8 property defects to look out for
It’s easy to get excited when viewing a property and forget to look more closely at common defects that might not be obvious at first sight.
Whether it is a first-time buyer purchasing their first home or a property investor looking to purchase an additional investment to add to their portfolio, buying property is a big investment, says Adrian Goslett, CEO of RE/MAX of Southern Africa.
Therefore, he says, it is important for buyers to be able to look past the aesthetic appeal of a home at the integrity of the components that make up the property to ensure that the purchase won’t end up costing more in the long run.
With the introduction of the Consumer Protection Act many buyers are requesting a list of defects from the seller, however, there are a few things to look out for when viewing a property, says Goslett.
1. Rotten wood
Goslett says that in certain areas in the home that are exposed to moisture, such as the kitchen and bathroom, wooden components may have begun to rot over time and should be checked. These elements must be treated and protected with a paint or finish that is specifically designed for this purpose. Exterior features such as decks or trims that are made from wood should also be checked as these will be exposed to the elements.
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Use net to maximise chance of selling
If your agent does not advertise your home widely on the internet, you are quite simply losing out on the best chance you have of selling it.
According to Berry Everitt, managing director of the Chas Everitt International property group this was confirmed in the latest statistics released by the US National Association of Realtors (NAR) following its 2011 survey of more than 80 000 homebuyers.
The results showed that while prospective homebuyers used multiple sources of information in their search for a property, far and away the most used sources were the internet (88 percent) and estate agents (87 percent).
The majority of home seekers (35 percent) used the internet as a first step in the search process, visiting property portals more than individual real estate company websites, he says.
“Only 21 percent contacted an estate agent first while 8 percent began by driving around their preferred areas looking for homes for sale.”
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Top décor trends for 2012
From raw natural materials to mesmerising murals and tantalising textures – 2012’s décor forecast is full of exciting inspirations that will no doubt provide homeowners with an array of interesting options to give their homes a fresh new look.
Focus on furniture
Today’s furniture coverings are moving away from prints – instead plainly coloured coverings that are highly textured are increasingly popular.
The actual design lines of the furniture is also becoming more streamlined.
For example, yesterday’s bulky sofas are giving way to smaller styles with lower backs and sleeker looks, preferring to cluster them into conversation groups for added flexibility. All things natural remains a popular focus, but instead of the dark Mahogany and espresso-coloured woods, lighter and mid-tone woods are fast gaining popularity, such as natural Walnut, Cherry and White Oak being especially dominant.
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Options for buying retirement property
When it comes to retirement, perhaps one of the most important decisions that investors will have to make aside from the type of retirement property they buy, will be the type of sale transaction they choose when purchasing that property, says Adrian Goslett, CEO of RE/MAX of Southern Africa.
“South African investors have a large number of options available to them in terms of retirement communities and villages that they can buy in to, ranging from unassuming entry-level properties to luxurious homes.”
There are also different options that investors have as to how they choose to purchase those properties, and when it comes to buying into a retirement scheme, the legality of ownership can be a significant factor, says Goslett.
The three options that investors have available to them for buying retirement property are:
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The state of Pretoria CBD buildings
The development strength and potential growth of the Pretoria CBD property market in Tshwane, Gauteng are not being fully capitalised.
According to Jan Oelofse, leasing and broker for JHI Properties, this strategic location, the capital of South Africa faces the threat of urban decay.
“Of concern is how long the city’s aging buildings will still meet the requirements of government?”
Oelofse feels that while numerous symptoms are cited as reasons for this state of affairs, the crux of the problem is not being addressed.
He explains that the only new developments of note which have taken place in the CBD over the past 20 years are the new National Library building and the basic education department building as well as the revamp of the central government offices in Church Street.
The old Home Affairs and South African Agricultural Union buildings and central government offices at the corner of Church and Bosman streets have been significantly upgraded.
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Office vacancies could increase
In the past two years the rate of increase for national office vacancies has been relatively modest and vacancies could still remain under pressure.
According to the South African Property Owners Association (Sapoa) and Investment Property Data Bank (IPD) Office Vacancy Survey Q4 2011, across the 49 commercial nodes surveyed, the South African national office vacancy rate continues to increase.
Over the past year the vacancy growth trend has been modest and in Q4 2011 it increased by a further 13 basis points on Q3 2011 reaching a new two-year cycle high of 10.4 percent.
Across the country, prime space (P and A Grade offices) is performing better than lower grade stock.
The the A grade vacancy rate is 8.5 percent and P grade is currently at 2.0 percent.
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How to address levy non-payment
It is surprising, but true, that there are many sectional title property owners who still do not appreciate exactly why monthly levy collection is essential, says Michael Bauer, General Manager of the property management company IHFM.
The simple truth, which the owner of every freestanding property knows, is that on any property there will be maintenance and operating expenses, he says. “In a sectional title scheme it is perfectly logical that if your unit comprises say 5% or 10% of the entire floor space, you should pay 5% or 10% of the running costs - but on certain schemes there will always be a small handful of owners who cannot or will not acknowledge this.”
When an owner falls behind on his levy payments, says Bauer, the other members will probably have to carry his share until the arrears are recovered - but he continues to enjoy all the benefits that the sectional title scheme offers.
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Brief guide to buying repo property
Investing in repossessed properties, which in South Africa are known as PIPs (properties in possession), has become one way to make money in the current economy.
This is because of a near-historic rate of foreclosures across the nation which has resulted in depressed prices being reflected in the residential property market.
However, Rael Levitt, CEO of Auction Alliance says that while there are bargains out there and buyers are often getting houses at below replacement value they should be sure to do their homework properly before bidding.
A brief look at PIP
The term PIP is used in the industry to denote homes that are possessed by the bank which owns the bond for the property.
When a homeowner goes through a sale in execution through the courts, the bank may protect its outstanding bond and thus bid and buy the property into its possession at the no reserve judicial auction. Once it owns the property it will attempt to unload the property at, or near its assessed value.
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Tenant buys, can rental agent claim?
A question that sometimes pops up is ‘can rental agents claim commission for a property sold if the tenant chooses to buy the property?’
Bill Rawson, chairman of Rawson Properties, says often a tenant living in a property will grow so attached to it that he will offer to buy it or the owner might decide to sell the property, giving the tenant the first option. Also, if an owner dies, the heirs decide to sell and allow the tenant first option.
However, Rawson says there have recently been occasional cases where, on the sale taking place, the rental agent has claimed full commission on the sale.
Such claims, he says, are based on a clause inserted into the rental agreement which states unequivocally that, in the event of the tenant buying the property, the rental agent will be seen as having played the role of sales agent.
He says this clause remains effective even if the agent played no part in the sale process i.e. if the tenant dealt directly with the owner.
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