House Hunting

Spent the last three days viewing no less than 25 apartments near the two schools that Kristine may attend. After much deliberations, Grace and I decided to send Kristine to one school near where Kimberley's godmother lives. The school, AND kimberley's kinder, are in fact within the same estate, so it is a matter of taking a lift downstairs, and walking 100 meters to schools for Kristine and Kimberley. The other choice is in the embassy district, more fun as a neighbourhood, as it is closer to city centre, but same living space costs at least 60% more in rentals.

House hunting is surely unlike Melbourne here. It can get unwiedly and chaotic. For a start, it is possible to view a property with one agent but concluding price negotiation with another agent. The agents are very aggressive in chasing businesses, with the owners as well as the tenants. They will compete with each other as long as there is still a chance to snatch the business away. Just one required Grace to sign an exclusivity form agreeing not to deal with another agent on the properties viewed. We viewed many properties with several agents, and on day 2 settled on a shortlist of 3 properties for one agent to chase. The next morning, another agent offered to take Grace to some new viewings in the same estate. To avoid duplication, Grace revealed the properties we have viewed and our shortlist. The new agent immediately went on the attack and offered not just how well his firm can do a better job, but also 'guaranteeing' much lower rentals for the shortlisted properties. Excused by the axiom of 'When in Beijing, do what the Beijingers do', Grace allowed to the new agent to take over. Expect some closure today, Day 4.

The payment norm here is 1 month deposit plus 3 months advance. Letting fee is equivalent to one month's rent. Gross rental yield is around 4%. Mortgage rate runs at 7.4%. The market seems slow. Our 3rd agent has not closed any deal in a month, and we were their only customers this week. His firm is a BIG well-known global real estate firm. The more aggressive agent, our 4th, claimed he had closed 8 deals in 2 mths. Property market here seems poised for some potential sharp corrections, but many of the owners are not blinking. Two did ask if we wanted to buy them out, but majority declared they would rather keep their properties vacant.

One owner slipped his mobile number on a piece of paper to me, whispering 'Dont let him (agent) see it'. He was hoping I would deal directly with him so he saves on paying letting fee. We didnt like his property anyway. To make his kitchen look uncluttered, he stored his fridge and microwave in a closet.
Another interesting owner story is about owners' pride. On a shortlisted property we liked, the owner would not accept our offer of just RMB200 lower than his price. However, in order to bridge the diff and close the deal, our agent offered to reduce his letting fee by the same amount. He agreed with the agent, but only to another tenant, because he had previously stuck his neck out by declaring to us that he would rather keep his property vacant for RMB200 less. Rather peculiar decision, but surely a difficult character to deal with going forward.

Hopefully we can sign off on a lease soon. School is still a few weeks away but we wish to move early so Kristine can re-start her piano lessons early. At the same time, Grace has arranged with another agent to rent our place out. Viewings start tomorrow.