Do you want to own property? Read this
Whether you believe that now is a good time to buy property to live in or as an investment asset, consumers need to be financially fit to do so.
According to Linda Rall, KwaZulu-Natal provincial manager at ooba, although now is a buyer’s market, many consumers cannot afford to purchase homes because they are not financially fit.
Rall says when applying for a home loan, consumers need to prepare adequately and be in the best possible financial condition before entering the property market.
Potential home owners should evaluate their financial ‘fitness’ before shopping around for a home to ensure that they are aware of what the property buying process entails and if they can afford the many costs involved, she says.
It is important to consider prequalification as a way to evaluating one’s financial status.
By doing this, applicants’ credit profiles and affordability are checked upfront to ensure they qualify for a loan.
Prequalification will also give buyers a clear idea of their budget range, which allows them to house hunt accordingly, she explains.
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Can BC force me to evict tenants?
A Property24 reader asks:
I have tenants and they have been with me for a long time now – always on time with rent and the place is in superb condition.
The tenants and the Chairman of the Body Corporate are in constant dispute – it has now gone so far that I have received a letter from the Body Corporate lawyers that I need to give them notice – they must be out by the end of March – if they do not hear from me they will take the matter to High Court for an eviction order.
I am not sure what my rights are? I do not want to give them notice as they are the best tenants one can get – I am still waiting for the lawyer I have contacted. We had an arrangement that they would first notify us but they simply ignored it and went straight to the lawyer.
Any advice would be appreciated?
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Where to buy cheap property in SA?
The February oobarometer price index reveals that the average house price rose to R868 174 from R832 105 a year earlier, while month-on-month property prices increased by 2.1 percent.
The average purchase price among first-time buyers grew by 10.7 percent to R663 092, from R599 105 a year earlier, according to the report.
Saul Geffen, chief executive officer of ooba says this growth is driven partly by the relaxation in deposit requirements enabling first-time buyers to enter the property market.
The average approved bond size increased 10.9 percent to R738 835 from R666 124 a year ago, while the average deposit decreased by 25.1 percent to R129 339, down from R165 981 a year earlier.
The average deposit is now equivalent to 14.9 percent of the purchase price, says ooba.
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Agents - independents or employees?
Agency principals should be more concerned about the misconception in the industry regarding the working relationship between themselves and agents.
According to Linda Erasmus, chief executive officer of Fine & Country International Realty South Africa, many estate agents still argue that they are independent contractors and not “employed” by the agency.
The real concern is the fact that so many principals operating real estate agencies agree.
Erasmus says in the first instance, one has to look at the definition of the employment contract as described in the Labour Relations Act.
The contract of employment is a voluntary agreement between two parties, in terms of which one party (the employee) places his or her labour potential at the disposal of the other party (the employer) in exchange for some form of remuneration.
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Foreigners battle to obtain home loans
Foreign would-be property buyers with high level qualifications and skills are battling to obtain South African residency permits and home loans.
According to Rob Lawrence, national manager of the bond origination service, Rawson Finance, foreign national bond applications are assessed under three categories:
- Temporary residency permits, which include the applicant’s work permits, the permit for the spouse and other documentation.
- Permanent residency permits, which are in most cases issued to foreign nationals who have been in South Africa with temporary permits for at least five years.
Holders of this permit can apply for a South African identity document, which will show that they are non-South African citizens.
This document confers on them the same rights to mortgage loans as apply to bona fide South Africans – which means that such people are not restricted, as are most foreigners to a 50 percent loan.
- South African citizenship. If and when a foreign national who has qualified for permanent residency renounces his previous citizenship, he can attain South African citizenship.
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You too can become an estate agent
The New Year is an exciting time for university or college graduates and the prospect of good rewards in store for all those years of studying.
One has to look at the big employment websites to appreciate that South Africa has a wealth of opportunities for bright young people with all sorts of interests, talents and qualifications, says Berry Everitt, managing director of the Chas Everitt International property group.
Major retail, motor and mining organisations, banks and accounting firms, IT companies, travel and tourism companies, engineering and legal firms and even recruitment companies themselves are all looking for qualified employees and graduate interns.
Everitt says the real estate industry is no different in being urgently in need of new recruits.
“Being an estate agent is different, however, from many corporate jobs in a number of exciting ways.”
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Are you battling to pay your mortgage?
With inflation creeping over the 6 percent mark, basic living costs escalating, interest rate hikes on the cards, homeowners face a tough future.
According to Stuart Manning, Seeff Properties executive officer, while the objective is always to keep owners in their homes, the economic reality is unfortunately such that around one third of the country’s homeowners are still under severe financial pressure.
The volume of urgent-sale properties continues to hamper market recovery.
Only once there is a significant clearance of this stock can we expect demand and prices to normalise, he says.
Manning explains that it is therefore critical that as much of this is dealt with as efficiently as possible and while banks’ urgent sale processes are making inroads, two issues have become potent.
Many homeowners are still unaware of the bank rescue packages and more assistance is needed to speed up the clearance process.
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Construction authorities lash Government
Higher Education ministry has said there was little to show for the R37.5bn ploughed into the Sector Education and Training Authorities since 2000.
According to Rob Johnson, executive director of the Master Builders Association of the Western Cape (MBAWC) - a major stakeholder in the affairs of the Construction SETA (CETA) - following the CETA being placed under administration by Higher Education Minister Blade Nzimande, it would appear that the anticipated improvements to facilitate training in the building industry have now gone from bad to worse.
“In trying to contact the regional CETA office, we found that their number was not in use.”
Apparently they have either moved or are in the process of moving their offices.
As the largest stakeholder and biggest entity involved in skills training in the Western Cape we are shocked that we were not advised of this, he says.
The MBAWC have been attempting to address their issues and concerns through the CETA administrator, but these appear to be falling on deaf ears.
These include outstanding monies, the non-existence of Trade Testing facilities for their members’ employees and projects for funding being rejected.
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Agents and the Consumer Protection Act
Estate agents must familiarise themselves with the Consumer Protection Act and have their documents redrafted to avoid getting into trouble.
Gunston Attorneys commercial director, Trudie Broekmann says in terms of the Act, the mandated estate agent supplies services and possibly, goods, to the principal, as well as to the potential purchaser, tenant or even seller, where the agent was mandated to find a property for a purchaser to buy.
The agent is consequently a ‘supplier’ as defined in the act, and in that role, needs to ensure that he or she complies with the many relevant provisions of the act when interacting with buyers, sellers and tenants.
The mandate deals with the relationship between the agent and the principal, and may not contravene the Act.
It can and should also be used to protect the agent against some of the most onerous legal risks in the act, she says.
She explains that the new Act is aimed primarily at protecting individuals and vulnerable consumers.
For this reason it will only apply fully to a transaction where the purchaser is a juristic person (defined to include a company, close corporation, trust, association, partnership and body corporate) which has assets and turnover below R2 million, or an individual or individuals.
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