Beware sect. title building penalties
Read your Home Owners Association (HOA) constitution carefully before buying into a sectional title estate.
Absa's senior economist, Jacques du Toit, says buying a stand inside a security estate might have been a dream come true a few years ago, but if your financial position has since changed, building penalty levies could be causing a headache.
To eliminate speculators and get genuine homeowners to buy into developments, Home Owners Associations (HOAs) have building clauses which stipulate that building must commence within two or three years to avoid inconvenience to other residents. "It also helps those who have already built to maximise their investments."
However, the current economic climate has seen a change in many people's financial circumstances, pushing them into a situation where they can no longer afford to start or finish building. At this stage, there are possibly no other buyers for vacant land if the property market has taken a dip, and the owner of the stand is stuck without options.
New product to insure unpaid levies
A new insurance policy will soon be launched and can do away with unpaid levy problems.
Santam has taken a major shareholding in a new company now launching a unique financial product tailor-made to alleviate the serious liquidity problems experienced by South Africa's bodies corporate (BC) in the sectional title property sector.
Stilus (an acronym for Sectional Title Levy Underwriting Security), the new service, undertakes to fund bodies corporate (BC) in which some members have fallen behind in their levy payments and to take full responsibility for collection of those arrears from the defaulters.
Homebuyers empowered by new Act
The Consumer Protection Act (CPA), due to take effect on 25 October this year, will mainly force agents to ensure property sellers and buyers understand the wording and legal effect of all contracts they enter into.
If this is not complied with, the Act gives wide latitude to the consumer to seek legal recourse and compensation.
Simon Raab, Southern Suburbs manager for Greeff Properties, says property marketers will find themselves "in a new ballpark" when this Act is implemented.
Why waiting to sell home won't help you
Potential sellers who are holding out for much better prices, will eventually be disappointed for two reasons.
Lanice Steward, managing director of Anne Porter Knight Frank (APKF), says although house prices are indeed showing good signs of recovery, buying and selling in the same market levels the playing field.
"I'm finding that some clients want to hang back about putting their properties up for sale in the belief that, if they wait another six to 12 months, they will get a far better price.
"While there is some truth in that idea, it should always be borne in mind that if you are selling to buy another home, the new property will almost inevitably also have increased in value. And if you are planning to upgrade, the gap between the price you get and what you will have to pay will in fact be bigger as conditions improve."
Virtual staging: Is it ethical?
There is nothing wrong with "staging" your home in order to make it more appealing to prospective buyers, but the Internet has brought some unethical banes that could dupe buyers with altered images.
"There is obviously nothing wrong with dressing up a property to look its best on show day. Similarly, there is nothing wrong with photographing the best features of a property to use with an online listing," says Berry Everitt, CEO of the Chas Everitt International property group.
Online property info can overwhelm
Online information about properties is becoming evermore essential in the digital and knowledge age, but its use also comes with a caveat.
Martin Schultheiss, CEO of the Harcourts Africa property group, says although valid information on the Internet certainly makes buyers' decisions easier, it can often be overwhelming and devoid of crucial nuances. "Vital statistics about any given area are just a few mouse clicks away and a quick search can reveal current and historical price trends, crime stats, neighbourhood demographics, community services and much more.
Location, location, location?
"Location, location, location" are three words of advice that have been around for so long in the property industry that it might sound like a platitude.
But what exactly does this mean?
"Location refers to a number of factors that buyers should take into account before deciding which property to buy," explains Adrian Goslett, CEO of RE/MAX of Southern Africa.
"These factors are crucial, because they affect the growth in the value of the property over time, which will determine the price that can be achieved if the property is sold in the future, as well as the income the property can generate if it is bought for investment purposes."