Social networks: The new mediaWed 25 Nov 2015

Social networks: The new media
Since the advent of the internet, we have been living in an age of instant information. Everything that anyone would like to know has become accessible and is just a simple click of the mouse away. Computers and technology are elements that have transformed the way in which people interact and communicate with one another, making the world a smaller place. With technological advancement constantly pushing forward, the face of business and industry has been forced to adapt to the ever-changing environment in order to accommodate the new way in which business interactions are undertaken. 
According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, within the real industry, agents have had to make adjustments to their marketing methods to ensure that they are integrating new forms of media into their marketing plans. “Gone are the days that real estate professionals could just use the traditional methods such as signboards, newspapers and flyers to promote and sell property.  While these elements still have their place, property websites as well as social media channels play a pivotal role in the strategy used by real estate professionals to market their property listings,” says Goslett. “Since the introduction of the internet, consumer behaviour has changed considerably. As many as nine out of ten property buyers are first searching for properties on the internet before turning to any other form of media.”
While publishers and editors were once the only gatekeepers of the media world, the introduction of social online platforms has changed the balance.  “Traditional media platforms still hold a part of the media networks, but social media has given consumers an influential voice, making them a new form of media network. Social hubs continue to grow and influence consumers in the real estate industry as well as other markets. In other words, it is the consumers themselves who have the power to impact the market and the opinions of other consumers,” explains Goslett.
He notes that both consumers and real estate professionals have the opportunity to share information, wisdom and speak their mind regarding the housing market or conditions that surround it. This has given estate agents the opportunity to market property in a different way, provided they change their approach. With the new generation consumer having the information readily available at all times, the relationship is no longer based on a trusted adviser capacity, but rather as another trusted resource.  Buyers and sellers require the facts, figures, graphics and comparative market analysis from an agent that they can’t get from other resources.  
According to Goslett, once an estate agent has become a conduit of information to the buyer and seller, their role would then be to guide them through the details of the transaction and help them make the best possible decision. “As a resource, the real estate professional will be able to provide access to the information and knowledge needed to conclude the transaction. However, it is the seller who will determine how that information is used. The buyers and sellers that do their own research will normally consult with the resources they have on social networks before they make a final decision,” says Goslett. 
He concludes by saying that as social media networks and their influence on the market grows, the face of the real estate industry will continue to transform accordingly. There are approximately 500 million users on Facebook, of which more than 50% are within the home buying age bracket. That is a massive pool of potential buyers and sellers that can impact the market and the way in which their peers view property investment. 
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Rate increases by 25 basis pointsThu 19 Nov 2015

Rate increases by 25 basis points
Remaining on its rate-hiking phase, the Reverse Bank has once again announced at today’s Monetary Policy Committee meeting that the interest rates would increase by a further 25 basis points. This brings the repo rate to 6.25% and the prime lending rate to 9.75%. 
The decision to raise the rates has been on the cards for some time, with current economic conditions leaving the Reserve Bank little choice.
With the US dollar strengthening over the rand in the last two weeks and the US Federal Reserve expected to raise its rates at their next meeting, economists had predicted that the South African Reserve Bank would follow suit and hike rates by at least 25 basis points. Concerns that the weakness of the rand would impact on inflation had economists expecting that the Reserve Bank would raise the rates to counteract the effects. However, while a higher rate could mitigate the inflation pressure, an excessive rate would slow economic growth and place more pressure on prospective property buyers and homeowners.  
The Reserve Bank had to address the current economic conditions that the market is facing at the moment, however it will be a balancing act to try and counteract inflation pressure while not stunting growth. It is expected that there will definitely be further rate increases during the course of 2016. Prospective property buyers, along with those who currently own property should prepare for this by tighten the reins on their spending habits and building a savings reserve. While those with high debt levels will be adversely impacted by a hiking cycle, those who have saving in place will benefit greatly. 
It is important for consumers to bring down their debt levels and place themselves in the most optimum financial position they can before the next Monetary Committee meeting.
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Show days - Are they worthwhile?Thu 12 Nov 2015

Show days - Are they worthwhile?
With nine out ten property shoppers looking for homes online, many real estate professionals have steered away from having traditional open show days, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. 
“Show days and their worth has become a somewhat controversial debate among agents. While some still believe that show days are an intricate and necessary part of marketing a home successfully, others feel that the marginal success rate coupled with the security risks are just not worthwhile,” says Goslett. 
He notes that there are merits to both sides of the argument. “Regardless of which side of the fence an agent stands on, both opinions have positive and negative attributes. For example, a few advantages of having a show day are visibility and accessibility. It is also possible for show days to save both the agent and the seller some time, as numerous prospective buyers can view the property within the same day. Regardless of which brand is represented by the sign outside the property, buyers will stop in at a show house to see what is on offer if they are interested in buying a property in that area. Another positive aspect is the fact that buyers have the opportunity to personally interact with the agent and ask them any questions they may have regarding the property. The interaction will also open up the chance for the buyer to be put on the agent’s database or make appointments to see other homes within their portfolio of stock,” says Goslett.
In certain instances, show days can be less stressful than a view by appointment strategy. This is because the cleaning and tidying is only done once a week, rather than numerous times to accommodate the potential multiple viewings in the course of the working week. The seller is also not inconvenienced by constantly needing to be home at a certain time or wait around to let buyers who want to view the property in. A show day can sometimes be easier from a logistical point of view. 
According to Goslett, a reason that many agents avoid open show days is the security risk to both themselves and the seller’s property. “With people able to walk into a show house from the street, it leaves it vulnerable to thieves. It is not always possible for the agent to keep an eye on everyone who is looking at the home - this means that it is sometimes easy for valuables to be removed from the home,” he says. “Unfortunately an open house can be a dangerous invitation to the criminal element, providing them with undeterred access to the property. This can put the seller’s and the agent’s safety at risk. There are also those who will come and view the property without any intention of buying, but are merely looking at the home for the entertainment value of it.”
Goslett says that when it comes to formulating the actual success rate of show days, it is very difficult because there is different feedback depending on the area and type of property. He adds that every neighbourhood has a unique demographic and dynamics, which emphasises the importance of working with an agent who understands their micro market. “Certain agents say that the majority of their sales come from buyers who viewed the home during a show day, while others have not sold a property using this method in the last three years. It largely depends on the area and what works there,” says Goslett.
 If not a show day, then what? For sellers and agents who prefer not to have open show days, there are other marketing options. Technology has seen massive advancement over the last decade, with buyers able to access a world of information and properties online. “The majority of prospective buyers have access to the internet via a computer or smart device of some kind. Added to that, property search portals are generally well advertised and very user-friendly. Buyers often appreciate the simplicity of the online resources available to them and how these resources have streamlined the property search process. Many of the best leads in real estate have been generated through online property search portals,” says Goslett. 
“Searching for a property online allows buyers to view and compare properties in their own time and without leaving their home. They can then make appointments to see the homes that they are serious about buying. Prospective buyers who do this know what they are going to see, as opposed to house hunters on Sundays who are looking at any property regardless of their requirements and budget.”
Goslett adds that other simple but effective methods of marketing a property are ‘For Sale’ boards, flyers at busy intersections and newspaper advertisements. He notes that many agents have also embraced the marketing power of social media networks to enhance their connectivity to buyers in the market. 
“Regardless of the method used to sell a home, it is vital that sellers use a reputable agent who has working experience in their area. The right agent will find an effective method to successfully sell the home for the best possible price and within a reasonable time frame,” Goslett concludes.
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Reducing stress during the property buying processThu 12 Nov 2015

Reducing stress during the property buying process
While an exciting chapter in one’s life, buying a home can also be one of life’s most stressful times, says Adrian Goslett, Regional Director and CEO of RE/MAX of South Africa. “Even though it may mean moving to a bigger and better property, the event of moving homes, while happy, can still be stressful as it is a disruption to a person’s routine. Any life event that affects a person’s routine, such as moving an entire family, can be a cause for stress,” says Goslett. “Packing up and unpacking belongings, finding a new property, dealing with sellers, applying for finance - all of these aspects can add to the stress. One of the key ways to effectively manage stress during the process and to reduce anxiety is proper preparation.”
Goslett provides a few tips to help buyers prepare and reduce their stress levels when purchasing a property:
Select the right agent
Working with an experienced and reputable real estate professional who can help provide guidance through the process will assist to alleviate some of the stress. “As a property professional who deals with the home sale process on a daily basis, an agent can be a highly valuable source of information. Having an experienced agent on hand to answer questions and assist deal with the paperwork can take a lot of pressure off,” says Goslett.
Create a list of wants and needs
Before going out and looking at properties, a prospective homebuyer should sit down and make a list of wants and needs of the features they are looking for in a home. “Buyers who have a clear idea about what they want will save time as they will have narrowed down their options. If buyers know what they are looking for beforehand, they will eliminate being put on the spot, which will also help to reduce anxiety,” says Goslett. 
Get pre-approval
Goslett says that rather than finding the right home and then waiting to see whether or not home loan finance is approved, buyers should go to a bank or bond origination company such as BetterLife Home Loans and request a pre-approval. “Pre-approval allows the buyer to shop for homes within their budget, while eliminating the waiting periods or any unpleasant surprises from lenders,” Goslett adds.
Keep things in perspective
When things seem like they are getting too stressful, it is important to try and look at the situation in perspective.  “Although moving to another home is a life altering experience, it is also an exciting adventure. It is important to find positive aspects about the experience,” says Goslett.   
Focus on something else
Sometimes it is best to take a step back and have a break. “Indulge in something that has nothing to do with the home sale process and requires undivided attention, such as an art class or yoga lesson. This will reduce stress by refreshing the mind and helping to bring about a new perspective on the situation,” says Goslett. 
Try not to take it personally
There will be sellers who reject a perfectly good offer. While it might be difficult to be completely unaffected, it is best not to take it personally and to understand that they have their reasons. 
“Although it might take some time to get established in a new home, it is best to try and get into a routine as soon as possible, especially if children are involved. It won’t be long before all the stress of moving is a thing of the past and the family is enjoying the benefits of their new home,” Goslett concludes.
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Budgeting tips to help save for a depositTue 10 Nov 2015

Budgeting tips to help save for a deposit
There are several benefits for homebuyers who can put down a deposit when they purchase a property, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. “Not only are prospective buyers more likely to be approved for finance, but they will also obtain a better interest rate, which will save them a considerable amount of money over the term of the bond.”
He adds that putting down a deposit, even if it is not a large amount, can positively impact on a potential buyer’s home loan success as it shows intent and demonstrates the ability to save. Banks see those who provide a deposit as far less of a risk. “Banks typically ask for deposits of between 10% and 30% of the asking price of the property; however there is actually no right amount for a deposit. A deposit of 5% of the asking price is far better than none at all,” says Goslett. “Depositing money after registration will bring down the capital and reduce the interest charged on the bond, but it will be far more advantagous to make a deposit upfront.” 
Another important aspect to keep in mind is that there are other costs associated with purchasing a property that will need to be paid. “Deposits are not the only thing that prospective buyers should prepare for. They will need to have money set aside for the transfer duty, registration and initiation fees, not to mention attorney fees. Having a savings plan in place will help buyers to achieve their homeownership goals and put them in a good financial positon,” says Goslett.
He notes that while saving enough money may seem impossible at times, planning and discipline can make it happen and owning a home is worth the effort. Goslett provides a few budgeting tips that prospective homebuyers can use to assist them in savings for a deposit and other home related costs:
Keep track of every rand
To know where to cut back means knowing where every rand is spent. Prospective buyers need to keep track of everything that they purchase over the course of each month. “It is important to categorise money into subsections such as food, entertainment and bills. This way it will be easier to track where the money is being spent and what areas can be reined in,” advises Goslett.
Want or need
With the records of the monthly expenditures, a potential buyer can further break down their purchases into wants and needs. Using this list will enable them to determine where spending can realistically be cut. This doesn’t mean that wants should be completely cut out, but perhaps reduced and managed more effectively.
Set aside funds
Open a separate savings account for the deposit and home costs. Goslett says that this makes it easier to track how much is in savings and how close the potential buyer is to reaching their goal. Having the money blocked off in a separate account will also help alleviate the temptation to spend it. 
Save automatically
Ideally the best way to save is to have a debit order set up, so that a fixed amount is taken off your salary and placed into savings without you having to do anything. “A potential buyer won’t miss money that they don’t see in the first place. Having a debit order set up also takes a lot of the discipline factor out of the picture,” says Goslett.
Seek professional assistance
Once there is a reasonably substantial bit of money saved, talk to a financial professional about other places you might invest it to get a bigger return than you would by keeping it in your savings account.
“For many, a property will be the largest asset they will own, so the more it can work for them and help create wealth, the better. This starts as early as when considering buying a property and saving for a deposit,” Goslett concludes.
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Getting the best home for your moneyTue 03 Nov 2015

Getting the best home for your money
For a buyer to truly understand whether or not they are getting the best home for their money, they need to understand the factors that contribute to a property’s worth, bearing in mind that there is more to the value of property than the price that the buyer paid for it. 
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, points out that there several other factors that contribute to a home’s value, which a buyer should consider before they make the purchase. These include aspects such as the property’s location as well as the micro market surrounding the particular sale transaction. Carefully researching these elements will help the homebuyer in selecting the right property and achieving good returns on their investment over long term.
“If a potential buyer has done their research and has a fairly good understanding of the numerous details that are involved in a property sale, as well as knowing the their own financial and personal requirements, they will have a much better chance of finding a property that offers good value for money,” says Goslett. 
He adds that determining the price bracket, the type of property and criteria that the property must have before starting the search, will make the process of finding the right home far easier. “Once the buyer has an idea of what they are looking for, a real estate professional will be able to assist them in fine tuning their search and narrowing down potential options. A real estate agent who specialises in the area in which the buyer wishes to purchase will be able to provide valuable information about that particular area. Often agents will have access to past sales figures and data that will help the buyer make an informed choice. They will also be able to guide the buyer with regards to the current conditions that surround the market in that area and whether or not the home is a worthwhile purchase based on its asking price, perceived market value and the cost,” says Goslett.
He provides potential buyers with a few considerations when looking for a good value-for-money property:
The price is right
The asking price of a home is regarded as the property’s worth in the current market. Goslett says that all too often sellers inflate their asking price due to their emotional attachment to the home. As a result the price that the home is on the market for is not always the true market value of the property. He notes that it is for this reason that buyers should have a broader understanding of the market in the area and compare selling prices of other properties which offer similar features. This will help the buyers to assess whether or not the asking price is within a fair range of market value for the area.
Evaluating true value
The current market conditions are one of the major influences when looking at the value of a property. In a boom phase of the market, property values are perceived to be far greater. Conversely, during a slump in the market homes generally sell for less. In the years that have followed the international downturn, property values have increased. “In fact, there are areas where property prices are higher than what they were during the height of the boom in 2007. This reiterates that fact that property is best viewed as a long term investment,” says Goslett. 
“Demand also has a huge impact on the perceived value of property and pricing. With the current market experiencing inventory shortages, demand has strengthened as fewer properties mean more competition among buyers. Essentially, a property’s value is largely determined by the buyer in the market, not the seller. The more that buyers are willing to pay for a property, the higher the property’s value will be.”
Factors that influence how much buyers are willing to pay for a property vary due to personal choice and lifestyle. Certain buyers might pay more for a property if it fits into their lifestyle needs, such as proximity to a particular school, their workplace or public transport. What determines value for one buyer may not be the same for another.
Don’t forget cost
Goslett says that homeowners often think that they will be able to make back a large portion of the cost spent on renovating and improving the property and therefore price it accordingly when they put it on the market. But, while there is a certain element of truth to that, it depends heavily on the renovation or upgrade. “How the renovation impacts the value of the property is also largely based on how they are perceived by potential buyers. Often renovation projects are based on the current homeowner’s personal preference or criteria. If the buyer has different needs or preferences, the renovation will have far less value to them,” says Goslett.
Although having a real estate agent provide a comparative market analysis is an excellent staring pointing in determining whether a property is a worthwhile purchase, a property’s true value will largely be subjective. “The buyer is the only one who will truly know what a home is worth to them. At the end of the day, a home is more than an investment – is a place to live,” Goslett concludes.
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Are you ready to own a home?Mon 02 Nov 2015

Are you ready to own a home?
Although homeownership is a goal for many South African consumers, if a person purchases a home before they are ready to do so, it could be a big mistake that ends up costing them dearly, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. 
He notes that buying and owning a home has numerous benefits, which include providing the homeowner with a sense of stability along with the freedom to make their own choices about what happens to the property. “Owning a property allows the owner to renovate if they want to or rent out the property to earn additional income – the decision is theirs to make. However, along with the freedom comes the additional responsibility and cost of maintaining the property. These are but a few of the elements that potential buyers need to consider before they purchase a home,” says Goslett.
According to Goslett, the first and most important consideration for a potential buyer to make when deciding whether or not they are ready to enter the property market is affordability.  Assessing one’s own affordability requires reviewing current lifestyle factors and financial status. It is vital that buyers are completely honest with themselves at this stage. 
“While the buyer might be able to afford a smaller property, if it does not meet their current lifestyle requirements perhaps it is best to hold back for the time being and save up more for a larger deposit,” advises Goslett. “It is also important to remember that affording home is not just about making the bond repayments, it also involves maintenance costs and rates and taxes among others.” 
He adds that another aspect of affordability is the nature of the buyer’s current financial situation. While it is impossible to tell what is going to happen in the future, it is essential that the buyer has a contingency plan in place should their financial position change in any way. 
“Purchasing a property and then selling it within a short period of time could leave the homeowner in a worse financial position than they were before they bought the home. This is why buyers need to ensure that they can hold onto the home for a reasonably long period of time to maximise their return of investment at sale. It is vital for homeowners to have savings available to cushion them and help them to continue making bond repayments in the event that they lose their job. These savings should be able to see them through for at least two to three months or until they find new employment,” says Goslett.
Another careful consideration that needs to be made is the buyer’s future plans. Purchasing a home means committing to that home or area for a long period of time. “Due to the long term nature of home ownership, a buyer needs to be sure that they are prepared to stay within the home and neighbourhood they select for a number of years and that the home they choose will accommodate their future plans. For example, for buyers planning to have children, proximity to good schools could be a priority, while older buyers facing retirement might want something further away from the hustle and bustle.” explains Goslett.
He emphasises the importance of saving for those consumers who are preparing to buy a property. Having as much savings as possible will give the buyer more financial options. “For example, a larger deposit can result in a larger home or a lower bond repayment. There are also legal fees, transfer duties and homeowners insurance that will need to be covered,” says Goslett. Consulting with a property industry professional or a mortgage originator such as BetterLife Home Loans will give the buyer an indication of what costs will be incurred during the purchasing process and how much they can actually afford to spend on the property.
Goslett advises that, if possible, potential buyers should work on reducing their debt levels before purchasing a home. Having more disposable income will be viewed favourably by banks when applying for a bond as well as help to alleviate some financial pressure on the buyer when it comes to meeting monthly payments. 
“Due to the gravity of the decision to purchase a property, potential homeowners should take their time and make sure that they are completely ready for the commitment of owning a home before they sign an offer to purchase,” Goslett concludes.
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How do interest rates affect the property market?Thu 29 Oct 2015

How do interest rates affect the property market?
The South African Reserve Bank has warned that they are currently in a hiking phase and consumers can expect the interest rate to increase in the near future. Why is this important for the South African property market and homeowners? 
“Well,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, “the fact is that there are only a handful of people in South Africa who are able to purchase a property with cash. Most homeowners and potential buyers in this country are loan-dependent and therefore will require financial assistance from a lending institution in order to buy a home. As a result, the interest rate will affect most homeowners at some stage of their lives in some way.”
Goslett notes that as the majority of the population is loan-dependant, fluctuations in the interest rates can have a substantial effect on potential buyers who are entering the property market and more particularly those who already own a home.  “To a large degree, homeowners who have chosen to fix their interest rate will be less affected by any changes; however it is important to remember that they cannot fix the interest rate for the full term of the loan. They will therefore inevitably be impacted by interest rate increases at some stage,” says Goslett. “Homeowners who have kept their interest rate linked to the prime lending rate will have a reduced monthly repayment the lower the interest rate or an increased monthly repayment if it goes up.” 
An advantage of a low interest rate is that it provides homeowners with the opportunity to pay additional money into their bond account to reduce the term of the loan, without it having a severe impact on their monthly budget. The lower the rate, the easier it will be for homeowners to pay the required monthly repayment and add in a little bit extra. 
“Although we are currently in an interest rate hiking cycle, when compared to the interest rates during the boom period, consumers are currently paying far less interest for their homes. At the end of 2008, the prime lending rate was 15%, while it is currently at 9.5%.  Based on a home bonded at R1 million over a twenty year term, the monthly repayment would have been around R13 167.90 in 2008, while a bond of R1 million today would cost around R9 321.31 to service monthly,” says Goslett.
Aside from the possible fluctuations on the monthly repayments for homeowners, the interest rate directly affects buyers wanting to purchase property and how much they can afford. Since the introduction of the National Credit Act (NCA), financial institutions have placed a great deal of emphasis on affordability levels and a low interest rate assists buyers to show higher affordability levels. 
“The interest rate directly affects the size of the bond that a potential buyer will be approved for.  Lower rates generally mean that the buyer will be able to afford a larger bond, provided that all other qualifying criteria are in place. It is important for a buyer to consider whether they still be able to afford the bond if the interest increases by between 1% and 2% just to play it safe,” says Goslett. 
He notes that lower interest rates will also indirectly impact the amount of disposable income which is available within a household. Considering that disposable income weighs heavily in a consumer’s favour when applying for a home loan, as more buyers show affordability, demand in the property market increases. The increased demand pushes property prices up and will contribute to an increase in a home’s value over time.
According to Goslett, from an investment perspective the increased demand for property as well as the reduced monthly repayments on home loans will result in investors gaining more from their property portfolios. For example, investors who have a rental portfolio will be able to charge the same rental for their units, while paying reduced bond repayments resulting in greater profit. The less interest that is paid on an investment property annually means a lesser net return will be needed for the owner to see a profit on their initial investment.  
Homeowners and potential buyers who wish to reduce the impact of an interest rate hike should reduce their debt levels as much as possible and keep them to a minimum. “Reducing debt and increasing savings will ensure that homeowners are in a better position and have some financial leeway when interest rate hikes happen. It will also increase potential buyer’s chances of getting bond approval,” concludes Goslett.
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External factors that impact on property salesMon 26 Oct 2015

External factors that impact on property sales
There are few investments that can have as much of an impact on a person’s financial well-being as purchasing a property. Not only can it affect the buyer’s current financial standing, but their long-term financial prospects as well. This is why, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, it is so important for people to take their time when making the decision to purchase a property and to consider all aspects that could have an impact on that decision. 
“For the majority of the population, buying a home will be the largest financial purchase that they will ever make and the property itself is likely to be their largest asset. Owning a property is considered by many as a measure of success. In fact many place more value on owning a home than any other type of investment,” says Goslett. “However, there are a number of factors that should be carefully considered before a consumer can realise their dream of becoming a homeowner. These aspects are often out of the consumer’s control, but will have a bearing on the property market and should influence the decision to purchase a property.”
He adds that all potential homebuyers should make themselves aware of these factors before they set out on their journey to buy a home. “It is important to look into these influences as they can change the market dynamics and the environment in which would-be homeowners find themselves. Understanding how these factors control or change the property market will help to empower potential property buyers with the knowledge to assess the changes they need to make in order to make a sound property purchase decision,” says Goslett 
He discusses a few of the external influences that could impact the property market:
Economic factors
Issues such as rising electricity tariffs, the price of petrol and the rate of unemployment will all have a bearing on the housing market. This is because these economic factors place pressure on the population and their affordability ratios. Needless to say, if the country’s economy is struggling or experiencing negative trends, it will impact on consumers and their ability to afford a property purchase. The state of the greater economy will directly impact the state of the housing sector. An increase in living costs will likely result in fewer consumers being able to show the necessary affordability levels to qualify for home loan finance. 
Access to home loan finance
Before the global recession impacted South Africa, the National Credit Act (NCA) was introduced to nullify the effects to the economy as much as possible. While the NCA did have the desired effect, it also brought about much tighter qualifying criteria for home loan applicants. As a result the bond approval rate decreased from around 80% to below the 50% mark. This in turn resulted in the lowest level of property transactions experienced in the last decade occurring during 2009 as fewer buyers had access to home loan finance, therefore fewer were able to purchase property. 
While criteria for bond approval have remained relatively stringent, the approval rate has improved as banks have increased their appetite for risk and more consumers are making the necessary financial provisions to meet the lending requirements of the banks. Potential buyers have started to prepare for homeownership by saving up for deposits and reducing their debt levels. 
The interest rate
Most consumers who purchase a home are reliant on the bank to finance the deal, and as result they are heavily affected by the rise or fall of the prime interest rate. Even if the homebuyer opts to link their bond to a fixed rate, the rate they are given is still influenced by the prime rate. If the rate is considered by consumers to be on the low side, they are generally more inclined to enter the property market, whereas higher rates would have potential buyers thinking carefully before making an investment. An increase of 1% in the prime interest rate will result in a monthly bond repayment increase of R657.76 per million. Increases in the interest rate generally slow the market and affect buyer’s affordability levels.
With the introduction of the NCA a prime example, legislative changes can have a massive impact on the property market and how business is concluded. Over the past few years there have been several legislative changes that have influenced the property market such as the Credit Amnesty Bill. Legislative changes to the real estate agent qualifications also had an impact on the market, with buyers and sellers now more assured that they are working with a qualified industry professional. 
“Although buyers cannot control external factors, it is important that they take them into account when making their property buying decision. Wherever possible, buyers should do their research and make sure that they are as well informed as possible before they take the final steps toward becoming a homeowner,” Goslett concludes.
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Steps to building wealth through real estateTue 20 Oct 2015

Steps to building wealth through real estate
Real estate investment can provide a cornerstone on which an investor can build their wealth, provided of course that the prime principles of property purchasing are adhered to, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
“Building a solid investment property portfolio takes time and a great deal of research,” explains Goslett. “Savvy real estate investors spend much of their time gaining as much knowledge about the local property market and trends as possible. This is because one property purchase can vary greatly from another, depending on the phase of the market, time of year and the property’s location to name a few aspects. It is vital to know exactly which phase the market is in and how this could impact on the return on the investment. The property market follows a cyclical pattern of boom and bust periods, and there is inevitability as to what will happen next.”
According to Goslett, money can be made during a boom period as home prices are generally higher and driven by demand. Often people tend to shy away from buying a property in the quieter periods; however these are often the times that provide property investors with excellent opportunities. “The golden rule when investing in shares on the stock market is to buy low and sell high, however, when it comes to property many consumers take the opposite approach and steer clear of the market when it is slow. Thinking outside of the box and not following the general trend is often the way investors find their big opportunities that make the most difference to their bottom line,” says Goslett.  
He notes that although there are costs involved in owning and maintaining an investment property, when considering the size of the asset that the investor is purchasing, a consumer does not need to have a large amount of money upfront to get into the game. “Provided that the investor has a good credit record, is able to put down a deposit and can prove that they are able to afford the monthly bond repayments, a bank will be willing to finance the purchase of the property. There are few other forms of investments that can be financed in this manner,” says Goslett. “Another positive aspect is that the investor’s returns are not based on the percentage of the deposit which they provided, but rather on the total value of the asset.” 
Goslett explains that a major factor that can influence the returns that an investor can expect is the property’s location. “It is vital that the investor purchase in an area that they know will continue to perform well over time. Although there is no guarantee, looking into an area’s past performance as well as at any future planned projects or developments will provide the investor with a glimpse into the area’s potential. Location is a key aspect to any real estate purchase,” he adds. 
For example, a flat in Green Point, Cape Town, would have cost between R250 000 and R300 000 about fifteen years ago, but would sell in the region of between R2 million and R2.5 million in today’s market. That is an investment return of nearly ten times the initial investment. “When considering that the initial purchase may have been financed by the bank, the investor’s outlay would have been the deposit and the monthly cost of property. There are very few, if any investments that would be able to rival those kinds of returns,” says Goslett.  
He notes that history has shown that a property will continue to grow in value over time. An investor could see a return on their investment within a five year period, but it is ideal to keep the property for as long as possible so that its value can continue to increase with inflation. In fact, property value growth often outstrips inflation over the long term, even if there are some ups and downs along the way. 
“The steps towards building wealth through real estate are no secret at all. See property as a long term investment, if possible hang onto property or buy during the lows and sell during the highs,” Goslett concludes.
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Older property purchasers continue to have greater buying powerThu 15 Oct 2015

Older property purchasers continue to have greater buying power
Interesting buying trends have emerged over the last three months, showing that the number of first time buyer home loan applications seems to be tapering off, while older buyers are spending more, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
Goslett notes that according to the BetterLife Home Loans statistics for the RE/MAX group for the period June-August 2015, there has been a decline in home loan applications from first time buyers, while the average deposit requirement for first time buyers has increased from just over 10% in June to 13.68% in August. The average loan-to-value offered to first time buyers has also dropped from 91% in June to 88% in August. Analysis of all home loan applications received by BetterLife Home Loans from RE/MAX reflects that overall loan-to-value ratios have decreased from around 86% to just above 84%, while average deposit requirements have increased from 19% to just over 21%.
“Despite a slight increase in average salaries of the applicants, the cost of living has increased dramatically and many consumers are finding their budget’s stretched. That is why saving up for a property, or having a ‘rainy day fund’ savings account when you own a property is important,” says Goslett. “In light of interest rate hikes and a constrained economy, it is not surprising that the loan-to-value average has decreased slightly or that the deposit requirements have increased.” 
Looking at buying trends, Goslett points out that the majority of home loans granted through BetterLife Home Loans for RE/MAX applicants has been for homes within the R500 000 to R1million price range (41%), while 21% of home loans granted were for properties priced between R1million and R1.5million. Those properties priced between R1.5million and R2.5million accounted for just 16% of home loans granted to RE/MAX buyers.
Provincially, properties within the Western Cape had the highest average purchase price among all the provinces for the period June to August 2015 at R1.576 million. Interestingly, it was Mpumalanga that followed at R1.345 million, then the Free State at R1.277million, while the average purchase price for property in KwaZulu-Natal during the June-August period was R1,164million. Surprisingly Gauteng lagged behind with an average purchase price of R1.16million.
While the average age of buyers applying for home loans remains at the 37 year old mark, the more mature generations continue to have greater buying power. The BetterLife Home Loan statistics for RE/MAX buyers between June and August show that buyers in their 50s spent an average of R1.479million on a property, which is 60% more than what those in the 20-30 year old age bracket spent (R924 771). 
“This trend is understandable as older buyers have a lifetime’s worth of income and investment growth to utilise. Buyers in their 20s are typically just starting out in life and therefore their access to credit is defined by what they earn as they typically won’t have made any major investments by that stage of their life,” says Goslett.
Based on applications for home loans received from RE/MAX, 98% were for standard home loans as opposed to for vacant land, further advances or building purposes.
“While the medium term economic outlook for South Africa may not be as rosy as any of us would like, property remains a good prospect for long-term investment,” Goslett concludes.
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Financial questions to askThu 15 Oct 2015

Financial questions to ask
Since the introduction of the Credit Act consumers have needed to be financially prepared before applying for a home loan. Banks and financial institutions will perform extensive research on a bond applicant’s financial history before they approve the application. Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that it is vital for consumers to assess their financial situation and know the answers to the following questions before they meet with their bank and apply for finance:
What is your credit score?
According to Goslett, it is important for potential homebuyers to know their credit score and take a look at all the items on their credit record to ensure that there are not any mistakes or unexpected issues. Consumers are entitled to a free credit report each year, so they should be sure to check it. “Consumers need to ensure that any accounts or bills are kept up-to-hat have ended up in collections are paid and sorted out before they apply for finance. Any default or slow payment will have a negative impact on the consumer’s credit score, so it is important to make payments timeously,” advises Goslett.
What is your annual income?
A consumer’s income will determine the bond amount that they qualify for. For this reason, Goslett says that it is important to include any bonuses or annual investment returns when making this calculation. Annual tax return documentation will assist the applicant in determining their actual yearly income.
How much debt are you in?
Home loan amounts are largely determined by the amount of disposable income the applicant has available, so where possible consumers should try to pay down their debt levels. “Before applying for a home loan, an applicant should tally up their account payments, credit cards and other monthly payments. This information will be required by the lender in order to determine the applicant’s debt-to-income ratio, which will be used as a tool to determine the appropriate bond amount,” says Goslett. “Having a lower debt-to-income ratio will be highly beneficial to a consumer who wants a higher bond amount.”
What is your financial worth?
Banks will want to see documentation that relates to any assets, such as vehicles, investments and income-generating properties. Goslett says that all of these aspects add to the applicant’s nett worth and will have a bearing on the amount that the bank is willing to grant.
What kind of deposit can you put down?
In most cases the bank will require the applicant to put down a deposit. Depending on the situation, the required deposit can vary from 10% to around 30% of the purchase price of the property. Goslett says that applicants will also require additional funds for all the costs associated with a property purchase such as transfer fees, attorney fees and bond costs.
What can I afford?
Ideally the monthly house payment, which includes the bond, interest, taxes and insurance should not take up more than around 30% of the applicant’s income before taxes. “Potential home buyers will be able to get an idea of their affordability levels from an online bond calculator or with the help of a financial professional. Bond origination companies such BetterLife Home Loans will be able to provide potential homebuyers with a guideline as to what bond amount they can comfortably afford,” says Goslett. “Financial preparation is the key to homeownership readiness and will make the bond application process far smoother,” he concludes.
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Tips for long distance home searchesMon 12 Oct 2015

Tips for long distance home searches
Moving across the country, whether for employment opportunity or family reasons, can be a daunting endeavour. However, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, although it can be challenging at times, we live in an age where technology has made the world a smaller place which makes moving across the country - or the world for that matter - far less difficult.
Goslett provides a few tips for buyers who are looking to find the right property during a long distance search in an unfamiliar market:
Make use of the internet: Nine out of ten buyers will begin their property search online whether buying in the same neighbourhood or on the other side of the country. This is because buyers are able to access a massive amount of information within a short period of time and within the comfort of their own home. Goslett says that buyers will be able to find information about the cost of living in certain neighbourhoods, the average price of the homes available and what kind of amenities and schools are in and around the area. 
Look beyond the photos: In many cases agents have loaded virtual tours of their listed homes. This way a buyer can browse through the home without actually having to go there in person. In addition, sites such as Google Maps are highly useful to get an idea of the home’s street view and surrounding elements. “Certain agents have used drones to video the home from an aerial perspective, which allows the buyer to get a bird’s eye view of the property’s ground and the surrounding neighbourhood,” says Goslett.
It is all about the timing: The property market is cyclical with the phases moving up and down over a period of time. Each areas experiences a different market phases at a different time, depending on external influences that may have an impact. For example, Goslett explains that an area may experience an upward surge in home values due to the opening of a new shopping mall or university. When searching for property, buyers should take these cycles into account and search strategically.  
Make use of your network: Social media is a great way to let everybody know about the home search. The more people that know within your network the better, because there might just be someone who knows of a good opportunity in the area you are moving to. “If friends or family are already living in the area, it is helpful to have them take a look at the property in person to get a feel of the home and spot anything that the virtual tour may have missed,” advises Goslett.
Make a strategic visit: While not always possible, it is best to plan a visit to the area before moving there. This will enable the buyer to drive through and explore different neighbourhoods in person. An agent will also be able to create a schedule of showings and tours of the neighbourhoods in which the buyer is interested in, in order to maximise the time spent in the area.
“Regardless of whether the home search is local or countrywide, the most important aspect to any successful home search is working with a reputable, experienced real estate professional. An agent who specialises in the buyer’s area of interest will ensure that the home search is a far smoother process,” Goslett concludes.
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DIY or professional contractorMon 12 Oct 2015

DIY or professional contractor
Certain household improvements may look easy enough when viewed on TV or the internet, but they are not all as straight-forward as they seem. This brings about the dilemma of doing the project yourself or calling a professional. Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that there are a number of factors homeowners should consider before they decide to embark on a home improvement project without the help of a professional.
The cost
Goslett says that while doing the labour yourself may seem like a more cost effective option, making mistakes could mean having to redo the project or call a professional at a later stage, which means that it is actually more expensive in the long run. He notes that homeowners should only embark on a home improvement project themselves if they are confident that they can complete the job in a manner that will add value to the property. In some cases, if the work does not appear to be professional, it can negatively impact on the home’s value and turn potential future buyers away. 
Can you live without using the space?
Certain projects such as flooring, re-tiling or plumbing can take entire areas of the home out of commission for the duration of the work. “Regardless of whether the homeowner does the work themselves or hires a professional, certain jobs will mean being unable to use that specific space in the home.  However hiring a professional may mean that the job is completed within a faster time frame,” says Goslett. “Homeowners will only be able to work on the project after hours, whereas a professional will be working on the project while the homeowner and their family are at work and school.”
Do you have the time?
Often home improvement projects can take a lot of time, so it is important for homeowners to be realistic about their time constraints and whether or not they will be able to fit additional work into their schedules. “Homeowners need to carefully consider if they have the time to start and finish the project that they start. The project might be started with the best intentions, only to have piles of supplies sitting in and around the home for ages. It is vital for homeowners to be honest with themselves rather than have a permanent, unfinished item on their to-do list,” says Goslett.
Consider the worst case scenario
Not all DIY projects are as straight-forward as they seem at the outset. Although demolishing a wall might seem as if it’s just taking a sledge hammer to it, it is critical to assess whether the wall is an intricate part of the building’s structural integrity. There is also the matter of whether the wall contains electrical cabling or plumbing. All these aspects makes a seemingly easy project far more complicated. 
Regardless of whether or not the homeowner has the time, tools and idea of how to undertake a project, there are certain aspects of home improvements that should be left to the professional due to the safety factor - these include aspects such as asbestos removal, gas appliance repairs, anything connected to the main electrical line and roofing.
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Maximising small spacesTue 29 Sep 2015

Maximising small spaces Whether it is because you are retiring and buying a smaller home, moving in with roommates or have just purchased your first start-up home, it can be a big advantage to find ways to maximise the space you have and make the most of what is available, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. He provides a few tips for when one moves into a smaller space: Declutter Ideally when it comes to downsizing or maximising small spaces, it is best to reduce clutter as much as possible and only keep the items that are essential. Holding onto unnecessary items will only make it harder to find space for the necessary ones. “Confront drawers that have been classified as the ‘everything drawer’ and see what is useful and what is just taking up space. Often the reason an item lands up sitting in a drawer for months is because there is no longer any use for it,” says Goslett. Sort stuff into yes, no and maybe piles If possible it is best not to have a maybe pile as this means dealing with items more than once. Homeowners should try to deal with each item once and make a decision as to whether they are keeping it or getting rid of it. While this may seem like a difficult task, especially for those who struggle to let go, ask whether the item could be replaced if it lost and how often it really gets used. Donate While packing it is possible that you’ll find a number of hidden treasures that might not make sense to take to your new home. There are several charitable foundations that do amazing community work which would benefit from a donation of household items. “A great deal of charity organisations can only do the work that they do due to donations made by the public. Making a donation is a great way to reduce clutter and provide assistance to members of the community who are less fortunate,” says Goslett. Remember to only donate items that will be useful and which are still in good working order. Make some money Goslett points out that selling off items is another excellent way to get rid of unwanted items while making some money to put towards the move or towards buying more suitable items to fit the new space. Be seasonal Although it might not always be practical, only have the current seasons clothing in the cupboard. Large winter coats and winter boots take up a lot of space, so if possible these items should be left in storage or stored in sealable containers and packed away until needed. Get organised Although the object is to get rid of items, going and buying an organisation system or containers that can help to reduce the amount of space needed for items can make sense. “Organisation goes a long way to decluttering an area without having to throw any items away,” says Goslett. Follow the trend Getting rid of clothing and unwanted items will mean that you may no longer need a large set of drawers. Large pieces of furniture can be sold or donated to make space for more suitably sized furniture. Be strategic Instead of aimlessly shoving items away, have a plan when packing them into cupboards and drawers. If an item is not used very often but is an item that is going to be kept, pack it into a box and label it. Boxes and containers are easily stacked to make more space and will help to protect the items inside. “Having a plan and ensuring that only the necessary items are moved across to the new home will ensure that the most is made of a small space. Maximising the space available will make the home a more comfortable space to live in,” Goslett concludes.
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Tenants and landlords should know their rightsMon 28 Sep 2015

Tenants and landlords should know their rightsOne of the most important aspects that potential landlords should consider before deciding to let out a property is a tenant’s rights and what implications they have if the contract turns bad at any stage during the period that the tenant occupies the property, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. “Times have changed over the years and removing a tenant from a property is far more difficult than it used to be, even if that tenant is defaulting on their monthly payment. Landlords who overlook a tenant’s rights and use illegal or unfair methods to remove the delinquent tenant from the property will be dealt with severely by the courts. This emphasises the importance of researching tenant’s legal rights, along with thoroughly vetting all potential tenants before they take occupation of a property,” says Goslett. He notes that anyone considering letting out a residential property should familiarise themselves with the Prevention of Illegal Evictions Act (PIE) Act. “While the Act has been in effect for some time, with access to so much more information, tenants are becoming far more aware of their rights and landlords need to know what they can and cannot do. Although the systems were put in place to protect both parties, the Act weighs in the tenant’s favour,” says Goslett. “A landlord cannot under any circumstances resort to eviction tactics such as changing the locks, cutting off water and electricity or forcibly removing a tenant that hasn’t paid rent without receiving authority from the courts to do so.” “As much has tenants have rights and those rights should be protected, it is also the responsibility of the tenant to ensure that they keep to their end of the agreement and look after the property as if it were their own,” says Goslett. According to Goslett, the relationship between the tenant and landlord should be based on mutual respect with both parties benefiting from the arrangement. A tenant should ensure that the rent is paid timeously on a monthly basis and the landlord needs to ensure that the property is maintained and kept in a satisfactory condition. He notes that the Rental Housing Tribunal administers the Rental Housing Act 50 of 1999, facilitating relations between tenants and landlords. The responsibilities of the Tribunal include advising tenants and landlords of their rights and obligations as well as resolving issues. The Housing Tribunal has mediating facilities and if the issue cannot be resolved over the table, then a hearing will be called. It is worth noting that a ruling of the Tribunal is deemed to be an order of a magistrate ‘s court in terms of the Magistrate ‘s Court Act,1944 (Act No 32 of 1944). The most common issues raised with the Tribunal include:
  • Failure to refund deposits
  • Unlawful notice to vacate
  • Exorbitant increases in the rental
  • Failure to pay rent
  • Unlawful seizure of possessions
  • Failure to reduce the lease to writing
It is important for landlords to do their research and handle their rental portfolio in a professional manner erring on the side of caution. “Landlords have certain obligations and procedures that they need to adhere to. The landlord needs to know these procedures, just has it is equally important for tenants to become familiar with their rights. “Landlords and tenants who can maintain a good relationship will reap the rewards of a mutually beneficial agreement,” Goslett concludes.
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What sellers can expect from a show dayTue 22 Sep 2015

What sellers can expect from a show day Once sellers have placed their home on the market and have made the necessary preparations, what can they expect from their first show day? Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that are several things that sellers can expect when they open their home to the public. Don’t be home According to Goslett, the first thing that sellers should expect is to make arrangements to be out of the home during show days. “Potential buyers will feel far more comfortable to explore the home if the current owner of the home is not present. It is best to leave the showing of the house to the agent, so that buyers can envision themselves living in the home,” says Goslett. Expect neighbours to drop in Among the potential buyers there are likely to be a number of curious neighbours that drop by to see the home. This is partly because they would like to compare the property to theirs and see the potential price they could sell their home for and partly just to snoop. The upside is that they will be able to talk to potential buyers about the area. Remain contactable Goslett says that while homeowners should not be home during show days, they should be available via phone at all times in case the agent or a potential buyer has a question. Find an alternative place to park your vehicle Ensure that there is as much free parking space available for buyers as possible. If the homeowners only has one car then this isn’t a problem as they won’t be there during the show days, however all other vehicles should be parked at a friend’s or neighbour’s home to make space for potential buyers and the real estate agent. Feedback from the agent Goslett says that the real estate agent will solicit comments from the potential buyers who view the home and will be able to provide feedback to the seller. This information will be helpful to gauge the interest in the property and make adjustments regarding the asking price or home updates that need to be done. Be patient While the shortages of property available to buyers has pushed the market in seller’s favour, some homes may still take some time to sell. “An agent’s objective is to sell a home for the best possible price in the shortest period of time, but this may not be overnight. It could take one or two days before the show day foot traffic translates into calls from buyers who are serious about purchasing the home,” says Goslett. He concludes by saying that if the seller has chosen to work with a reputable, experienced real estate professional, show days can be a highly effective marketing tool.
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Making compromises during the home searchTue 15 Sep 2015

Making compromises during the home search Buying a property with a spouse or partner can be an exciting time, however choosing a home that meets both parties’ needs is not always easy. “One person’s vision of the ideal home may not be the same as the others’. Everyone has their own unique idea of their dream home, which often makes finding the perfect home for both individuals a difficult task,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. He notes that while difficult, it is not impossible, provided that both parties are willing to work through it together to find a home that makes everyone happy. Goslett provides a few tips that can make the process a little bit easier: Write a list Putting pen to paper is an ideal way to organize one’s thoughts and have a clear vision of what each person wants. Both partners need to sit down and make a list of the top ten features they would like in their next home. They might be surprised to learn that their wants are not as different as they seem at first. Determining wants from needs Once each person has made their list, they should then categorise each of the items into wants and needs. Goslett says that a want is something that the buyer would like, but could live without if necessary while a need is something that they cannot live without. An example of a want is a view from the home, while a need could be office space or an extra bedroom for a growing family. Put the items in order of priority Arrange the features on the lists in order from the most important to the least important. Put the items in order of priority Communication is a key element for a successful relationship between two people. This means that sitting down and discussing the motivation behind each of the items on the lists, which will give the other person some insight into why those aspects are important. Be open to making compromises Although both parties may not agree on certain items, it does not mean that homes with these features should be completely discarded from the search. Goslett says that buyers may be more inclined to change their mind about a feature once they have seen it in person and have heard the other person’s motivation behind why that element is important to them. Keep an open mind and be prepared to make some compromises. Be open to making compromises A real estate agent can provide an objective point of view that can help both parties find neutral ground. Goslett points out that an experienced real estate professional will be able to give unbiased advice regarding which features will be able to fit into their budget and which won’t work as well. Run the numbers Calculate the cost of adding the features to the home at a later stage. Just because the home does not currently have all the features at the moment, it does not mean that it cannot be changed. Part of the compromise might be waiting a while before the home is upgraded, but not necessarily completely letting go of those wants. Take a break Searching for a home can be an emotional experience, so if discussions become too heated, take a time out from the search and focus on something else for a while. Sometimes stepping away from a situation can give a new perspective and renewed energy to deal with it. Keep an eye on the big picture Buying a home together is about embarking on a new adventure. It should be more about moving forward together than pulling in opposite directions. Compromising is worthwhile if it means that the relationship is strengthened. “Buying a property with someone may mean letting go of the dream home vision to find the right home that fits both partners,” Goslett concludes.
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Fixtures and fitting - what goes and what stays?Thu 10 Sep 2015

Fixtures and fitting - what goes and what stays? Often when disputes arise between buyers and sellers, it is regarding an item of the home that was seen as a fixture, but was during the home sale process. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, it is for this reason that sale agreement between the two parties, otherwise referred to as the offer to purchase, needs to be clear regarding all aspects relating to the sale of the home. “It is not uncommon for a homeowner to have installed certain items in their home that they intend to take with them when they move. Even if the item is regarded as fixture, a seller is within their rights to take the item, provided the buyer is aware of the fact and is in agreement,” says Goslett. “Alternatively, if the agreement of sale excludes any specific item, the seller is entitled to remove it, which again points to the importance of ensuring that the sale agreement that covers all aspects clearly.” He notes that disagreements occur when the sale agreement is vague and does not list the specific fixtures that will remain in the property. According to Goslett, the seller should prepare a list itemising exactly what is to be sold with the house prior to listing the property with an estate agent. “The list should be incorporated into the mandate to sell so that the agent can point out to potential buyers any items that will be removed by the seller at a later stage,” he says. When it comes to fixtures and fittings, the general rule is that when a buyer purchases a property, they receive the land, the permanent physical improvements such as any buildings erected on the land, along with all items that are permanently attached to the improvements or buildings that are erected on the land. This includes all upgrades, fixtures and fittings of a permanent nature. This is why it is to define what is regarded as permanent nature. According to Goslett, there are three aspects to consider when defining whether a fixture or fitting is of permanent nature:
  • The first aspect to establish is the intended nature and purpose of the item when it was attached. Is the item attached to the land or a structure erected on the land and does this item intend to serve the land on a permanent nature?
  • How was the item attached? If the item is attached to the degree that removing it would cause damage to the structure or land that it is attached to, then the item should remained fixed and be considered permanent.
  • The owner’s intention when attaching the item should be taken into account. If the intention of the owner was to permanently attach the item, then that should be given consideration.
According to Goslett, if an item is bolted, cemented, sown or planted and has taken root it is generally regarded as permanent. He points out that a contentious issue can arise when it comes to structures such as Wendy houses, pergolas or other similar structures. Goslett says that the seller should provide the buyer with plans if the structures are permanent and will remain on the property. To avoid any confusion or disputes at a later stage, Goslett says that a basic clause regarding the fixtures and fittings should be included in the agreement of sale. The clause should be similar to the following: The property is sold inclusive of all existing fixtures and fittings of a permanent nature, which the seller warrants are his/her exclusive property, fully paid for and in working condition, including but not limited to: the existing garden, trees, shrubs, plants, curtain rails, rods, pelmets, fitted carpets, the light fittings, stove and/or oven, hanging mirrors, towel racks, shelves, as well as special tap fittings, removable kitchen units, tennis court net, fireplace grate/blower, fitted kitchen storage units, awnings, post box, burglar alarm system, doorbell/knocker, the television aerial and accessories (if applicable), pool filter, pump and all cleaning equipment including automatic pool cleaner (whether fixed or movable, if applicable), swimming pool equipment, inner and outer door keys. “The more specific the clause is the better. This is to ensure that nothing is left open to interpretation by either party. Taking the time and effort to include all fixtures when the sale agreement is drafted will help to avoid any frustration that could arise later on,” says Goslett, who notes that while there might be a verbal agreement between the two parties, if the agreement has not been reduced to writing it is very hard to prove anything at a later stage should the need arise. “Before placing their home on the market, a seller needs to carefully consider exactly what they are intending to include in the sale and perhaps remove items before the home is opened to buyers,” says Goslett, “However, if it is not feasible to remove the items beforehand it is imperative that there is an open channel of communication and the seller’s intentions are made clear to buyers from the outset. This will ensure that conflict is avoided by both parties,” he concludes.
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Ways to use your tax refund on your homeMon 24 Aug 2015

purchasing a fixer-upper During July this year many homeowners would have submitted a tax return and possibly received a lump sum of money back from the South African Revenue Service. Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that getting a tax refund is an ideal opportunity for homeowners to invest in their home and make some changes that could add value to their property. “There are several ways in which homeowners can use their tax refunds to make home improvements, regardless of the amount of money that they receive. They don’t have to undertake large expensive renovations to see the benefits as there are relatively inexpensive home upgrades that can boost both the look and value of the property,” says Goslett. He provides homeowners with a few ideas to improve their home with their tax refund: Update kitchen fixtures They say that the heart of a home is the kitchen as it is normally a room in the home where the homeowner will spend a lot of their time. Goslett says that in order to upgrade the kitchen there is no need to redo the entire space to give it a fresh new look. Simple changes such as new cabinet handles and knobs or new taps will go a long way to a whole new look and feel. Freshen up the bathroom Again, there is no need for the bathroom to be given a complete overhaul to have it looking fresh. “One or two key changes can make a big difference,” says Goslett. “Try replacing old shower doors or the tiles in the shower, re-finishing the bathtub or replacing the toilet and basin. All of these changes will freshen up the bathroom’s look and add to its aesthetic appeal. Replace the garage door Very often the garage door is the first feature of the home that is seen as soon as a person arrives. Replacing the garage door can upgrade or modernise the entire look of the home, as well as being an excellent investment. Goslett says according to a property cost versus value analysis around 80% of the costs of replacing a garage door are recouped when the home is sold. Garage shelving Another fairly inexpensive addition to the garage is shelving. Aside from being an excellent selling point, the additional storage space will make it far easier to keep the garage neat and tidy. Replace the front door Much like the garage door, the front door to the home is one of the first features that people see when approaching the home. “The front door is what welcomes the homeowner, guests and potential buyers to the home, so it is an important element in the overall first impression,” says Goslett. He notes that the homeowner can expect to recoup more than 90% of the cost of the front door when the property is sold. Along with the front door, the homeowner can also look at upgrading the doorbell and the lighting. Plant a tree A beautiful tree in the garden will enhance the look of the property and the best part is that it is good for the environment. Homeowners who wish to restrict their water usage could opt for other landscaping enhancements instead, such as some stepping stones or water-wise plants for the garden. As a general rule, only indigenous plants and trees should be used as they consume very little water and require minimal maintenance. “For homeowners who are not looking to make home improvements, they can still make use of their tax refund by paying it into their bond. Paying lump sums into the bond will reduce interest charges and will help to cut time off the period on the loan,” Goslett concludes.
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