Comparison of Global Property Value for Money

Most of us that live in South Africa that are earning Rands are not aware that property in South Africa offers great value for money when comparing on a global scale.

There is, according to various reports, an increase in the number of expats who have decided to return to live in South Africa. It appears that the grass isn’t necessarily greener on the other side and those who are returning have cited several reasons behind their decision. However, it seems that family ties, the weather and the simple fact that this is ‘home’ are the main reasons that so many expats are returning.

Quite frankly those who are returning now couldn’t have picked a better time. The rand is continually on a downward curve and anyone bringing pounds or dollars into the country stands to score. This obviously means that those investing in property will get far more than they originally bargained, given the rapid onset of the decline in our currency.

The average selling price for property in London is around the £5r0 000 mark. In Rand this translates to around R10-million. Property and the cost of general living do become a little more affordable if you buy a property outside of the UK’s capital. More recent stats indicate that the average price paid for a home in the rest of the UK is £274 000 (roughly R5.8-million).

Spending £500 000 may not seem that big a deal to those in the money, however, it’s worth remembering that this figure is the amount buyers could expect to pay for a studio apartment or a two bedroom maisonette that in this instance features a lounge measuring 4.11m by 5.11m and a master bedroom measuring 2.64m by 2.49m.

It also does not appear to be any easier for buyers hoping to invest in a property in New York. In January this year it was estimated that the average price of an apartment in Manhattan was around $916 000 (around R12.5-million).

The picture also doesn’t look much better in Sydney in Australia or Auckland in New Zealand where the average price of property is approximately AU$760 000 (R7.3-million) and NZ$670 000 (approximately R5.8-million) respectively. A quick Internet search reveals that a one-bedroom apartment measuring a paltry 61m2 in Sydney is currently on the market for AU$745 000.

So, what will R10-million buy you in this country? In Cape Town there’s a three-bedroom property in Camps Bay with unobstructed views of both the mountains and sea that is currently on the market for R9.995-million.

For those looking at property in Umhlanga, Durban there’s a magnificent 470m2 four-bedroom property selling for R9.980-million and for those looking to settle in Gauteng there’s a property measuring 600m2 which features five bedrooms and four bathrooms selling for R9.850-million in Bryanston.

Although those of us living here and earning Rands may not believe it, South African property really does offer excellent value for money. For starters our homes tend to be bigger than the average home in any of the world’s cosmopolitan cities.

The South African properties are also situated on bigger stands and high-end homes generally feature sophisticated security systems and amenities such as swimming pools. South Africa also has great weather. Don’t get us wrong, we love the vibe of London, New York and Paris, but living through a winter in any of those locations can be a bit of a drag and while very few would leave a country because the weather is bad, it’s surprising how depressing this seemingly inconsequential factor can be and how good it feels to come back to a country where the sun shines for most of the year.

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3 Common Home Buying Mistakes A Good Attorney Will Help You Avoid

Purchasing a home requires you to go through several steps and processes. Buyers sometimes glaze over various, steps because they are unfamiliar with what to do. One of the most important steps in buying a house has to do with all the legalities. Signing the wrong paper or overlooking red flags can turn your buying experience into a nightmare. As a result, it is important to enlist the help of an attorney during your house buying process in order to avoid common mistakes.

Signing Incomplete Estate Agents Agreements

Estate Agents often use the same standard form for each buyer and home. This often results in brokerage agreements that are incomplete, because the condition of each home is different. A standard agreement may not be detailed enough to deal with the problems that are found in your home. New home buyers frequently sign these incomplete agreements and are left with several legal problems. As a result, a good attorney will help you to look over and edit these agreements in order to develop an agreement that suits your needs.

Signing Standard Purchase Agreements

A purchase agreement is designed to give the buyer more insight into the condition of the home. It also helps to clarify what party is responsible for what depending on the scenario. A standard purchasing agreement will not protect you from various scenarios, including what happens if you find out the home is surrounded by hazardous waste. A lawyer will be able to help you edit and amend the purchase agreement. The amended agreement should protect you in the case that the home is not in the condition it was advertised as.

Purchasing a home is meant to be an exciting time in your life, however, it is also a time in which buyers are easily taken advantage. This has a lot to do with not knowing what to look for and how the process works. Therefore, hire a property attorney.

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10 Tips on how to choose the best estate agent to sell your house

Tips on how to choose the best estate agent to sell your house

  1. Ask other people who have used that estate to sell their house

It sounds obvious but recommendations from impartial people who have sold through an agent before are invaluable!

  1. Think about what’s most important to you about selling your house

Is it the time taken to sell your house? The amount it sells for? The fees the agent charges? If a quick sale is your priority, be sure to ask impartial people who have used that agent about their efficiency throughout the selling process.

  1. Find an estate agent who has a proven track record for selling YOUR type of property

Certain agents may be great at selling detached ten-bedroom properties over R5 million but not as proficient at selling your one bed apartment for R700 000 for example.

  1. Think like a property buyer

Buyers often scour the areas they want to buy so do the same, walk around your local area and see which for sale signs say “SOLD” on them. The agents with the “SOLD” signs are the ones to contact first.

  1. Compare estate agents and don’t be afraid to “shop around”

Selling your home is one of the most stressful activities you will do in your life so don’t make it more stressful by rushing into using the wrong agent.

  1. Check the contract before instructing an estate agent

Read the contract small print carefully, as you could find yourself signed up and legally bound for a long period of time. If this is the case, even in the event of poor service, you will not be able to go elsewhere (unless you’re prepared to fork out for two fees!) Insist on a time period of your choice.

  1. Don’t just sell your house through the estate agent you’re buying from

Just because you have found your next dream home through one agent doesn’t mean they’re also the most suitable to sell your existing property.

  1. Consider instructing multiple agents to sell your house

To create a bit of “friendly competition” amongst the selling agents. If you decide to use multiple agents, check the small print on their contracts. They may insist on ‘sole agency’, which means that even if you sell your home privately or through another agent, you’ll still be charged a commission fee.

  1. Check their credentials

Is the agent you are about to choose to sell your house a member of an accredited body? Organisations such as these ensure that estate agents adhere to strict codes of conduct, giving you peace of mind that they’re not cowboys.

  1. Ask where they will be advertising your property

Nowadays it isn’t enough just to have a swanky high street location, estate agents need to advertise on some of the many online property portals.

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Selling or Buying a property privately in South Africa

There is no mystery to selling your home on your own. Just do the right things and your home will sell!

Why Sell Your Home Privately

  1. Take more money to the bank!

The average home price in South Africa is now approximately R1 000 000. The average commission paid to sell a home through an estate agent is 7% + VAT = R80 500. You can save almost Eighty Thousand Rands (R80 000) by selling your home on your own using the No Agent marketing system.

  1. You know your home best.

Most estate agents do not properly describe the fine details of your home to a potential buyer. Many of them are only seeing your home for the first time when they bring a client. You are the most knowledgeable person to properly describe all the features and benefits, to ultimately sell your home.

  1. You are in complete control.

Viewings scheduled at your own convenience. No obligations to agents for a 3, 6, or 12-month contract. Negotiate with prospective buyers directly with no pressure from real estate agents.

  1. You can do it!

The real question is not “can you do it” but can you do it quickly and easily. Just sign up with No agent and you will get a complete package with everything you need to sell your home privately with easy step-by-step instructions to guide you every step of the way. It’s that simple!

  1. It’s Easy to do.

You do not need a n estate agents license, nor do you have to be an attorney or an accountant to sell your own home. What you do need is to do some of the work and be open to seeking expert guidance in areas where you don’t have expertise. Let No Agent give you the proper exposure and tools you need to sell your home privately, all at a price you can afford!

Buying a home privately can save you money, is convenient, and easy to do!

Why Buy Your Home Privately

  1. Save Money!

Sellers often inflate their prices to cover the cost of commissions to estate agents. These costs are passed on to you in the form of a higher price. Without the middleman you have more room to negotiate.

  1. Convenience!

Search for homes at your own leisure and schedule viewings online or by calling No Agent Private Sale. We book the appointments for you!

  1. Learn more about a potential home!

Learn about a home from someone who lives there rather than from an estate agent who may have never even seen the home before.

  1. It’s Easy to do.

Don’t let estate agents tell you that it is complicated. The fact is, that once you negotiate the deal, a property lawyer handles the most complicated part of the transaction. You or the buyer still pay a lawyer the costs associated with the sale, even if you are using an estate agent.

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Freeholding vs. Sectional Title Ownership – Jargon Explained

In this blog post I will be demystifying the difference between sectional title ownership and freeholding. In South Africa these are two popular forms of home ownership and they have different meanings that must be understood before one buys property.

Consider buying a townhouse in a complex of some sort. A freeholding would entitle you to the lands defined by the contract and the home upon that land. Your house would have it’s own ERF number and you would be responsible for paying all of the rates and taxes associated with this property. Now, with a freeholding there is no Body Corporate for the management of the estate, thus fees for membership of the estate are not levied. However, a Home Owner’s Association is generally set up to deal with care of the roads and communal areas within the estate. Thus, a small fee is usually paid by the members of the Home Owners Association for this service.

On the other side of the coin, sectional title ownership entitles you to the home upon the land, however that land is not your possession. The Body Corporate of the estate in which the sectional title home is a member establishes strict rules for the appearance of the home and maintenance. The fees are paid to the Body Corporate and these costs are based upon factors such as the size of the home relative to the total area of the estate. The only fees the sectional title holder is responsible for are the rates and electricity costs. Finally, if a home wants to be altered or renovated, it must cleared by the Body Corporate.

So, these considerations are important when deciding whether the home you wish to buy is suitable for all of your requirements. Good luck making your choice!

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7 Questions to test the Loyalty of an Estate Agent

Buying or selling a property or home will be difficult when dealing with an incompetent or disloyal Estate Agent.

Please don’t think that this article is about being negative about estate agents.

I am of the overall opinion that many estate agents are excellent, however, most estate agents fall into one of three categories: good, average or poor.

Then, there is that worrying small percentage of estate agents who are downright incompetent. Every industry is inflicted with this type of person and I suspect the real estate industry has more than its fair share of incompetent agents.

The truth is; a good and a bad Estate Agent have the same one thing in common – their job is to be a “deal-maker.” However, you need to be warned – some estate agents will perform any type of tricks to get a deal. There is certainly nothing wrong with enthusiasm to pull a deal together – it is to be applauded. However, a good Estate Agent always needs to remain professional and ethical throughout the property selling process.

The majority of homeowner’s are inexperienced when it comes to buying or selling a property. They therefore rely on the “perceived” ability of the estate agent they are dealing with in the selling process. Most homeowners are an easy target for a dishonest or incompetent estate agent.

In any negotiation, a WIN – WIN deal is the ideal goal. Unfortunately, sometimes when buying or selling a property, the result happens to benefit just one party…the buyer, the seller or possibly just the estate agent. So therein lies the danger. Who is the estate agent really working for? Where do their true loyalties lie? With the seller, the buyer or themselves?

These 7 questions will help you decide who the estate agent is really working for. Upon viewing any home use these questions to test the estate agent.

The answers will normally reveal something about the estate agent and their ability and true loyalties. If the agent betrays the seller, the chances are that they will betray you as the buyer as well. Conversely, If the agent defends the seller, it’s likely they will defend you too.

Here are the questions to ask:

  1. Ask the Estate Agent: What price will the seller accept?

You could learn the lowest price that the seller will accept.

  1. Ask the Estate Agent: How much do you think the home will sell for?

You could find out that the Estate Agent has an opinion less than the asking price.

  1. Ask the Estate Agent: When does the seller need to move out?

The Estate Agent may then reveal an urgent deadline. This will be an advantage to you the buyer in negotiating a lower price.

  1. Ask the Estate Agent: Why is the homeowner selling?

The Estate Agent could possibly reveal a confidential reason for selling.

  1. Ask the Estate Agent: How long has the property been on the market?

The Estate Agent may reveal if the property has been difficult to sell or perhaps why.

  1. Ask the Estate Agent: Who priced the property?

The Estate Agent may deny any involvement and could blame the seller for being greedy.

  1. Ask the Estate Agent: What other homes are there in competition to this property?

This is particularly useful information, if the Estate Agent gives you an honest answer. You can then ask the Estate Agent to show you some of these competing properties.

These questions are basic and not difficult to ask. However, if you don’t ask these types of questions you can place a buyer or seller in the hands of a dishonest and incompetent Estate Agent.

Purchasing a property is a significant investment for anyone; so, it is advantageous to choose an Estate Agent you can trust and have confidence in.

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Tips for home sellers

It’s a buyers market at the moment, so if you’re looking to sell your home for a decent price, you’ll need to put in the effort to make your home stand out from the crowd. How do you do this? Here are a few tips:

First impressions mean everything, and this starts from the moment a potential buyer turns into your street. Take a good look at your home from across the street. What do you notice? If the paint is peeling, the garden is unkempt and the lawn needs moving, a buyer sees a low-value home. Cleaning up the exterior of your home and a little extra time spent landscaping can give a desirable first impression.

Wander around your home as though you were looking to buy it. What would stand out to you as the positives and negatives about your property? Once you identify these areas, you can emphasize the positives and disguise the negatives.

Clean the interior and leave benches and tables free of clutter. Your buyer needs to be able to envisage their furniture in the space.

If something obviously needs repairing, then repair it. Buyers always inflate the cost of repairs in their head, and will want more off the price of the house than you will pay to have the repairs done.

When buyers come around, neither you nor your pets should be present. If you hover, buyers feel awkward, as they’re in your home, so they won’t stay as long. If your pets ran around, you risk turning off buyers who are afraid or allergic to your pets.

If possible, leave the garage empty. This creates an illusion of additional space.

Don’t apologize. Never say “I’m sorry, this space is quite small” or “I’m sorry, we couldn’t fit a double wardrobe in here.” Be positive about your home – it will be perfect for somebody at the right price.

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Things to consider when buying a new home

You’ve brought your land and now you’re ready to start building … or are you? With any new building project it’s important your design fits with the scale and shape of the land. This minimizes problems in years to come and ensures you end up with the best looking house on the street.

The first thing you need to consider is the impact of your potential home on your site. Earthworks are expensive, and shifting earth and clearing vegetation add to the risk of erosion, ground instability and landslides. Position your house on site to minimize earthworks.

A smaller home will have less impact than a larger one. Remember, you pay around R20 000oo per square metre of home, so make sure you need all that extra space. A smaller house will also cost you less to maintain over its lifetime. A large house on a small section can look out-of-place and affect the value of the home.

Remember too, that the more buildings, structures and hard, paved surfaces cover your site, the more risk you have of runoff. To reduce runoff, keep your building’s footprint (the area of building on the ground) compact and use paths made of stepping stones, gravel, timber and shells instead of paving.

Sloping sites are the most difficult to build on, as often significant amounts of earthworks need to occur to create an area suitable for a house. A multi-level home on piles will reduce the amount of earthworks needed, while also helping you to maximize views over the landscape.

Before designing your new home or renovation, it’s important to carefully assess your site and make good use of the natural features you already have. Earthworks and vegetation clearing will cost you money and could end up being harmful to the environment and to your new home.

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Poor Property Management

When Property Management Kills a Sale

Many things can dampen the deal when you wish to sell your home, but the most damage can come from a poorly managed Homeowners Association. Ensuring that you keep a good relationship and up-to-date finances with your estate’s management team can go a long way when it’s time to sell.

Selling or buying within an HOA (Homeowners Association) is slightly more demanding due to the extra paperwork required and the obligation for HOA clearance certificates to be issued.

The HOA docs alone can cause steam to flow from your ears: CC&Rs (Covenants, Codes & Restrictions), the budget, meeting minutes and all the rest of the documents that make up the huge stack supplied by the HOA. Getting any prospective buyer to read and understand these documents is potentially even more challenging.

Below are more ways on how HOAs can lose you a sale, just to help you know what not to do and what to look out for when selling within an HOA.

4 Ways Poor Property Management Can jeopardise a Sale:

  • Lousy Liens

A lien is a right to retain physical control over another’s property as a means of securing payment of a claim until the claim has been satisfied. The lien holder obtains rights of possession over property, but only so far as to provide the holder with security for a claim.

Cause for a lien can arise when homeowners refuse to pay outstanding levies, legal fees and other debts to the HOA; it’s a drastic attempt to prevent quick sale and transfer of a property. If your HOA has the right and applies for a lien to be attached to your property, it creates a hefty cloud on the title deed that will repel all lenders (and buyers) until the lien has been cleared and a Clearance Certificate can be provided.

Lengthy Lawsuits

You never know what lies beneath the surface, which is sometimes the case when you try to buy or sell within an HOA with a couple of court cases in the closet. Normally legal problems arise from lenders who see construction defects that violate local building regulations, bringing the entire transaction to a stop until the defects have been amended.

  • Loan Limits

If current members within the HOA refuse to pay levies or other outstanding debts, then not only will basic maintenance services come to a halt, but the entire HOA will be declared bankrupt, putting a big red stain on the entire estate. No lender will approve a home loan for a property within a bankrupt or deeply indebted HOA. It would be like buying a broken car…idiotic.

  • Loathed Bylaws

Often an HOA can cost you a sale in the simplest way; by enforcing ridiculous rules and guidelines. Even if the current members of the HOA have agreed to these strict rules, that doesn’t mean that the next potential buyer may be so keen to follow them.

Over-strict HOAs with merciless penalty fees will ensure that your potential buyers are easily repelled from the deal. However, remember to explain to your buyers that the strict rules are what keep the property values high and inform them if the HOA is friendly and open to discussing or altering the rules (as this may win you some points).

It is advised to always keep a strict eye on your finances, ensure that all your bills are paid, and consult specialist legal and realty advice when selling (or buying) a property within a Homeowners Association. Many homeowners forget that HOAs need levies to continue the spectacular upkeep and growth in property values, but often HOAs can act unfair and biased when imposing demands and penalty fees on homeowners for small or unreasonable infractions.

Realising and weighing the pros and cons of investing within an HOA, understanding how the estate’s management works and what rules would need to be followed, will help you to play safe when buying and selling within HOAs.

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