Why it’s important to check your estate agent’s credentials
Similarly to how one might expect a doctor to display his or her degree on the wall of their office, professional real estate agents should be more than willing to provide evidence of their credentials when doing business with you. If not, you might be dealing with a non-registered estate agent.
“Did you know that if your agent doesn’t have a valid Fidelity Fund Certificate (FFC), you don’t have to pay them commission for selling your home? If an agent fails to produce an FFC that is still valid at the time when the commission is due, sellers can legally deny payment of the agent’s commission,” explains Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett.
If this happens at Budget 2019, SA’s luxury home sales will go up
Ahead of State of the National Address (SONA) and Budget 2019, Samuel Seeff, chairman of the Seeff Property Group, has called on Finance Minister, Tito Mboweni, to relook transfer duty, especially at the top end of the market, as well as Capital Gains Tax (CGT).
While government had intended to boost its tax income from wealthy buyers with the introduction of these, it has actually had the opposite and stifling effect on the upper end of the market. The property sector is overtaxed, says Seeff. You’ve got transfer duty, agent’s fees, lawyers and CGT. In some instances the transaction costs can run as high as 20% of the purchase price, but add no value to your investment.
Budget for these 5 unexpected costs when selling property
As counter-intuitive as it might be, selling a property can be quite an expensive exercise. While some of these expenses can be offset against the final sale price, others will need to be settled before the sale can go ahead.
“Apart from the agent’s commission, sellers are sometimes caught off guard by the various costs involved in selling a property. To protect against being left with less than what had been budgeted for, sellers should speak to their real estate professional and work out how much these expenses will add up to before they go ahead with the marketing of their home,” says Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett.
To give sellers a better idea of what they might be in for, RE/MAX of Southern Africa shares the five main expenses that are involved in the sale of most properties:
South Africans with lowest credit scores spend the most on rent
Nearly two out of every five tenants in South Africa are “risky” with, on average, 14.2% of tenants classified as ‘minimum-risk’ based on their credit scores, while 37.2% are ‘high-risk’.
PayProp head of data and analytics, Johette Smuts, says that according to the PayProp Rental Index from Q3 2018, this high-risk contingent of tenants spend about 33% of their net income on rent. Smuts says that there is a widely accepted unwritten rule that a tenant shouldn’t pay more than 30% of their net income for rent.
“While PayProp data shows that the average percentage of rent paid by tenants in the third quarter of 2018 was indeed 30%, we also see a correlation between a tenant’s risk level, determined by their credit score, and the percentage of net income that they spend on their rent,” she explains.