Friday, 14 October 2011

Don't make these mistakes buying a house

You've found the perfect home, there is consensus between you and the seller and all seems to be said and done. Not quite! Don't let your guard down until the very last moment and avoid the following mistakes:

Making an offer

Even if you've been shopping around a lot you might still find it slightly intimidating to finally make an offer, and rightly so. Your initial offer will influence how much you finally end up paying.

People sell their houses for different reasons and it is possible that the seller of the house you're interested in doesn't want to move at all. It is nearly a given that the seller will be sentimental about the house and won't be as critical as you are. There is bound to be tension on the side of both buyer and seller that could influence the effect of your offer. An offer that is too low could insult the seller and cause him or her to be less willing to negotiate. On the other hand, if your offer is too high you will probably end up paying more than the seller might have been willing to accept.

Really start looking at property for sale

Once you've made all the basic decisions, done the necessary homework and found a trustworthy estate agent, how do you approach the actual "house hunting" process? The keywords are questions and concentration.

Sectional title

Apartments and townhouses are usually sold under sectional title ownership. Such a purchase will mean buying into a kind of communal ownership. You buy more than just your own living space and you must abide by the decisions made by the majority of unit holders. You will become part of the complex's governing body, which takes the form of a so-called "Body Corporate" which entitles you to a say in all decisions that influence the complex or your ownership. 

Building A House

If you plan on building a house yourself, deal with professionals. The last thing you want is delays and costly construction supplies going to waste as a result of a builder struggling to find his way in the dark.

Find out how long the builder has been in the business and how many projects he's been in charge of. Considering the fact that a builder must be able to manage workers, use building supplies responsibly and finish the project within a given time, managerial and business skills are as important as building skills. You can also ask the builder about other projects he's been involved in and contact former clients to find out whether they were satisfied with the work.

Why rent?

Though buying has its advantages renting is sometimes the better option. If you need to relocate regularly buying simply won't be sensible. Finding a buyer on short notice could force you to settle for a lower selling price and the costs generated by the transaction itself is a further aspect to consider. Furthermore renting means that you have less responsibility as far as maintenance is concerned, and if you have a busy lifestyle this is ideal.

First time Home Owners

Buying property is a responsibility that should not be assumed lightly. It is an especially daunting undertaking for young and inexperienced would-be home owners.

Though buying a home and establishing one's self in the property market is a good move financially speaking, younger buyers should seriously consider the implications of buying a house. They may find that owning a home restricts their travel plans and keeping up repayments may become quite a headache if the endeavour is not properly planned and well thought through. Before buying remember:

Should you use an Estate Agent?

Penny-wise homebuyers who try to negotiate a private sale with a seller in the hope of knocking the price down may find to their regret they have been pound-foolish.

Selling your property privately may be dangerous. The first pitfall that usually costs buyers dearly is the so called voetstoots clause. Inexperienced buyers may overlook this finer detail and get stuck with expensive repairs they hadn't budgeted for. Sales agreements are laden with legalese terminology and loopholes to get lost in. Once the written agreement is signed, sealed and delivered a disgruntled buyer will find him or herself with little recourse in case of misunderstandings or if he's had the wool pulled over his eyes. 

Buyers Qualification

The buyer's qualification process removes much of the uncertainty for all parties involved in a house sale. The buyer needs to know what he can afford, the seller needs to know that the sale is secure and the Estate Agent has a similar interest as he or she is dependent upon the sale for commission.

Simple steps when buying a house

Once you’ve decided to move on to bigger and better things the challenge becomes finding those illusive greener pastures. But with all the information a buyer has at his fingertips nowadays, where do you start?

Getting all your ducks in a row is the first step on the road to a successful purchase. It empowers you in your decision making and enables your estate agent to advise you more effectively. In a nutshell, you have to decide what it is that you are looking for in a home and how much you can afford to spend getting it.

Thursday, 13 October 2011

Top Agent Questions "Ridiculously Low" Insolvency Sales

How can some liquidators justify turning down good, market-related offers for insolvent estates which then end up being sold for “ridiculously” low prices on auction? That’s what top Cape Town real estate principal Carina Nieuwoudt, owner of Realty 1 International Property Group in Cape Town North, would like to know. A worrying trend in a generally healthy market right now, according to Nieuwoudt, is that the number of insolvent estates has risen significantly in recent months - many in upmarket areas where people least expect. “It’s very sad that people are losing their homes,” she says. “The banks must accept a good measure of responsibility for this because during the good times, their valuations were too high and they granted credit too easily and often beyond people’s affordability. The result was that many people bought at their limit. While they could afford the initial bond repayments, they had nothing extra to meet the higher payments that resulted from the interest rate rising. This, on top of the fact that people are losing their jobs at a frightening rate, makes me emphasise to prospective buyers the importance of erring on the side of caution and making sure that they have a financial cushion should the interest rate rise again. The NCA (National Credit Act) is good in that it looks at what people have left to spend on bond instalments once they’ve paid all their bills each month. ” Still on the subject of insolvent estates, Nieuwoudt says she is baffled as to why liquidators are turning down good offers from estate agents. “My offers on insolvent estates are not only in keeping with valuations but are also always higher than the price they sell for on auction. I can’t understand it. All I can say is that sellers should try and avoid the auction route because the low prices received on auction are not in the best interests of bond holder or creditors. Rather, they will achieve the best selling prices from professional estate agents.” What’s also become a characteristic of the present market is that buyers are bargain-hunting as never before. “There is no doubt that the reasons for selling absolutely determine selling price, unlike in the past where supply and demand controlled market activity. Yet, contrary to many buyers’ beliefs, this is not the silly season and silly offers are being turned down all the time. That’s why there are so many counter-offers going backwards and forwards between buyers and sellers.” Not everybody has to sell, she continues. Yes, there are those in trouble but many other sellers are doing so in order to upgrade, downsize, relocate – the usual reasons. “As much as it’s important for sellers to be market-related, so buyers must be, too.” Finally, she says that those who are selling properties which they bought only a year or two ago will be lucky to break even and may even take a loss. However, sellers whose properties have accumulated a few years’ worth of equity may not realise as much profit as they would like but they will still make good money, despite pricing being under pressure. Ends

East, west, the truth about your home is best

In the light of the new Consumer Protection Act, homeowners who want to sell their properties would be well advised to “come clean” about any and all defects or drawbacks they know about.

“Of course the best course of action is to correct any defect you are aware of before you list your home for sale,” says Hano Jacobs, CEO of the Realty 1 International Property Group, “but this is not always possible.

“Sometimes homeowners don’t have the money to fix whatever is wrong, and in other cases they may not have the time or the inclination. In these instances what they should do is to make full disclosure to their estate agents and mandate them to negotiate a fair price on this basis.” 

This is especially important now that the CPA has come into effect, he says, since the overall intention of this legislation is to protect consumers from any misrepresentation, and to enable them to easily cancel sales where they can show that they have not been told the truth.

“We believe this means that sellers will no longer be able to shelter behind a ‘voetstoots’ (as is) clause in the sales agreement, or the old distinction between patent and latent defects – that is, those faults which are obvious and both the buyer and seller will be assumed to know about, and those that are not obvious and the seller might claim he did not know about.

“In fact, we think that sellers are going to have to go the extra mile now, not to prove that their homes have no faults, but to show that they are not deliberately concealing whatever faults there are and are negotiating transparently and in good faith.”

The best way to tackle this, Jacobs says, is to work with a professional agent who really understands that his or her job is not just about marketing your home and finding prospective buyers, but also about seeing the transaction through to the end, when the property is successfully transferred to a new owner. “Such an agent will take the time to go through your home in detail and properly assess how it compares to others currently on the market or recently sold in your area, and then assist you to set an asking price that is fair for the property in its current condition. He or she should also be able to tell you what repairs or improvements would be essential and/ or most cost effective if you want to attract more prospective buyers and better this price.”

In addition, he notes, many top agents these days are also compiling detailed disclosure reports to be incorporated in sale agreements and signed by buyers as well as sellers, so there can be no dispute later about what was and was not disclosed.