What every home seller should know
Estate agents are starting to worry now about making the festive season more productive in terms of home sales, because listings tend to dry up between the end of November and the middle of January, mainly due to the belief often held by sellers that no-one wants to shop for a home during the holidays.
But, the experts say, that’s a myth, and neither agents nor home sellers should buy into it.
Rudi Botha, chief executive officer of BetterBond says the holidays are one of the best times of the year to put a home on sale and on show.
Couples are off work and families are together, so it is a great time for buyers to look, and because of the smaller number of new listings, the chances are that the property will get a much higher rate of exposure during its first month on the market – when the likelihood of a sale is highest – than at other times of the year, he explains.
Writing in the latest issue of BetterNews, he says other things for sellers who are cautious about listing now to consider are the following:
1. Buyers are keen to take advantage of low interest rates and higher affordability of housing right now.
Property lessons from Hurricane Sandy
The owner takes responsibility when the property sold is hit by a major disaster before the buyer takes transfer - owners should read cover clauses.
Tony Clarke, managing director of the Rawson Property Group, says insurance policies on property usually include clauses which reduce the compensation for which they are responsible, if and when a force majeure takes place in the insured property’s area – and this is understandable because weather catastrophes like the recent Hurricane Sandy on the East Coast of the USA have the potential to bankrupt an insurance group.
Flood insurance can be especially tricky if the home is sited in a known 50 or 100 year flood plain – as, for example, many of those washed away in the Laingsburg floods of 1981 were.
Today most municipal regulations are stringent about allowing building in flood plains, but the fact remains that many hundreds of South African homes are in such areas.
Clarke points out that when this is the case:
1. It is the seller’s duty to draw the attention of the buyer to this
Tips on buying a sectional title home
You are standing on the balcony of a flat overlooking the ocean and imagining yourself sitting on a deck chair sipping your favourite drink.
Beneath is a lush green garden with colourful flower beds, a play park for children and a sparkling blue swimming pool.
You have already calculated that if you cut back on some luxuries, you can afford to buy the flat.
Before you sign the offer to purchase, there are a number of issues which you need to consider.
As with almost everything in life, owning a sectional title unit has its advantages and its disadvantages.
Here is what you should be aware of:
Sectional title under administration
The worst thing that can possibly happen to a sectional title scheme is for it to be placed under administration.
This is according to Michael Bauer, general manager for IHFM, the sectional title management company, who explains this happens where a creditor applies to the courts for the scheme to be placed under administration as the scheme is insolvent, badly managed or is not fully functional. The courts would decide who the administrator would be and the administrator effectively takes the place of the trustees.
The problem here is that the administrator could then appoint a managing agent and receive the administration fee every month but is not bound to report back to the courts nor the owners on the progress of the recovery of the sectional title scheme’s financial health.
What has happened in the past, too, is unscrupulous managing agents have gotten schemes placed under administration purposely, in order to reap the benefits of management fees paid to them every month for no service.
The worst case scenario is that the scheme stays under administration indefinitely, the property values might drop and investors move in bulk to take over the scheme, says Bauer.
Property24 wins SA eCommerce Award
Property24, South Africa’s number 1 property portal, continues to add to their growing list of accolades, taking home the Best Classifieds Website award at the recently held 7th Annual South African eCommerce Awards.
Award winners were selected based on their ability to leverage the internet as a platform for commerce, with both the public and an expert panel from Jump Internet Technologies scoring nominees based on a series of criteria. Over 114 000 unique votes were received in just a month, with websites being assessed on everything from design to customer support.
Property24’s website, which was redesigned in October 2011, scored an exceptionally high overall rating of 91.1/100, based in part on its easily navigable user interface, as well as its ability to generate accurate search results.
Independent design company, Druff Interactive, which partnered with the awards committee to assess websites in terms of their look and feel, also scored the property portal favourably, identifying its intuitive, clean layout as a key strength.
Property24’s state-of-the-art WAP site, which has served to exponentially increase user traffic since its launch in late 2011, was also singled out for its ability to effectively mirror the efficiency of the desktop site across a wide variety of handsets.
Rentals struggle to outsmart inflation
Investments in the domestic rental market are not currently able to deliver yields above inflation levels, according to the latest PayProp Rental Index, although increasing house prices are putting upward pressure on what is currently a rather flat rental market.
According to Louw Liebenberg, PayProp CEO, the good news is that investors’ total return on their investments, including the capital value of their properties, is at its highest level since September 2011.
The average year-on-year increase in rental income currently stands at only 3.9%.
Using Absa medium-sized house prices, PayProp has developed a gross rental yield index. This index is recording gross rental yields of 6.1% for the month of September. It is up from 6.0% from a year ago, but also slightly lower than at beginning of the year when returns were closer to 6.4%.
The 6.1% gross rental yield is fairly constant and has not changed by more than 0.1% in the last four months. These gross yields have also remained fairly constant between 5.5% and 6.4% over the last three and half years, and at present are better than yields in a bank account where investors can expect to get only about 5%.
Buy a property that saves you money!
With the cost of electricity set to soar by a whopping 16 percent annually for the next five years, consumers should consider reprioritising their list of must-haves when shopping for a home.
That’s the advice of Richard Gray, CEO of Harcourts Real Estate SA, in the wake of Eskom’s tariff increase application to the National Energy Regulator of South Africa (Nersa). If granted, says Gray, the price of electricity will massively outpace salary and wage increases, and it will have a ripple effect on food and other living costs.
In light of this, he urges home buyers to elevate the importance of energy saving features such as gas cookers, solar water heaters (which experts maintain can save between 25 and 40 percent on an electricity bill) and heat pumps, in an effort to keep their household budgets under control.
Aside from the usual considerations such as the location and condition of a property, purchasers need to look at the energy saving features of the home they’re considering buying, says Gray.
“Properties offering solar panels, battery packs, back-up generators, energy-saving shower heads and energy-efficient appliances such as gas stoves make serious financial sense for those wanting to be able to contain their electricity costs.