Peter Gilmour, Chairman of RE/MAX of Southern Africa, gives his perspective on the South African property market during 2012 and his insights for the year ahead
While the real estate market continued to recover during 2012, and both sales volumes and property prices showed a gradual increase, the criteria that South Africa's financial institutions expected people to meet in order to qualify for mortgage loans remained onerous. This resulted in many buyers not being able to obtain the necessary finance to purchase a property, says Peter Gilmour, Chairman of RE/MAX of Southern Africa. "Despite this challenge, 2012 was a solid year for real estate in South Africa."
Gilmour points out that high debt-to-income ratios and a poor savings culture are the major reasons why many South African homebuyers have struggled to obtain finance. "South Africa only has a domestic savings rate of around 20% of GDP, compared to other emerging markets like China which has a domestic savings rate of around 50% of GDP. High debt and poor savings reflect negatively on affordability levels, which has held back the market and slowed down recovery. For this to change in 2013, South African consumers will need to focus on clearing their debt and starting a savings programme to ensure their ability to secure home loan finance in the future," says Gilmour.
Even though the property market held some challenges in the year gone by, Gilmour notes that there were a number of positive events that will have a great impact on the market in the years ahead. He says that a significant move was the change of management of the Estate Agents Affairs Board (EAAB) from the Department of Trade and Industry to the Department of Human Settlements, which is being headed by Tokyo Sexwale. "We have every confidence that this change will have a positive effect on the industry in 2013 and we look forward to new era in the real estate business that is synonymous with good governance and transparency," he says.
Added to this, Gilmour also points to the large numbers of agents who continue to qualify with NQF4 and NQF5 certificates - an effort which he says will result in the continuous increase in the level of professionalism in the industry. "Furthermore, improved procedures by the EAAB will result in mor agents obtaining their certificates to operate in a timely fashion," he says.
So what does RE/MAX of Southern Africa see as the big issues for property in 2013?
"We certainly see another very interesting year ahead," says Gilmour. "The more things change the more they stay the same. Despite all that has changed in recent years and all the technology advances that have assisted real estate professionals, the fundamentals of being successful remain the same."
One of the most important fundamentals in business is relationships. Gilmour says that relationships have always been important, and will continue to remain a vital component of business success in 2013. "For sales professionals, 70% of housing consumers will choose an agent due to some form of personal relationship. While the percentage of homebuyers that find their agent online has increased substantially, technology will never be able to replicate or replace a personal relationship."
Just as relationships form a key element of the property buying and selling process, so leadership is key to a successful real estate business. Gilmour says that good leadership is still paramount to agents and will largely determine which brokerage companies they associate with. "Strong principled leadership will continue to characterise successful companies in the year ahead."
Gilmour is optimistic about property sales and house prices in the year ahead. As investment in businesses and infrastructure increase, there will be a gradual increase in employment which will lead to increased demand for both rental properties and property to buy.
"Home prices are expected to continue their gradual rise in 2013, especially in the high demand areas and price brackets, while interest rates are expected to remain low, therefore presenting buyers who have cash and can qualify for mortgage finance with a great opportunity to invest in a home at a good price."
He adds that due to the limited access to finance, it is expected that the rental market will continue to grow rapidly in the year ahead.
Buying patterns will also start to be more closely linked to the rising cost of living as buyers base their purchasing decisions on living costs more so than ever before. "As prices of petrol, electricity and the like continue to rise, buyers will be looking to buy functionality - closer to schools, work and lifestyle attractions. Buyers will also be looking for other cost-saving mechanisms in the homes they buy, such as solar heating, property insulation and other green and energy saving features."
Gilmour concludes by saying that overall, he expects 2013 to be a year of measured improvement in the real estate market. "While the growth in real estate in the year ahead may not be substantial, it will certainly provide opportunity for buyers, renters, agents and real estate companies to improve their situations and benefit from the relative economic stability that South Africa has to offer.
Friday, 25 January 2013
ANNIVERSARY: RE/MAX EXPANDING IN AFRICA
Real Estate agency RE/MAX
celebrates its 40th anniversary on January 30. RE/MAX
of Southern Africa ranks as the largest real estate franchisor in the
sub-continent. Its chairperson, Peter
Gilmour, said that more than 30 new RE/MAX
franchises opened in the region during 2012.
“This brings the RE/MAX
of Southern Africa network to over 170 offices and 1800 agents.”
The company was established in 1973 in Denver, Colorado,
U.S., by Dave and Gail Liniger. Gilmour
said RE/MAX was recognized as one of
the leading real estate franchise companies with the most productive sales
force in the property industry worldwide.
In South Africa the brand has also enjoyed great success.
PLETT MARKET STARTS TO PERK UP AGAIN
After a tough cycle,
agencies are reporting a slow return to glory for this popular holiday town
Unit sales in Plettenberg Bay are up by about 15 percent,
with more than 300 properties sold during 2012 compared to about 260 in 2011,
says Seeff principal Kevin Engelsman.
“We more than doubled our sales in the past year; selling 88 properties
worth a total of 170 million, compared to 42 units in the previous year. Although most properties sold in the town are
still in the sub-R4m price band, it was encouraging to note that some more
expensive properties were sold, at prices ranging from R15,5m to R23m, mostly
to Joburg holiday home buyers,” said Engelsman.
“Many of the holiday properties sold over the past year were
older home buyers intending renovating.
In particular, homes with sea views or near the beach have attracted
significant interest over the past year.”
There has also been renewed interest in vacant plots and
about 20 percent of all properties sold over the past the past year were vacant
land. The Whale Rock development plots,
which range in size from 1 021m² to 1
600m² and were released at discounted
rates of up to 65 percent towards December, sold out within five weeks. Engelsman says Seeff sold 24 of the available
33 stands at prices that ranged from R162 500 to R330 000. “Following a period of high price expectation
on the part of sellers, serious sellers became more amenable to pricing in line
with market demands last year. We expect
that holiday and investor buyers from Gauteng and other inland provinces will
continue to look for good value this year.
“Consequently, prices will remain flat.
It remains a buyers’ market and, especially in view of the flat economic
growth forecasted for 2013, sellers will need to continue to price
conservatively,” he said.
Cheryl Anley, of
RE/MAX Prime Properties, which operates in the Plettenberg Bay area, says
the demand for leisure property has remained fairly muted. However; now that the property market is well
into the recovery phase, demand for leisure properties has slowly started to
increase.
“Property sales in Plettenberg Bay were quiet for the first
half of last year, but there was an increase in activity in the second
half. Rentals have also been slow during
the year, which is fairly normal, but there was a good demand for the holiday
season.”
Sales and prices took a serious knock over the past three
years. The market is still recovering
and prices are still stabilizing, so it’s not advisable to buy property with
the idea of a quick turnover: However, there has been an increase in sales over
the past six months. We believe we are
close to the bottom of the property cycle and the situation will slowly improve
from here on,” said Anley.
“Plettenberg Bay buyers and renters are mostly families from
Johannesburg, Cape Town and the Free State, although there are some investors
wanting to buy property. Buyers are
looking for homes priced between R1.5m and R2m, and the most popular rental
properties cost between R2500 and R3500 a day during the high season.”
Anley said that secure estates and homes close to the beach
or with sea views were the most sought after, although price was playing a
large role and good buys were becoming more dominant than emotional
purchases. If the price was right,
buyers were prepared to upgrade their homes.
According to Pam Porter, principal for Jawitz Properties,
Plettenberg Bay, it has become easier for first-time buyers to get on to the
Plettenberg Bay property ladder. “Four
years ago, you could not buy a freehold house in Plett for under R1,5m, but now
buyers can pick up homes for as low as R1,2m” she said.
“More and more people are relocating to Plett. It has a great primary school, we are
attracting an increasing number of medical specialists and we’re also
anticipating the re-opening of the airport.
“There are considerably more freehold property than sectional title
sales in the area, and a wide range of properties are available. On any given street you can find a palatial
property neighboring older, smaller homes.
“Properties that are will priced sell well, although some sellers hold
out until they get their desired prices,” she said.
“Properties for sale under R4m, are most in demand, with 66
percent of freestanding property sales in 2012 falling in this price bracket –
almost double the number of buyers for this price range compared to 2011.”
However, 21 percent of freestanding sales were for over R8m,
and Jawitz Properties has been mandated to sell a home in Twin Rivers Estate
between the Bitou and Keurbooms rivers at R9,95m. The 649m²
property had a 32m² boat house and a
206m² patio space.
RECESSION RESHAPING CONSUMERS
The next generation of
home buyers are more savvy than their parents were
THE PAST few
years have been extremely interesting and have irrevocably changed the property
market, according to Adrian Goslett, chief executive of RE/MAX of Southern Africa.
“The housing crisis experienced at the end of 2008 changed the dynamic
of the real estate environment and has affected most people in some way – and
not all the effects have been negative.
“As a result of the recession, the current generation of
home buyers has become increasingly more knowledgeable about home
ownership. This is partly because
property ownership and access to finance requires more preparation and
planning, along with the increased media coverage of property topics that home
buyers have been exposed to over the past six years.
“Younger consumers believe that the recession has made them
more knowledgeable about the property market than their parents were at the
same age. The increased amount of
information about property and easier access to the information through the
internet has led to many consumers doing their homework more thoroughly before
making one of the biggest investments of their lives,” says Goslett.
“Most consumers aged between 18 and 35 still believe that
home ownership is a key indicator of success and are willing to do what it
takes to be able to buy their own homes.
Statistics suggest that 75 percent of consumers in this age group value
home ownership more highly than taking an extravagant holiday or owning an
expensive car.
“Although the stringent lending criteria of financial
institutions have made buying property more challenging now than during the
property boom period, many potential first time buyers are eager to do the
necessary research and save the required deposits, even if this means a change
of lifestyle.”
Adults between the ages of 31 and 45 who are generally well
established in their careers are the most active and driving the real estate
market. However; Goslett says adults
younger than 30 make up a much larger generation and have already made their
presence felt in the market.
Statistically the population in South Africa shows that there were 18.74
million births between 1965 and 1985, and about 28.4 million consumers in the
under-30 group.
Goslett says the larger generation will mean the demand for
property will steadily increase as these young people come of age to buy their
first properties. However, considering
that the average age of a first-time buyer is in the mid-thirties and the
oldest citizens born between 1985 and 2010 are now only 27, it could take some
time before this generation reaches its full economic potential.
“The Great Depression shaped the lives of the Greatest
Generation, while the oil crisis during the 1970s affected the Baby
Boomers. Generation X and Generation Y
are now leading the property market after the largest modern-day housing
recession we have seen. It seems that
every generation has faced certain economic circumstances that have changed
their collective perspective in some way.
Today’s generations believe that the risks, details and rewards of
buying property are integral to their planning for future financial success,”
Goslett says.
Monday, 14 January 2013
EASY STEPS TO A BRIGHTER FUTURE
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So how do consumers save money with living costs on the rise? Here are a few small steps towards cutting costs, reducing debt and maintaining a budget that allows homeowners to save money:
Step 1
Paying less money for unnecessary items is the first step to saving money. Sit down with the members of the family living within the household and make a list of each member's expenses. Work together to see which expenses are absolutely necessary and which ones can be reduced or cut out completely. For example, encourage everyone in the family to unplug appliances when they are not in use, pack lunches for work or school instead of eating out and reduce internet or television packages to the essentials. If two cars are being used in the household, if possible, consider reducing travelling costs by taking one car.
Step 2
Once expenses are identified, divide them into two categories, those that are priority and core expenses and those that are not. Set money aside each month for the expenses that are nonflexible, such as bond repayments or rent, levies, utilities, insurance. Other expenses such as entertainment, food and petrol are the expenses that can be reduced to accommodate for more savings.
Step 3
Keep a record of all money spent. Write down every amount spent in a journal or notepad that can be carried around and then translate all lists kept by family members into one household spreadsheet. This will help you to formulate a visual aid as to where the money is going and how and where to reduce areas of unnecessary spending.
Step 4
Have a day of the week that is set aside for a cash withdrawal and keep it to only once a week. Withdraw enough money to cover all weekly expenses, taking into consideration aspects such as spending money. If the money runs out, do not make another trip to the ATM until the following week. Check balances online to manage the account effectively.
Step 5
Where possible do not rack up further credit card debt, either use cash or a debit card. If there is no money in the account or no cash available, do not buy the item unless it is absolutely essential. Credit cards incur interest and will often lead consumers to spending outside of their set monthly budget.
Cutting costs and adhering to a budget will give homeowners the excess funds they need to put towards savings and create a foundation on which financial freedom is built. Having a nest egg to fall back on in tough economic times will help homeowners to weather any future financial crisis and protect their most valuable asset, their home.
Friday, 11 January 2013
HELLO FROM PLETT, JANUARY 2013
It seems strange to say goodbye to 2012. By all accounts it
has been a "Big" year. Big drama with nationwide strikes, big tragedy with many
people losing their lives in floods in Natal and the Eastern Cape and terrible
carnage on our roads over the Festive Season, big joy, with a significant
increase in the Matric pass rate, and the birth of our youngest RE/MAX Agent –
Alexander Ritchie, son of Agent - Stephen Ritchie…… and even some big sales in
our office to help pay the bills.
Now that the last of the mince pies have been consumed, the
Christmas decorations packed away and New Year resolutions made and already
broken, we have moved into the New Year, hopefully with the appropriate
fanfare, and celebration, ready to tackle all that awaits us, not limping in
unseen, clinging to what was, or could have been. Embrace the new challenges
and victory will be yours!
Our summer visitors have been blessed with the most perfect
weather and warm seas, the ideal combination for enjoying long leisurely days
on our beautiful beaches and sumptuous meals in our many restaurants. The
summer vibe has been fantastic and the visitors and locals alike have been very
patient and well behaved in the queues and shops bursting at the seams, with
people eager to stock up with provisions before the “end of the world” which
came and went without incident on 21st December!
The New Year has brought a new set of holiday makers, eager
to enjoy our beaches, and keen to view property on “the first bad weather day”,
which have been few and far between. From all accounts, this has been our best
Season for several years, and everyone seems a little more confident in the
future, especially as America managed to avoid falling off the Fiscal Cliff!!
RE/MAX CELEBRATES 40 YEARS OF GIVING BACK TO LOCAL COMMUNITIES AROUND THE WORLD
This year marks the 40th anniversary of one of the world’s largest real estate franchises – RE/MAX, the leading global real estate brand. RE/MAX of Southern Africa will commemorate this remarkable achievement on 30th January 201, known by those in the RE/MAX family has Founder’s Day, the day on which the brand was created.
Adrian Goslett, CEO of RE/MAX of Southern Africa, says that RE/MAX offices around the world will mark Founder’s Day with a number of events and celebrations. Over the past 40 years RE/MAX has taken the opportunity to celebrate Founder’s Day by giving back to their local communities in various ways. He says that globally RE/MAX is proud to have raised more than $120 million for Children’s Miracle Network Hospitals, Komen for the Cure, Reach for a Dream and other charities.
“Locally RE/MAX of Southern Africa has donated in excess of R7 million in the past 7 years to charitable causes, and will continue this tradition by launching the first initiative of The RE/MAX Foundation, a non-profit charitable organization that aims to uplift the lives of families and individuals in need,” says Goslett.
Through the RE/MAX Foundation, offices across the RE/MAX of Southern Africa area of operation will be invited to engage with their local communities by collecting both toys and books for a local orphanage, crèche or charity that they nominate. Members of the communities are encouraged to participate by donating the items and dropping them off at their nearest RE/MAX office or with their RE/MAX agent. The toys and books collected will be distributed to the various institutions on Founder’s Day, 30 January 2013.
“This is the first campaign of many that will be administered by The RE/MAX Foundation to continue to build up the communities in which RE/MAX of Southern Africa operates. One of the brand’s mottos is that we don’t just work in a community, we live there to,” says Goslett. “RE/MAX of Southern Africa is therefore committed to uplifting these communities and the people that live there,” he concludes.
Friday, 28 December 2012
WHAT YOU NEED TO KNOW ABOUT ELECTRICAL CERTIFICATES
Since May 2009 it has become compulsory for homeowners to be in possession of a valid Electrical Certificate of Compliance (ECOC). This document verifies that the electrical work and installations that have been completed on a property are up to the regulations required by the South African National Standards and are safe.
Why is an electrical certificate so important for a homeowner? Adrian Goslett, CEO of RE/MAX of Southern Africa, says that aside from the fact that the certificate is proof that the electrical installation is safe, the law requires a homeowner to be in possessions of an ECOC, as do home insurance companies. "If a property incurs any damage as a result of an electrical fault, the insurance company will require the homeowner to provide them with a valid electrical certificate. Failure to produce the document could result in the insurance company repudiating the claim," says Goslett.
Prior to the legislative change during 2009, and ECOC remained valid indefinitely and could be transferred without limitation, unless changes were made to the electrical installations. Essentially this meant that the seller could provide the buyer with same ECOC that was provided to them when they purchased the home, regardless of how long ago that was.
Goslett notes that these days, during the sale process of a property, the conveyancer would need to obtain the original ECOC from the seller before registration takes place. This means that the seller must get a certified electrician to inspect the electrical installations, if the ECOC in the seller's possession is older than two years or if any changes have been made to the electrical installations during this time. The original compliance certificate must eventually be retained by the buyer after it has been presented to the conveyancing attorneys, as legislation requires a property owner to produce a valid certificate of compliance on request to an inspector.
According to Goslett, it is the responsibility of the homeowner to check whether the electrician doing any electrical installation on their property is registered with the relevant authorities and has a wireman's license or is working under the direct supervision of an electrician with a wireman's license. If they do not have the necessary qualifications, they will be unable to provide an electrical compliance certificate on the work that they do. "The homeowner must also request to see the contractor's registration card and accreditation certificate. This is particularly important in light of the fact that electricians do not have to guarantee the electrical system is in working order, but only that it is safe, and the new requirement that a test certificate must accompany the ECOC," says Goslett.
He notes that once the ECOC has been transferred into the name of the new homeowner, any alterations made by the new owner to the electrical installation through renovation of the property, for example, will not be covered under that certificate and a separate certificate will be required to cover the additional installations. Goslett says that alternatively, the entire installation can be checked one the additional work has been complete and an entirely new certificate can be issued covering all the electrical work. "As a rule of thumb it is good maintenance practice to have the property re-inspected for wear and tear every two years, regardless of whether the owner is intending to sell the property or not. This will ensure that the wiring in the home remains safe during the period the homeowner occupies the residence," he says.
In the instance where the property is rented out, Goslett says that the owner is required to possess a valid ECOC for the electrical installation in that property and provide the tenant with a copy for their records. "According to the law, no property may be rented out without the landlord having a valid compliance certificate and rental agents are required to see the ECOC before they can assist with finding a tenant for the property," he concludes.
Why is an electrical certificate so important for a homeowner? Adrian Goslett, CEO of RE/MAX of Southern Africa, says that aside from the fact that the certificate is proof that the electrical installation is safe, the law requires a homeowner to be in possessions of an ECOC, as do home insurance companies. "If a property incurs any damage as a result of an electrical fault, the insurance company will require the homeowner to provide them with a valid electrical certificate. Failure to produce the document could result in the insurance company repudiating the claim," says Goslett.
Prior to the legislative change during 2009, and ECOC remained valid indefinitely and could be transferred without limitation, unless changes were made to the electrical installations. Essentially this meant that the seller could provide the buyer with same ECOC that was provided to them when they purchased the home, regardless of how long ago that was.
Goslett notes that these days, during the sale process of a property, the conveyancer would need to obtain the original ECOC from the seller before registration takes place. This means that the seller must get a certified electrician to inspect the electrical installations, if the ECOC in the seller's possession is older than two years or if any changes have been made to the electrical installations during this time. The original compliance certificate must eventually be retained by the buyer after it has been presented to the conveyancing attorneys, as legislation requires a property owner to produce a valid certificate of compliance on request to an inspector.
According to Goslett, it is the responsibility of the homeowner to check whether the electrician doing any electrical installation on their property is registered with the relevant authorities and has a wireman's license or is working under the direct supervision of an electrician with a wireman's license. If they do not have the necessary qualifications, they will be unable to provide an electrical compliance certificate on the work that they do. "The homeowner must also request to see the contractor's registration card and accreditation certificate. This is particularly important in light of the fact that electricians do not have to guarantee the electrical system is in working order, but only that it is safe, and the new requirement that a test certificate must accompany the ECOC," says Goslett.
He notes that once the ECOC has been transferred into the name of the new homeowner, any alterations made by the new owner to the electrical installation through renovation of the property, for example, will not be covered under that certificate and a separate certificate will be required to cover the additional installations. Goslett says that alternatively, the entire installation can be checked one the additional work has been complete and an entirely new certificate can be issued covering all the electrical work. "As a rule of thumb it is good maintenance practice to have the property re-inspected for wear and tear every two years, regardless of whether the owner is intending to sell the property or not. This will ensure that the wiring in the home remains safe during the period the homeowner occupies the residence," he says.
In the instance where the property is rented out, Goslett says that the owner is required to possess a valid ECOC for the electrical installation in that property and provide the tenant with a copy for their records. "According to the law, no property may be rented out without the landlord having a valid compliance certificate and rental agents are required to see the ECOC before they can assist with finding a tenant for the property," he concludes.
TAKING ADVANTAGE OF THE CURRENT REAL ESTATE MARKET
There is no doubt that today's real estate environment is primed for buyers looking to take advantage of the recovering phase of the market cycle, says Adrian Goslett, CEO of RE/MAX of Southern Africa. The current market has brought about a price correction over the past few years along with low interest rate levels that were last seen four decades ago.
"However," says Goslett, "when it comes to entering the world of real estate investment, it is vital that potential buyers arm themselves with the correct tools to make informed and wise purchase decisions."
There are a number of aspects that property buyers need to keep in mind when they want to make the most of their investment options. Goslett offers some advice and tips for property buyers to consider:
Knowledge is power
It is an age-old adage that we have heard over and over again, and for good reason. If you think education is expensive, try ignorance. Goslett says that the key to any property investment in any market is to do the necessary research and never invest in something that you don't fully understand. He notes that in order to get the most out of a property investment, buyers should look at all aspects such as location, possible additional costs that they could potentially incur if they want to renovate the property and investigate the maintenance costs. He says that essentially, to make the best investment in the current market conditions, buyers need to know the true value of the property. This can be done by comparing the rate per square meter of properties of the same standard in the same area to help pinpoint the best value. Having knowledge will empower an investor to discern between a good buy and a bad one.
Seek advice from professionals
An experienced, reputable real estate agent with working knowledge of an area will be the best person to seek advice from regarding purchasing property in the suburb. Estate agents have a wealth of knowledge regarding the market along with access to a variety of statistics and property tools that enable them to correctly determine fair market value.
Use technology
Rapid advancement in technology has meant that vast masses of information are readily available at the click of a button. Goslett says that the internet can be a remarkable tool for property buyers to search for the property in various areas without having to leave the comfort of their own home or office. There is a large amount of information on almost every town or city online, which includes types of properties and pricing. Using the internet and property search portals will save the buyer precious amounts of time and money.
Only consider the facts
It is important for buyers to disregard the other, intangible factors and only base their decision on the facts. Goslett says that buyers will need to base their choices on figures that they know, rather than feelings they may have regarding a certain investment. He notes that not everyone sees things in the same way. "While it might be important for you to have a view, there is no guarantee that prospective buyers will value it as highly as you do when you resell the house," he says.
Focus on motivated sellers
Property buyers should ask sellers their reason for selling the property, as this will give the buyer an indication as to how eager the seller is to move. If the seller is relocating and has put down an offer on another property, they will be more likely to negotiate on the asking price.
Work with people you trust
A house is an expensive investment with great potential for building wealth if undertaken correctly, so getting the truth now can save you a lot of money in the future. Goslett says that this is why it is important for property buyers to work with people that they can trust.
"It is important to remember that property investments are cyclical, which means they will go through both highs and lows. It is for this reason that property should be viewed as a long term investment with property buyers only looking to see the true value of their investment after a period of five years at least," concludes Goslett.
"However," says Goslett, "when it comes to entering the world of real estate investment, it is vital that potential buyers arm themselves with the correct tools to make informed and wise purchase decisions."
There are a number of aspects that property buyers need to keep in mind when they want to make the most of their investment options. Goslett offers some advice and tips for property buyers to consider:
Knowledge is power
It is an age-old adage that we have heard over and over again, and for good reason. If you think education is expensive, try ignorance. Goslett says that the key to any property investment in any market is to do the necessary research and never invest in something that you don't fully understand. He notes that in order to get the most out of a property investment, buyers should look at all aspects such as location, possible additional costs that they could potentially incur if they want to renovate the property and investigate the maintenance costs. He says that essentially, to make the best investment in the current market conditions, buyers need to know the true value of the property. This can be done by comparing the rate per square meter of properties of the same standard in the same area to help pinpoint the best value. Having knowledge will empower an investor to discern between a good buy and a bad one.
Seek advice from professionals
An experienced, reputable real estate agent with working knowledge of an area will be the best person to seek advice from regarding purchasing property in the suburb. Estate agents have a wealth of knowledge regarding the market along with access to a variety of statistics and property tools that enable them to correctly determine fair market value.
Use technology
Rapid advancement in technology has meant that vast masses of information are readily available at the click of a button. Goslett says that the internet can be a remarkable tool for property buyers to search for the property in various areas without having to leave the comfort of their own home or office. There is a large amount of information on almost every town or city online, which includes types of properties and pricing. Using the internet and property search portals will save the buyer precious amounts of time and money.
Only consider the facts
It is important for buyers to disregard the other, intangible factors and only base their decision on the facts. Goslett says that buyers will need to base their choices on figures that they know, rather than feelings they may have regarding a certain investment. He notes that not everyone sees things in the same way. "While it might be important for you to have a view, there is no guarantee that prospective buyers will value it as highly as you do when you resell the house," he says.
Focus on motivated sellers
Property buyers should ask sellers their reason for selling the property, as this will give the buyer an indication as to how eager the seller is to move. If the seller is relocating and has put down an offer on another property, they will be more likely to negotiate on the asking price.
Work with people you trust
A house is an expensive investment with great potential for building wealth if undertaken correctly, so getting the truth now can save you a lot of money in the future. Goslett says that this is why it is important for property buyers to work with people that they can trust.
"It is important to remember that property investments are cyclical, which means they will go through both highs and lows. It is for this reason that property should be viewed as a long term investment with property buyers only looking to see the true value of their investment after a period of five years at least," concludes Goslett.
WHAT KIND OF BUYER WOULD YOUR HOME APPEAL TO?
When it comes to selling property in today's highly competitive real estate market sellers will need to have an edge to stand out from the crowd, says Adrian Goslett, CEO of RE/MAX of Southern Africa. The key, he says, is for sellers and their estate agents to make a distinction between the types of buyers they are targeting to order to market the property in the most appropriate way.
Goslett notes that establishing the type of buyer they are dealing with will assist in determining the buyer's needs and how they should be approached. He says that different features of a particular home will appeal to different kinds of buyers, depending on their criteria and type of property they are looking for. Goslett explains that generally property buyers will fall into one of four main categories:
Retail buyers
Although this type of buyer can be subdivided into smaller groups such as family buyers, young working couples, first-time or retired buyers, this is the average home buyer who is in the market to purchase a primary residence. They are buyers who have access to finance or enough money saved up to purchase a property cash. As the large majority of these buyers will require financing, an important aspect for this type of buyer will be the home's price and their level of affordability. Features that will be important to them will be proximity to their place of work and amenities such as schools, medical facilities and shopping centre's.
Buy-to-let investors
A property that can generate revenue while it appreciates in value over the long term is the main concern for this buyer. They are generally looking for a secure long-term investment that will be relatively low maintenance. Goslett says that these buyers are normally looking for sectional title units that require little or no renovation and can be rented out immediately to start earning income. In some cases they are also looking for larger homes that can be rented to upmarket tenants or students in a commune set-up.
Fix-and-flip investors
Fix-and-flip investors are normally full-time property investors looking for properties that are selling substantially below the market norm in a specific area. This type of investor will be looking for a property in need of renovation that they can restore and sell in a reasonably short period of time for a return on investment.
Hybrid buyers
According to Goslett, these buyers are not full-time property investors but they have 100% cash or a large deposit and good credit records. These buyers normally wait for the property market to fall or for a really good deal to come along before they make an investment. They generally prefer properties that don't require renovations and can be leased out as soon as possible.
Goslett says that although it is important for sellers to know the type of buyer they are dealing with, it is equally important that the seller is serious about selling their home and is open to negotiation. "With the market currently favouring buyers, sellers will need to be willing to negotiate. If a seller is merely putting their property on the market to see what they can get and they are not willing to budge on their asking price, it will be very difficult for them to sell their home, especially if their price is not market related," he says.
"A successful sales transaction occurs when the criteria of a buyer is matched by a property on sale from a serious seller. An experienced agent from a reputable real estate company can help to connect the right buyer with the right property and facilitate the sales process to ensure it is a hassle free experience," Goslett concludes.
Goslett notes that establishing the type of buyer they are dealing with will assist in determining the buyer's needs and how they should be approached. He says that different features of a particular home will appeal to different kinds of buyers, depending on their criteria and type of property they are looking for. Goslett explains that generally property buyers will fall into one of four main categories:
Retail buyers
Although this type of buyer can be subdivided into smaller groups such as family buyers, young working couples, first-time or retired buyers, this is the average home buyer who is in the market to purchase a primary residence. They are buyers who have access to finance or enough money saved up to purchase a property cash. As the large majority of these buyers will require financing, an important aspect for this type of buyer will be the home's price and their level of affordability. Features that will be important to them will be proximity to their place of work and amenities such as schools, medical facilities and shopping centre's.
Buy-to-let investors
A property that can generate revenue while it appreciates in value over the long term is the main concern for this buyer. They are generally looking for a secure long-term investment that will be relatively low maintenance. Goslett says that these buyers are normally looking for sectional title units that require little or no renovation and can be rented out immediately to start earning income. In some cases they are also looking for larger homes that can be rented to upmarket tenants or students in a commune set-up.
Fix-and-flip investors
Fix-and-flip investors are normally full-time property investors looking for properties that are selling substantially below the market norm in a specific area. This type of investor will be looking for a property in need of renovation that they can restore and sell in a reasonably short period of time for a return on investment.
Hybrid buyers
According to Goslett, these buyers are not full-time property investors but they have 100% cash or a large deposit and good credit records. These buyers normally wait for the property market to fall or for a really good deal to come along before they make an investment. They generally prefer properties that don't require renovations and can be leased out as soon as possible.
Goslett says that although it is important for sellers to know the type of buyer they are dealing with, it is equally important that the seller is serious about selling their home and is open to negotiation. "With the market currently favouring buyers, sellers will need to be willing to negotiate. If a seller is merely putting their property on the market to see what they can get and they are not willing to budge on their asking price, it will be very difficult for them to sell their home, especially if their price is not market related," he says.
"A successful sales transaction occurs when the criteria of a buyer is matched by a property on sale from a serious seller. An experienced agent from a reputable real estate company can help to connect the right buyer with the right property and facilitate the sales process to ensure it is a hassle free experience," Goslett concludes.
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