is just another nail in the coffin of ineffectiveness of the IEA.  As I stated above, their intentions are in the right place but I think they lack the backing of the agency that could set things right.  This is completely my opinion.  The opinion being expressed is that of the blogger and does not reflect on his family, friends or future business partners. 

The only way the agents here in Singapore and the public can hope to see change is if the Singapore Government steps in to set the standards.  Right now most agents are know as "Cowboys".  If I decided to rope cattle then it would be appropriate but I definitely don't want a " Cowboy" to help me purchase a $800,000 SDG condo!!  Why "Cowboys" ,  it is easy, Any Auntie and Uncle can be an agent.  Just do down to your nearest broker and tell them you have some deals to do and "poof" your an agent. Now most agencies have their own training but from my limited contact with agents here, they lack something very important: ACCOUNTABILITY.  It really doesn't matter how much or how little training the agents have because if they do something wrong there is little a person can do short of going to court.  And even if the agent is a bad apple, they can just go to a new company and work there without any reprecussions. 

My sister in law recently received a license to be a tour guide.  She had to take over 100 plus hours of education and then take an exam that is not the easiest to pass.  What I think is bizarre is that the a Tour Guide needs a license but an agent does not?  I guess dealing with the biggest purchase in most people's lives is really not as important as taking some tourists on a guided tour of Clark Quay or the Merlion.  Again this is only my opinion. 

Another point that I thought was funny came from Chris Koh, director of Dennis Wee Group.  He described a possible scenario that would see an agent pocketing a huge commission on a very unscrupulous business tactic.  Here the phrase "Buyer Beware" is often quoted.   Add in the Seller and fellow agents as well because there are no rules for "Cowboys".

Singapore is usually on the cutting edge of everything but this part of their model is sadly lacking.  Regulation done in a proper way to promote higher ethics and standardization of the process is where I see their direction heading.

Finally, Singapore May See The Problems it....

On Thursday, July 24th, An article was publish in a local paper called Today. (Goto http://www.todayonline.com/pdf_main.asp?pubdate=20080724 ) The title of the article was "Oversupply Worse than Expected?" by Colin Tan.   Colin is head of research at Chesterton International .  And by far the bravest person to write anything about the possible Bubble in Singapore. 

I have been in Singapore since Jan 08 and I saw many of the same signs that my recent home of Las Vegas had shown.  Relatively quite prices and growth with the occasional twitch of something new would get hearts racing a bit.  Then all of a sudden, Boom, Bang and a Pop!!!, the lines started to form at builders.  They started to say they were sold out and had to make more.  People started to hear stories of their friend who just sold their home 10k above what they had asked for because two buyers came at the same time.  In rapid succession the lines double then triple and so did the asking price.  I once look at a home in the Southwest part of Las Vegas that was small with no yard.  They were asking $95 psf (per sq ft).  I thought it was high but during the Frenzy that same home went to $225 psf.  With current loans parameters, I could no longer buy a home.  Thank goodness the Banks thought of new inventive ways to lend money. (this is sarcasm for those who don't know me)

Singapore went through this same period but by my calculation and divinations, their wave started about a year and a half to two years after Las Vegas.  So what am I trying to say.....( dramatic pause insert music from your own memories)... "Singapore's Bubble is Coming".  I spoke to many agents here that all say the Singapore is different and I hope they are right.  But now I have some support.  Thank you Colin Tan.  How far will it drop?  We can only guess at this point, but all the signs are there.  I have seen the problems that arose in many areas of Las Vegas.  I can only hope there won't be the same carnage here in Singapore.

Singapore Property Market

Yesterday, in the Straits Times, an article appeared discussing a new report by "Citi" that is saying the over supply reported by others will not happen. Basically, I would caution anyone reading these reports by using a simple test before deciding to buy after such a huge increase.

I think most economist agree that a gradual, modest increase over a longer period of time is welcomed over a brief, record-breaking increase in sale prices. When prices rise faster than the majority can afford, I see a time to be prudent in making "buying" decisions. No one really wants Singapore market to go down but the reports are not being kind. This recent report is just the first one to go easy and they use numbers to back up their claims. How the actual buyers ares feeling about the market is just as important as the number you may produce. Much like in Las Vegas, the amount of buyers are slowing and dwindling. Though I heard the same in Las Vegas before the downward slide, "Singapore is different and they can handle a loss" I believe the signs are there to be wary.

In the report by Citi, they sited that not all project will be built as previously projected. There was a potential of 30,000 units coming onto the market by 2010. Citi's report now says that only 60% will be release onto the market. Because developers have decided to hold back project is a sign that the market is not very strong. Buyers see it as well because new release are not as quickly taken up. Citi's projections include a 20 to 30% loss in value. Others have projected higher losses in the Singapore property market. The average investor that came in with their recent en bloc gains will not weather a 20-30 % or more drop. This is why I say go back to basics before you buy and take all projections into your purchase.

Going back to the basic evaluation of the property is key. Location, Location, Location is often heard but does the novice buyer really take this to heart. A novice buyer being one who has made only a few transaction like his own home and maybe one or two investments. During the run up and eventual peak in both Singapore and Las Vegas, We saw a doubling and tripling of the amount of investors in the market. The market by sheer force took care of those investors with little knowledge. What is really scary is that I run into investors here that are just getting into the market. They heard that a friend of a friend made a lot of money by buying a unit. Sorry to say that that time has come and gone as quickly as it shot up to it's peak.

First, You must see the location of any property you're considering buying so while you are looking at the model, or showflat, Go and see where the unit will be located. Check for what is happen there. Check local shopping during the day and night and weekends. Are commercial business moving into the area as well. Are the restaurants full or empty? Also check traffic flow.
I know of unit here in Singapore that is near little India that may become a traffic nightmare for it's residents. It is adding a second entry point and exit point but on the weekend these streets are packed with pedestrians. Thank goodness for a the MRT.

Second, evaluate the rest of your criteria with regards to the purchase. These items include price, future growth, current trends, Rate of return, and anything else you can think of. During a peaking market, these areas overrode many decisions but now that the market is in Plateau stage, some of these gains may disappear.

My final thoughts are if you have a property that you need to sell then unload it as quickly as possible at a very attractive price. Better to lose 10% now then wait to see who's projections will be right in the future. If you can't sell then get a renter in there at the best and longest lease as possible. Because when even 60% of 30,000 units come onto the rental pool that will force down the rents.

Lost and Found

It has been over 5 months since I posted on this blog. It is not that I did not think about doing it but what I found myself doing is dealing day to day with my new environment. I can honestly tell you that the emotional roller coaster that you can experience while being an Expat can be life altering.

HR Professionals take note that if you don't prepare your expats for more than just finding them a place to stay and good schools for their children, they may not succeed at their assignment. I know that is a broad statement but I will speak more on this in the future.

Updates:

I have been working with a few real estate agents here in Singapore but mainly doing rentals as it is a segment of the market that seems to always have action.

I just attended my first Singapore Property Auction. More to come on this in future posts.

I realize that eventhough there is no licensing for Real Estate Agents here in Singapore, there are agents that handle in a month the same amount real estate value that Las Vegas agents handle in a year.

Singapore is ranked in the top 10 many recent rankings by Mastercard.

I think this will do for now. If you have any thoughts on the Las Vegas RE market or Singapore Real Estate Market then please contact me.

Singapore Arrivals

Our flight from Las Vegas to Singapore went by with the speed of a slow moving truck driver on his last batch of "no-doz" The final list of things to do before we left piled up to a point that I feared not being able to meet our plane on time. Past experience told us though our original flight was 8:45 am, it was wise to get there early and try to board the 7:30 am flight to LA. Luck was with us because the 8:45 am flight had been changed to 10:30 am and they wanted us on the earlier flight anyway.

Our Plane was new and each of our seats had the individual video monitor. We traveled from Las Vegas to LAX to Tokyo then on to Singapore- totalling over 20 hours of travel time. You have to hand it to the foreign air carriers, they tend to have great service and all the entertainment to help make this long flight bearable. I can tell you horror tales of my last experience with United but is was free so had to be done. So the advice today is don't just shop price for around the world trips, seek service and comfort. There is nothing worse then having to beg for water at 30,000 feet in the air.

Lets talk Airports for a second. Have you ever noticed the difference between most US airports and major airports around the world. With the exception of San Francisco and some of the others that I have not traveled to, many of the airports in the U.S. seem to be lacking in the cleaning area. I am amazed at how clean the escalators and people movers our in Japan and Singapore. I believe the term is Virtually spotless. I can't say the same for LAX. The U.S. does have some of busiest airports in the world but boy our image could use a little sprucing up. It also wouldn't hurt if some of the people working in LA would drop the attitude and be a little more courteous to people(customers) using their facilities. I am not talking about TSA people but those in the lounge areas or there providing directions.

Our excitement was mixed with the blur of being half exhausted as we landed in Singapore. We were welcomed by our Sister Aline and of course a little Singapore rain. With four large bags and two carry-on bags, thank goodness for a large van brought by another family member, Warren. Once we arrived at our close friend house, PG showed us where to drop our bags. Being that it was after midnight and we had finished with hugs and greetings, the subject turned to a main Singapore pastime, "Eating"

We had past a 24 hr outdoor noodle house just a few minutes walk from PG's house. So we grabbed a few umbrellas and set out to get a late night supper. The area we are staying at is very quaint in that most of the homes are 3 and 4 story mid-rises. Lots of lush large trees and vegetation towering throughout the outsides of the buildings, like the buildings were placed in open areas of the plant life. Did I mention that PG's home is a "Walk up" Flat? No lift!!! And we had 4 large, HEAVY, bags and two carry-on bags. No wonder I felt a twinge of hunger at 12:30 am. Not so bad after you catch your second wind and take deep breaths.

The first thing you notice at this 24hr noodle shop is that it is outdoors but under cover. The rain had moved to a drizzle as we walked but picked up after we finished eating. Every table was full except one and lots of good smells came from the open kitchen area. Jenny and I sat down as Aline and Warren placed our order with young chap looking a little wet from the local humidity or maybe it was because they were busy. There was over twenty people slurping noodles, soup and hot tea. We just added four more to their count. Within two minutes our four bowls of noodles and our big bowl of veggie soup was placed on our table. The steam rose from every item. Though it rained it is not cold by Las Vegas winter standards. I left wearing a coat in Las Vegas but wore short sleeves as we ate our quick served supper. Short of describing each bite, it tasted great. I would say it would compare to a home cooked meal but without the mess of clean up. In Singapore, these shops are everywhere and are the "fast foods" of the neighborhoods. There are the McDonald's and even a Burger King right when we came out of the airport but the difference is that the food was real good and we all ate for under $9 U.S. total.

A short walk back, another thing that is not done too much in Vegas, and we are ready to say goodnight. Through the haze of being tired and our excitement, I wonder what we will miss first from Las Vegas.

We have lots to do and many people to meet to work on our Real Estate Plans.

Removing the Clutter when relocating

I have sent so many postcards out to clients during the spring to announce the time to do spring cleaning. I wish I had sent a few to myself. I really didn't think we had too much extra stuff but boy was I wrong.

As a Realtor dealing with relocating clients, keep in mind the mountain of things that they had to do. Now they might have a service that is provided by their company but even with a service they may be distracted or concerned about the whole process. Ask them where they are at in the process. If your are showing homes or rentals to a client, they will really appreciate the attention to their struggles in relocating. You may not have to offer a solution but you may just be a ear to listen.

Here is some of the things that I had struggles with and where I found some relief.

1. Determine what you are taking and what is staying. How much do you want to store if you are not keeping a residence in your current location?



2. Contact local charities early on in the process for those items you want to donate. Sometimes the charities will not take your items. So call early!!!



3. In some cities, Craigslist is a lifesaver. If you are trying to sell items like furniture or office equipment then it is highly effective. Remember just like selling a home, Price is a factor. I even looked in Singapore to see if they use Craigslist and they do. So I may be getting some items I need that way.



4. Are your clients relocating a pet? This could add considerable frustration to your clients move. Some countries have specific rules regarding pets. We are bringing a cat to Singapore and they require health checks, tracking chips installed and a 30 day quarantine period. I only thought that bring my cat on the plane was the only worry.



5. If your clients are trying to get rid of a lot of items and they can't sell them, encourage them to call friends, family, co-workers, and church. We found a lot of help from these people.

Now these are not all the struggles we have had but I decided not to rail on the cox cable company or local cleaning companies that failed to even show up for their schedule appointments. Ask me and I will tell you but you may just shudder with fear when you hear how some people do business.

I would like to thank our family in the US, from Mom to our Sister Germaine, for all the help they provided. And especially our friends George and Mary for being a huge relief.

As we finish the last of the items before we go, we now realize that we had way too much stuff. I challenge anyone reading this if you have a garage or storage area that you have boxes that you haven't opened since the last time you moved, its time to let go. Don't take spring cleaning for granted. And remember to donate, your junk may be someones treasures.

NEXT STOP--SINGAPORE!!!

Too Sick To Move?

I just can't believe my luck some times.

The last few days have been a blur. It would be happy to say that I spent the last few days doing last minute shopping for my loved ones. Or maybe I had clients that came into town that made a big purchase. I could even be satisfied with being able to go to a Christmas party here or there. But as the picture shows, I have been in bed with the flu.


The positives of sitting in bed and watching television could be lauded by most couch potatoes but with the fact that there is just a few short days left before our move and several hundred things to get done before we leave, I did not have time for this at all. For those who don't know, Jenny and I are moving to Singapore. I have told a lot of people and I get a blank stares only about half the time. You know the kind of look that someone gives you when they think you're joking or maybe they are waiting for me to add a big --NOT at the end of my announcement. The other half tend to say" that is great I'd love to visit CHINA!!!!" aargh!!! I then tend to stare at them with the blank look, longing for the NOT joke to happen. It never comes though. Most friends are happy with the opportunity that it poses. They are encouraging for the risk that we are taking. Of course there are some friends who are worried that we are making the biggest mistake of our lives. But we agree that there really isn't a mistake that can't be overcome unless it is one that ends your life. Okay on that happy note-- back to being sick.


The best thing about being sick is getting better and of course the loving care that came from my family during my down time. I could not have asked for any more attention. But besides getting attention and rest, I was able to talk about my blog with Jenny. With her suggestions, I have decided to not only talk about investing in Singapore and Las Vegas but I am also going to use this forum to describe the details of a move for an expatriate. First hand knowledge is always the best.

So as my head clears, I will post more items to describe how this major move is taking shape and how it is affecting everyone involved. Until then-- Have a Blessed Christmas.

Phipps International -Ron Phipps is a Licensed Realtor in Las Vegas, NV and a Certified International Property Specialist.

There must be a beginning!!

As 2007 comes to an end, some real estate agents will say they had the best year in their career but there were many more who did little to no business. I would also say that the many investors have found themselves in one of the above categories. Most likely it was the little to no business category. Goldman Sachs chief executive Lloyd Blankfein is rumored to be making $70 million for the terrible year. He made only $54 million in 2006. What am I getting at with this rambling beginning?

In writing a blog that people may want to read, use or even comment upon, I have to make this promise to any potential readers. First, I need to be focused on the tasks at hand. I will spend much of my time doing the research so that I can offer you something that can make you want to read and come back for more. This blog is going to enlighten some of you to the knowledge that the world is smaller than you thought it was. And real estate is even local whether you live in southeast Asia or southwestern United States. My area of expertise is from my career in real estate and my love of travel. In 2008, I will be living in Singapore. This unique perspective of the world of real estate will shine the light on just how local the world is.
Why Las Vegas? Well, I am moving from Las Vegas to Singapore. Also if you don't know a 3.6 billion dollar casino resort is being built in Singapore by the Sands Corp. I see the connection and now I need to show the rest of you who don't.

By the way, why did the above CEO make more in such a bad year? They bet that the market would decline and it did. Real Estate moves in cycles and if you are positioned with the right info you can take advantage during all cycles.

Thank you for taking the time and look for the first installment Jan 03, 2008--"Why should I invest in .......?"

Phipps International
Ron Phipps is a Licensed Realtor in Las Vegas, NV and a Certified International Property