Welcomed relief as rate remains unchangedThu 22 Sep 2016

Welcomed relief as rate remains unchanged
Consumers throughout the country welcomed the decision made by the South African Reserve Bank to keep the interest rates unchanged, with the repo rate staying at 7% and the prime lending rate at 10.5%. 
“There are approximately18 million credit users in South Africa. Around 50% of those credit users have an impaired credit rating due to high levels of debt. An increase in the interest rate would only place further financial pressure on consumers who are already strapped for cash,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. “Hopefully the Reserve Bank’s hiking cycle has come to an end for the time being and consumers can use this window to sort out their financial affairs.”
Over the last few years the prime lending rate has increased by 2%, which has had a marked impact on homeowners and prospective buyers seeking to get into the door. A homeowner, who purchased a property for R1 million at the end of 2014 with a bond linked to prime, will currently be paying R1 306 more for their home.  According to household and property sector strategist at FNB, John Loos, from the end of 2013 up until June this year, the cumulative increase in the bond instalment on the average priced home has increased by 42.1%.  
According to Goslett, the Monetary Policy Committee’s decision to keep the rates unchanged is the right decision for both the property market and the greater economy. “An interest rate hike would only dampen consumer sentiment and further slowdown the property market.  This year has been tough for consumers who have already had to absorb two interest rate hikes, along with an increased cost of living. While the housing market still reflects an ongoing demand, the effects of the slower economy and higher financial demands on consumers has been felt in the property sector,” says Goslett. 
He notes that affordability will continue to be a driving force behind the property market and a rate hike would negatively impact that.  “Consumers who are able to reduce their household debt-to-income levels have an increased chance of showing the necessary affordability levels to purchase a home. While it may be difficult to adjust to a more restrictive financial plan at first, it will bring them a step closer to owning a home,” Goslett concludes.
 
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Buy or build?Tue 20 Sep 2016

Buy or build?
The idea of having a home built to their exact specifications is an exciting notion for many prospective homeowners. “However,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, “although building a home does have numerous benefits, there are also several vital aspects that should be considered before the project is started such as cost, time and personal preference.”
Goslett says that perhaps one of the biggest reasons that certain owners opt to build their own home is the fact that they can customise it to suit their individual preferences. He adds that a new home is also more energy efficient, especially with more energy-saving elements being introduced to the market in recent years. Opting for a new home can also be a health benefit, as purchasing an older home the owner runs the risk of being exposed to certain toxic materials, such as asbestos, lead paint and mould. 
Despite the perks, there is also a downside to building a home, such as the fact that often the estimated costs are rarely accurate and the project can cost substantially more than initially expected. There is also the task of finding the right contractor for the job. According to Goslett one of the first aspects that need to be considered and researched thoroughly is the competency of the builder. “The success of a building project will largely be based on how competent the contractor is to complete the endeavour in a professional manner and within the allotted time period.  Regardless of whether it is building a home from the ground up or merely taking on a renovation project – using the right contractor is essential,” Goslett advises. “Perhaps the riskiest part of building a home is the construction, which is why it is so important to scrutinise the builder’s credentials and track record.  Below standard workmanship will cause issues down the road and will be costly to rectify at a later stage – not to mention the fact that the home will be unsafe for its occupants.”
Goslett says that if an owner has decided to build their home, they should ensure that the builder they chose to work with is certified with the National Home Builders Registration Council (NHBRC).  “The aim of the NHBRC is to reduce the risk of subpar workmanship as much as possible and ensure that only qualified and experienced contractors are used to build homes. For their own protection homeowners should only use building contractors who are affiliated to the organisation. To a large degree this will ensure that the standard of workmanship is up to standard and provide some protection against defects occurring from substandard building,” says Goslett. “In the instance where the build has been financed, the bank will insist that the builder is a registered member of the NHBRC before releasing the necessary money.”
Timing is another aspect that requires careful consideration. If the property has not been completed within the expected time frame, it can have some harsh financial implications. “During the time that the home is being built, the owner will require accommodation until the property is habitable. Either the owner needs to stay with friends or family, which is cost effective but sometimes inconvenient, or the owner will have to incur the additional cost of renting a home while they wait - bearing in mind that the owner will also be paying for the land and building costs of their new property. A delay in the project can cause a financial setback if the owner is not prepared, as they will be liable for the additional expenses over a longer time period than what they originally anticipated,” Goslett explains.
He notes that if a bank is financing a building project, the owner is required to provide several documents such as the building plans, which should include a schedule of finishes to determine the property’s market-related value once it is complete. Goslett says that these documents will be used to determine the size of the loan granted within the parameters of the bank’s credit policy. “Irrespective of whether buyers decide to purchase an existing home or build one, in most cases they will be required to have a deposit. However, due to the higher risk involved with building a home, the deposit required in order to finance the build of a home will be higher,” says Goslett.
Along with the risk involved in building, there is also the chance that the cost of the project will be greater than what the buyer would pay if they had to purchase an existing property with similar features. Numerous factors can have an influence on the cost of the project and need to be taken into account before any decision is made. However, despite the risk and possible complexities of building a home, many owners would still prefer to have the creative freedom to design their own home, even if the financial cost is higher. 
Both building a home and buying an existing home have their pros and cons. The answer to what would be a better option will be based on the owner’s personal preference, individual requirements and financial situation. “Regardless of the option that the owner chooses, property should always be viewed as a long term investment and the necessary research should be done in order to make an informed decision,” Goslett concludes.
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How to keep track of your property optionsFri 16 Sep 2016

How to keep track of your property options
Finding the right home may sound like an easy process, but many buyers don’t realise that it can take more time and effort than they initially expected – especially if it’s not handled in the correct manner. Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that fortunately for buyers there are methods that can ease the stress of finding the ideal home that meets their criteria.  
“With the sheer volume and wide variety of properties available on the market, perhaps the largest challenge that buyers face is deciding where to start. Statistically only a small percentage of buyers will purchase the first home that they view, and viewing a great number of random show homes will only create confusion and make the decision more difficult,” says Goslett. “Not having a clear plan of action and looking at numerous show houses in a short space of time will make it difficult to keep track of what each home has to offer, what you liked about each property and what it is selling for. Preparing beforehand by creating a concise plan will simplify the process and ultimately make the home buying decision far easier.”
Irrespective of how urgently you need to find a home, the decision should never be rushed. Rather than trying to get through as many properties as possible in the shortest amount of time, it is best to take your time and work methodically, viewing small numbers of properties at a time. “By working through only a few properties at a time you will be able to retain as much information about each home as possible. Buyers who are looking for a property urgently may be inclined to want to speed the process up by using multiple agents and cramming in as many show homes as possible in one day. However, while this may give you a broad view of the homes available on the market, it will make it next to impossible to keep track of which homes appeal to you the most, who showed you the home and why it was so appealing in the first instance,” says Goslett.
According to Goslett it is advisable to use only one real estate professional who has extensive knowledge of the area you are interested in and you are comfortable with. He adds that ideally prospective buyers should view no more than four homes on any given day. “A good, reputable agent will have a wide variety of listings on their books, but will be able to narrow down the search and viewings based on the information and criteria that you provide to them. Doing this will save massive amounts of time that would have been spent on viewing properties that don’t fit into your criteria,” says Goslett. 
He provides a few ways that can be used to keep tabs on the various properties that have been viewed in order to compare them. These include:
Take down notes on each and every property that is viewed. This can be done using a smartphone, tablet or the more traditional pen and notebook. Make a list of the pros and cons of each property, incorporating likes and dislikes and stand-out features. 
Document each home by taking photos - this can be done with the camera on your cell phone. Take photos of the interior and exterior of the home focusing on aspects that are particularly important to you.
Only keep records of properties that you are really interested in.
If in doubt about anything, talk to the agent who showed you the property. They will have a record of the homes that they have showed you and will have a list of each property’s features. Agents will know their listings and will be able to provide guidance through the often complex process of finding the right house.
“Buying a home can be both exciting and stressful. However, adopting a calm and logical approach and working through the process systematically will reduce the stress and allow you to fully enjoy the experience,” Goslett concludes.
 
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Inexpensive home updates that pack a punchTue 13 Sep 2016

Inexpensive home updates that pack a punch
In the current competitive real estate market sellers need all the help they can get to make their home shine and stand out from the crowd; however this doesn’t mean that they need to break the bank with expensive updates. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, there are a number of cost-effective ways that sellers can make their home more appealing and increase their chances of selling for the best possible price in the shortest possible time frame.   
“Sellers don’t always have to go to extreme measures to create a big impact. Often just subtle, reasonably inexpensive updates can go a long way to increasing the property’s appeal and give the seller the competitive edge. The updates will add to the seller’s confidence when putting their home on the market, with the added benefit of possibly pushing up the sale price,” says Goslett.
He provides some low-cost updates the sellers could do before listing their home:  
Do a walk-through
The initial step is to visit each room and make a checklist of items that need to be either repaired or replaced. During this part of the process it is best to be as objective as possible, so it might be helpful to have a friend or family member provide a second opinion. Look for outdated styles, bold patterns and colours, dated fixtures, unfinished projects and over-cluttered cupboards and countertops. When looking at these features consider what elements showcase the home in its best possible light and what doesn’t. Once the checklist has been established, the next step is to develop a budget and diarise a date on the calendar to complete the tasks at hand. 
Incorporate contemporary styles 
Each home and style will be as individual as the owner. While you may love a certain look, be it ultramodern, the majority of buyers may not. Ideally it is best incorporating modern elements into the home, but going for a transitional style that hits the sweet spot between traditional elegance and contemporary cool. The idea is to tick the ‘just right’ box – not too cold or formal and not too fussy. A transitional style blends the comfort and warmth of traditional design with the clean lines and muted tones of the modern look. 
First impressions count
According to research it takes just 15 seconds for a buyer to decide whether they like a house or not. First impressions count, so ensure it leaves the right mark. An impression of the home is not only formed by what buyers see inside the home, but starts from outside the property walls. Buyers driving past will judge whether they want to have a look at the property by the way it looks from the street. Curb-appeal is vitally important and vastly contributes to the success of attracting buyers to the home. Start maintenance from the pavement outside the property and work your way inwards. Basic improvements such as exterior painting, cutting the grass and planting some flowers can tremendously improve the look of a home from the outside. Special attention should also be given to the driveway, ensuring that it is weeded and in good repair.
Pay attention the kitchen and bathrooms 
As some of the most frequently used areas in any home, the kitchen and bathrooms will be a focal point for buyers. Extra effort should be made to ensure that these areas are fresh and looking great. Things such as stained shower stalls and toilets, broken or missing grout, leaky taps or dated cabinet hardware are easily replaced at minimum cost. If replacement is not an option, have shower stalls or bathtubs professionally resprayed for a fresh look. 
A new coat
A fresh coat of paint is a great way to revitalise the home with a reasonably minimal investment, especially if you have the skills to do the job yourself. Paint can drastically transform a space and can be used in a variety of applications on walls, doors, cabinets, fixtures and even tiles. When selecting a colour palette, neutral muted tones will be the most universally pleasing. 
“By making these small updates before listing a property, sellers are giving themselves the best possible chance of setting their home apart and achieving their asking price. While these updates may not cost a lot, they will have a big impact on the overall appeal of the property in the eyes of buyers,” Goslett concludes.
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What goes and what stays?Mon 12 Sep 2016

What goes and what stays?
An often contentious issue, the definition of what is regarded as a fixture in the home has caused many a dispute between buyers and sellers during the property sales process. Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that to avoid disagreements it is imperative that the sales agreement between the two parties is clear regarding what stays in the home and what will be removed by the seller when they vacate the premises. 
“It is not out of the ordinary for a homeowner to install an item that they intend taking with them if they sell the property. Even if the item would traditionally be regarded as a fixture, the seller is within their right to take the item, as long as the buyer is aware of the fact and it has been agreed upon in the sales agreement,” Goslett explains. “It is vital that the sales agreement is as detailed as possible and addresses all aspect related to the sale – nothing should be left to interpretation.”
He adds that arguments and issues happen when the agreement is vague and does not specifically list the items that are included in the sale of the property. “As preparation for selling their home, sellers should compile a list itemising exactly what is to be sold with the house and what will be removed. This 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,” says Goslett.  “An alternative is for sellers to remove the items from the home before it is listed, to avoid any confusion.” 
As a general rule when the buyer purchases a home, they will 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, along with fixtures and fittings of a permanent nature. 
Goslett points out that there are three aspects to consider when defining whether a fixture or fitting is of permanent nature:
1. The intended purpose or nature of the item when it was attached. Was the item attached to the land or a structure erected on the land and was the intention to serve the land on a permanent nature?
2. The manner in which the item was attached plays a part. Is the item attached to the degree that removing it would cause damage to the structure or land that it is attached to? 
3. 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. 
“If an item has been bolted down, cemented to the ground, sown or planted and has taken root it is generally regarded as permanent. An ambiguous area that often causes disputes is around structures such as sheds, pergolas or other similar structures. Issues also arise around items that are not fixed but are used in conjunction with a fixture such as pool cleaners, garage door remotes and batteries for solar power systems,” says Goslett.
He adds that a basic clause regarding the fixtures and fittings should be included in the agreement of sale to avoid disputes down the line. 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.
“Ideally the clause needs to be as specific as possible to the transaction to ensure that nothing can be misconstrued.  While it may seem like a tedious exercise, including the relevant details will assist in avoiding conflict,” says Goslett. He adds that there could potentially 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. 
“It is vital that during the sales process there is an open channel of communication and sellers intentions are made clear to buyers from the start. Communicating and being up front will ensure that conflict is avoided by both parties,” Goslett concludes.
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Are 30 year bonds worthwhile?Fri 09 Sep 2016

Are 30 year bonds worthwhile?
In an effort to lower their monthly bond repayment many prospective buyers might be looking at financing their bond over a period of 30 years. However, before they do so, it is best for potential buyers to carefully consider the financial impact of the additional interest charged over the longer term loan period. This is according to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who recommends the more traditional 20 year bond to avoid unnecessary interest payments.
“Many would-be homeowners may look at a 30 year bond as an attractive option because the lower monthly repayment makes it seem more affordable from the onset. However, while the buyer will pay around 8.3% less on their bond each month, over a period of 30 years they will end up paying 64% more interest than they would on a 20 year bond term,” advises Goslett. “The savings on the monthly bond repayment is not enough to justify paying the massive amount of additional interest.”
He adds that home prices have seen an upward trajectory over the past few decades, while salaries have not followed suit. Getting into the property market has become more difficult for younger generations, which is why many buyers tend to choose a longer-term bond option. Affordability is an issue for many South Africans who are forced to find ways to cut down on repayments to get by; however it comes at a cost over the long term. 
If a buyer purchases a home for R1 million at prime, which is currently 10.5%, on a 20 year bond term, their repayments will be R9 984. If the buyer makes no additional payments into their bond account and pays the minimum instalment over the 240 month term, they will pay back a total of R2 396 112, of which R1 396 112 is interest. 
If the buyer purchased the same property over a 30 year bond term, their monthly bond repayment would be R9 147. Again, if they made no other payments other than the monthly instalments, they would paid back a total of R3 293 061. In this instance the interest paid is over the term of the loan is R896 949 more. 
“If the money saved on the monthly repayment is used to pay off other short-term debt or is spent on an interest-bearing investment with a higher return than the additional interest paid on the longer bond term, it might be a worthwhile endeavour. However, if the money is spent on consumables each month, the buyer will be in a far worse financial position in the long run,” says Goslett. “Prospective buyers might be convinced to opt for a 30 year bond due to the perceived short-term gain, but the accumulative effect of the additional 10 year period should be carefully considered before any final decision is taken. It is imperative that the pros and cons are carefully weighed up and an informed decision is made.”
According to Goslett, if a buyer has purchased their home with a 30 year bond and their financial situation has changed, if they can afford to pay more into their bond they should. This will reduce the term of the loan and overall interest paid.  “Regardless of the term of the loan, interest is only charged on the outstanding balance of the bond. Therefore if the buyer pays more than they are contractually required to, they will bring down the total amount of interest payable, simultaneously cutting time off the loan period,” Goslett explains.
He concludes by saying that there are very few situations where a longer-term loan would be financially beneficial. Therefore before buyers are enticed by a lower monthly repayment, they need to consider their long-term finance position.
 
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Buy a starter home or your forever home?Thu 08 Sep 2016

Buy a starter home or your forever home?
As more and more properties enter the market and inventory grows, first-time buyers have more options available to them than they did in last few years. With market conditions tipping in buyers favour, it may have many asking whether they should purchase a starter home now or wait until they can afford to buy their forever home.
According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, the definition of what constitutes a starter home will differ from one person to the next. “When some people think about a starter home they may have a fixer-upper in mind, however this is not necessarily the case. One person’s starter home might be exactly what another person is looking for in a forever home. Generally speaking a starter home is a property that will suit your needs for approximately the next five years or until your circumstances change, whereas a forever home is a property that you can see yourself living in indefinitely or at least for the next 20 to 30 years. It is the home that meets all the criteria of your dream home - the right location, the right size and all the features you would ever want or need,” says Goslett.
Essentially the decision to buy a starter home now or wait will be determined by a number of aspects, such as affordability and buyers individual needs. While all buyers would rather opt to purchase their dream home straight away, the large majority of first-time buyers are not in a financial position to do so. Home prices and debt levels have continued to rise over the years, while salaries have barely budged. A few decades ago one income purchased a respectable home, however in today’s market two professional incomes still may not be enough to comfortably afford a home in some of the more expensive areas. 
Another factor is that there are advantages of starting out with a more manageable property and upgrading at a later stage, such as being able to build up equity. “Once a buyer is in the property market it is generally easier for them to build from there, as they have an appreciating asset that they can sell to help them upgrade. They also have the option of keeping their starter home as an investment property and renting it out to get a passive income,” says Goslett.
He adds that while purchasing property should be viewed as a long-term decision, there might be features that buyers want but don’t necessarily need at the moment, such as an extra bedroom or large garden. It would make sense to rather save money and compromise on unnecessary features that can severely impact the price of a home. The lower bond repayment and less expensive upkeep will allow the buyer to save money for their future forever home.
Goslett notes that many first-time buyers are young couples and executives who are in the early stages of their careers, so buying a starter home may give them a chance to build up their income and affordability ratios to be able to afford a higher bond repayment and bigger property when their current home no longer meets their requirements. “Living in a starter home will also give the buyer a chance to assess what features they want in their dream home and what they don’t, as well as get a handle on the different responsibilities and expenses that accompany homeownership,” he says.
If buyers decide to wait for their forever home, ideally they should rent a property that is reasonably-priced so that they can build up as much savings as possible to put down a sizeable deposit. The larger deposit they are able to put down the better, as this will reduce the monthly bond repayment. According to Goslett an advantage of waiting is avoiding the chance of being stuck with a property in a bad time to sell and being unable to move up. A disadvantage of waiting is home prices will continue to increase, so something that is not affordable now might be potentially less affordable in the future. “Buyers will be hoping to earn more in the next few years, plus they will have some savings, but they aren’t making more land. The population continues to grow, while the available property and land remains the same. Consistent demand for property will always result in property prices following an upward trajectory over time,” says Goslett. “Even though real estate is cyclical and will have its ups and down, it will be harder to purchase your dream home without first getting into the market.”
Goslett offers some advice to first-time buyers who want to fast-track their forever home purchase:
Start where you can and build up
The first property bought may not be your dream home, but it’s a foot in the door.
Have extra money saved for expenses
Buyers should have around 5% of the value of the home saved for other expenses, such as maintenance or renovations.
Pay more to reduce the bond term 
An additional payment of just R300 on the monthly bond repayment, can reduce a 20 year bond of R500 000 by almost four years. This will also reduce the amount of interest paid over the term of the bond. 
Prepare for the unexpected 
Prepare financially for possible future scenarios such as an interest rate increase or any other scenario that could financially threaten future plans. 
“Buyers can still enjoy the benefits of owning their own home and having their foot in the door without over-committing themselves financially and compromising their financial well-being in the future,” Goslett concludes.
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What you want isn't always what you needWed 07 Sep 2016

What you want isn't always what you need
It can be an exciting endeavour to shop for one of your largest investments – a home. However, before getting carried away with a list of dream features, it is best to define what it is that you want in a home versus what it is that you actually need. Often things that were once seen as a must-have aren’t that important when lifestyles and circumstances change.
“When it comes to finding the right home, it is best to sit down and think about what it is that you really need – and not just what you want. After some contemplation you may find that the ideal home for you and your family is not what you initially thought it would be,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. “Buyers may want a large home with a garden and room for entertaining, only to find that their lifestyle and busy schedules don’t allow for it and a low-maintenance, lock-up-and-go property would suit them better. Carefully considering your lifestyle with help you to create a list of what is truly needed.”
Buyers should ask themselves, what do I need from my home? Goslett says that the keyword to remember is ‘need’. “When it comes to making a major financial commitment such as purchasing a home, or for that matter any life-changing decisions – a need should always trump a want. The challenge is separating and truly determining the difference between a need and want,” says Goslett.
He provides a few considerations to help buyers determine whether they are looking for a property with the right mind-set:
Create a list
A great way to organise one’s thoughts is to put pen to paper. Create a list with two columns – one for wants and the other for needs. The needs column should include elements such as location, school zones, neighbourhood, budget, number of bedrooms, features and amenities, plumbing and electrical that are updated, stand size, number of garage spaces, Home Owner’s Association and Body Corporate details where applicable. The wants column is for the aspects that are regarded as nonessentials such as the specific style of the home, renovated kitchen or bathrooms, deck, swimming pool, hot tub, flooring material, fireplace or wood stove, window material and landscaping.
Discuss the matter with other family members
If the home is being purchased for more than just one person, it is best to consult with those who will be living there to further define what they regard as needs and wants. Certain aspects will be more important to certain family members. For example a larger kitchen might be a priority for the lady of the home, while the children may need extra cupboard space for their hobbies or interests. Discussing the matter with all family members is a helpful way to determining wants and needs. It is important to consider how you and your family want to live in the home, as studies have shown that the size and layout of the home can have an impact on the relationship between its occupants. 
Consider your future plans
A major consideration is how long you plan to stay in the property. This aspect in itself can have a massive impact on your needs and wants. If you are planning on staying in the home for five years or longer you should think about possible upcoming life changes.  These could include having a baby or accommodating an aging parent. While the home may not currently have an extra bedroom, could it be added onto to meet your future needs?
Be prepared to compromise
Searching for a new home and going through the buying process can be exhausting. However, being realistic will ease your mind and reduce stress. Life often indoctrinates people by telling them they need certain aspects to be happy. It is best to take a step back and ask what truly makes you happy. The answer to that question will be unique to everyone - if a large garden will make you and your family happy, then make that a need. However, be prepared to compromise on other wants if necessary. Spend time defining your lifestyle and what you could forgo in order to be happy in your home. 
“Determining the difference between a want and need will make the decision aspect of the home buying process far easier. While buying a dream home is a good aspiration to have, it is more important to buy the right home,” Goslett concludes.
 
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Property pricing is crucialTue 06 Sep 2016

Property pricing is crucial
A detrimental mistake that many sellers make when listing their property on the market is inflating the asking price. This is according to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who says that sellers often ask for a higher amount in order to give themselves a cushion during the negotiation process. 
“A seller may have a certain amount that they would like to get out of the sale of the property. Anticipating that prospective buyers will put in lower offers than the initial asking price, sellers often inflate the price of the home to counter this and still get out what they hoped for.  However, the problem is that if a property is overpriced, it will have limited appeal among buyers. Buyers won’t take the time to view a property that they deem to be overpriced and would rather look at homes priced at what they deem to be reasonable market value. An inflated asking price will only make correctly-priced homes look more appealing,” says Goslett. 
Emotional attachment is another reason many sellers over evaluate their property.  Homeowners who have lived in their home for many years and have put a lot of time, money and effort into making it their own, will feel that it may be worth more than the market dictates. “Emotions are often what leads sellers to see their home has having more value than other properties in their area, however, buyers won’t have the same perception of the property,” says Goslett.
He notes that while price is not the only factor that buyers consider, homes that are priced correctly at fair market value will appeal to a larger target market and won’t be on the market for very long. When buyers are comparing properties that are in the same area and offer similar features, price becomes the number one factor that will influence their decision making process. 
With the number of properties available on the market showing signs of growth, sellers that over price their homes are taking themselves out of the game in the current competitive environment. Goslett says that homes that sit on the market for long periods of time generally lose their appeal and sellers are eventually forced to lower their prices anyway. In many cases sellers are eventually selling their homes for a lot less than what they would have received if the home was priced correctly at the start. 
According to data, homes that are priced at fair market value are generally sold within the first 42 days being listed. Homes that are on the market for around five to 12 weeks sold for 3% less than the asking price, 13 to 24 weeks for 6% less and houses that were on the market for 24 weeks or more sold for more than 10% less.
The question is, how does the seller know that their asking price is market related? Goslett says that a real estate professional will be able to guide the seller through the process of correctly pricing their home. “An estate agent will be able to provide the homeowner with a   comparative market analysis (CMA), which will give them an accurate indication of what other homes are selling for in that specific neighbourhood. Factors that should be included in a CMA are the average price per square metre in the area, recent sales prices of similar homes and comparative prices of other properties that are still on the market. This information will help establish a reasonable price bracket for the property,” he advises.  
Working within the correct price bracket for the property, an agent will then be able to determine what features or unique qualities could set the home apart from others in the area to give a more accurate gauge of the its value.
“Market conditions will have a massive influence on the estimated value of the home. Sellers will need to adjust their thinking to relate to the current market.  Currently conditions are tipping in buyers’ favour as they are spoilt for choice when it comes to well-priced investment opportunities.  Sellers will need to ensure that their property is priced accordingly or run the risk of watching the market from the side-lines,” Goslett concludes.
 
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Tenant selection is imperative to rental successFri 02 Sep 2016

Tenant selection is imperative to rental success
Purchasing an investment property and renting it out can be a mutually beneficial arrangement for both the landlord and tenant, provided the owner of the property adheres to a few key principles from the start when selecting a suitable tenant. 
This is according to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who says that due to South African legislation, selecting the right tenant can be a rather complex process. However, there are several methods that landlords can use to ensure that they are protected from the risk of delinquent tenants and choose the best possible tenant to occupy their property. 
“The initial step that landlords should take before they advertise the rental property is determining the conditions of the rental agreement. Landlords should be specific about what they want with regards to the conditions within the agreement, dealing with issues such as pets and whether or not the tenant is a smoker. It is essential for the landlords to stipulate in their advertisement that each tenant will be vetted before any rental agreement is entered into. This will have a significant impact on the number of potential tenants who decide to view the property, narrowing the selection down to only those who meet the landlord’s criteria,” says Goslett.
He adds that landlords can narrow down the selection further by requesting that each potential tenant fills out a detailed application form when applying. “The application form should request the tenant’s personal information such as their employment details and contactable references. Tenants can also be asked to provide supporting documents which would include a copy of their identity document and a salary slip to verify employment and affordability,” advises Goslett.
According to Goslett, once the landlord has received an application form with the attached supporting documents, they will be able to proceed with a credit check and criminal record check. During this stage of the vetting process the references provided by the tenant should be contacted and verified.
“Once the vetting process has been complete and a suitable tenant has been selected, it is imperative that a comprehensive and legally-sound lease agreement is drawn up, which stipulates all necessary conditions in detail. The terms of the agreement must be agreed upon and signed by both parties. To avoid any confusion or uncertainty regarding each party’s obligations, the lease agreement should be as detailed as possible. The agreement should include a pre-occupation inspection report to be concluded with the tenant present, along with details regarding aspects such as the deposit, rental amount, maintenance and upkeep. Time frames should be allocated to the required clauses as well as penalties, should any condition be breached,” advises Goslett.
Even though a lease agreement has been signed, the property still remains the landlord’s responsibility. Goslett says that if at any stage of the tenancy, a utility bill is not paid; the landlord will ultimately be required to settle the outstanding balance. Ideally landlords should be aware of what is happening with their property and ensure that all accounts are paid and up-to-date. He adds that certain measures can be taken to minimise the risk posed by a defaulting tenant, such as prepaid electricity and water meters, for example. If this is not an option, a deposit for these accounts can be agreed upon beforehand.
While landlords need to be respectful of the tenant’s rights and their privacy, it is advisable that home inspections are conducted on a regular basis. The inspections must be at the tenant’s convenience, ensuring that any issues or breaches in the contract are dealt with as soon as possible. “If problems are left, they will cost a lot more to rectify further down the line. For example, if a late or non-payment is not addressed immediately, within a short space of time the tenant could be a few months behind and incurring further utility costs. Aside from the escalating costs, legal action may need to be taken in order to get the tenant removed from the property, which will also be a costly and time-consuming exercise,” says Goslett.
He advises that a professional rental agent is a good option for landlords who don’t have the time to manage their rental portfolio. For a percentage of the rental income, an experienced, reputable rental management agent will have the expertise and resources to ensure that the property is managed in the correct manner. “A professional management agent will assist the landlord with tenant selection, reference and credit checks along with the day-to-day management of the property. They will also be up-to-date with the latest legal and regulatory developments to protect landlords and tenants. Rental agents will have procedures and systems in place to professionally avoid any potential problems and deal with any disputes that may arise. If necessary, they will also have access to the legal resources and experience to deal with any situation efficiently,” says Goslett.
If a property rental is handled in the correct way from the start, with ongoing professional management, many unnecessary and unpleasant situations can be avoided. Goslett concludes by saying that taking the right measures from day one can be the difference between a landlord in trouble and one whose buy-to-let portfolio is producing a regular income and growing in capital value.
 
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Tips for a stress-free moveThu 01 Sep 2016

Tips for a stress-free move
It doesn’t matter whether it is across the road or across the country, moving from one home to another can be a stressful experience, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.  He adds that most people will move to a new home at some stage in their lives. “While moving will be a relatively easy process for some people, with few or no issues, for the others the experience could be enough for them never to want to move again,” says Goslett. 
He notes that the difference between a smooth moving experience and a difficult one is normally preparation. Goslett provides a few tips that people can use to make their move as organised and hassle-free as possible. 
Keep a record 
The majority of moving company will require an inventory of household items before they will be able to provide a quote for their services, so homeowners will need to compile a list of all their possessions. According to Goslett moving companies require an inventory of goods in order for them to determine the amount of space required for the move. He adds that making lists while packing is also a great way to keep track of what is in each box. “Having a list with the number of boxes and contents of each box will make it far easier to determine whether items or boxes are missing,” says Goslett. “The more specific a homeowner is with their inventory and box labels, the easier it will be for them to find certain items when unpacking. For example using labels on boxes such as winter jackets is better than just labelling the box as clothes.”
Assign an area in the home for packing
Having all the necessary items such as a marker pen and box tape in a central allocated area will make the packing process easier and will alleviate the frustration of constantly looking for these items. Everyone in the home who is helping pack will know to find anything related to the pack at the allocated packing station. Items to be keep at the packing station should include all lists, scissors, labels, bubble wrap and packing paper. Goslett says that homeowners should take care when wrapping items in printed newspaper as it could strain the item with ink.
Rather more than less 
It is better to have too many supplies and boxes than not enough, as running out of these items will cause a delay in the packing process. “Generally homeowners require more boxes than they initially think. If the boxes have been supplied to the homeowner by their moving company, they will normally be able to get a refund for any unused boxes provided they are in a good condition. If a homeowner gets the boxes for free from a supermarket, it is simply a matter of taking the leftover boxes to a recycling bin or passing them onto a friend who may be moving in the near future,” says Goslett.  
As a precautionary measure homeowners should have approximately 10 boxes set aside for last minute items that can only be packed on moving day, such as bedding, clothes and cleaning supplies. 
Prioritise the packing order
Items that are used daily or on a regular basis should be packed last, while other items can be packed away and ready to go. Anything that is not essential up until the day of the move should be packed first. This will give the homeowner a good indication as to how much more needs to be packed and less will be left to do as moving day draws closer. “There is no need to keep winter clothes out if the move is happening during the summer months, and duplicate items can be pared down to only the bare essentials,” says Goslett.
Keep similar or matching items together
If a household item is used in conjunction with something else, it is best to keep all of these items together to make it easier to unpack. For example appliances should be packed together with their detachable parts or books together with book ends. Place all screws, bolts or small parts into a re-sealable plastic bag or envelope and tape it to the piece of furniture or corresponding appliance they come from. Goslett says that another effective method is to label each bag or envelope and place them all into one box along with accessories such as remote controls, extension cords and Allen keys. Ensure that this box is marked clearly so that it can be easily found.
Colour code boxes and items
While the homeowner may know which box goes to which room, the movers won’t.  An easy way to resolve this problem is by designating each room in the new home a certain colour and marking each box or item with a sticker of the corresponding colour. For example, all bedroom items will be marked in blue and kitchen items in red. By putting a matching sticker on the door post of each room, movers will know the destination of each item or box. 
Personal and important items
Each member of the family should pack a bag containing all the personal items that they will want immediate access to when arriving at the new home, such as cell phone, toothbrush or pyjamas. According to Goslett it is also advisable to have a bag or box that contains all valuable items and important documents, which can be kept with the homeowner at all times. 
Check your insurance
Goslett says that before the move the homeowner should phone their insurance company and check what is covered by their homeowners’ insurance during the move and if any additional insurance it required from the mover. “Also find out what is required in the instance that items are lost or stolen, as some insurance companies may need receipts, appraisals or photos of valuable items,” advises Goslett.   
He notes that while moving can be a rather daunting exercise, with the right planning and organisation with make it a far less stressful endeavour. “If everything is organised and ready to go, then the process can be an exciting experience that everyone can look forward to,” Goslett concludes.
 
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Maintaining a new homeTue 30 Aug 2016

Maintaining a new home
Buying a home is an incredible milestone to achieve and an exciting time for many first-time buyers. However, there are several new responsibilities that come with the title homeowner, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.  
“Apart from the financial commitment, there are also some other necessary home maintenance responsibilities that need to be addressed on a regular basis,” says Goslett. “Purchasing a home that is in good repair is great, but then it is up to the new owner to ensure that it stays that way. It is always advisable to get into the routine of doing regular maintenance checks, rather than waiting for something to go wrong and having to deal with costly repairs. It is far better to ensure that everything gets the required attention before it turns into a major problem and financial burden. Advanced warning will also allow the homeowner to do some comparative shopping and find the best person for the job, instead of rushing around in an emergency situation.”  
According to Goslett, ideally preventative maintenance inspections should be carried out at least twice a year, although certain areas of the home may require slightly more attention and others less. “Generally the majority of checks and maintenance can be done by the homeowner, however there are certain aspects of the home that may require the services of a professional contractor,” advises Goslett.
He provides new homeowners with some areas in the home that will need to be checked and maintained regularly:
Main electrical panel
The main electrical panel should be checked for signs of water penetration as this could be potentially dangerous. Look for water marks or sections of the panel that show signs of rust. The circuit breaker switches should all be turned off and back on to ensure that they are all working and none have seized. If the panel is warm to the touch or smells of burnt insulation it is advisable to have it inspected by a professional electrician.
Roofs 
Windy, stormy weather can shift or damage roofing tiles, so this is an area of the home that should be checked regularly. Roof tiles that are missing or damaged should be replaced as they could lead to leaks and water damage inside the home. Homes with flat roofs must also be checked, especially for areas that are blistering or have bubbles. Debris should be cleared off the roof and any trees or branches that make contact with the roof should be cut back.
Chimneys 
Another aspect that homeowners should pay attention to while on the roof is the chimney. Make sure that there are no loose or damaged bricks and that the mortar is in good repair. It is also a good idea to check that the waterproofing elements around the base of the chimney are in a suitable condition. The chimney should be professionally swept as least once a year to clear away any built up creosote and other flammable materials inside the chimney flue.  While this will not apply to gas fireplaces, it is important to have them serviced and have a licensed gas technician ensure that everything is operating correctly.
Gutters 
Debris such as foliage and other foreign objects can cause gutters and downpipes to clog, causing the water to overflow into unwanted areas. This could cause water damage and damp inside the ceiling space or within the walls of the home.  In order to avoid this, gutters should be cleaned and checked regularly, ensuring that there are no leaks or holes that may require some repair. It is also advisable to check that the gutters are securely attached to the wall and that they are positioned to drain water away from the house. 
Windows and doors 
Broken or cracked window panes can be a potential safety hazard so it is best to have them replaced.  Old, cracking, sun-damaged window putty should also be reapplied where necessary. Window and door finishes should be checked for any paint deterioration or rot. Ensuring that the windows and doors seal properly will assist in reducing utility costs, as it will be easier to heat or cool down the inside of the home. It is vital to check whether any door frames have shifted over the last six months as this could point to an issue with the foundation or structure of the home.
Walls and ceilings 
The most important aspects to look for when inspecting walls and ceilings are cracks and damp spots. Narrow vertical cracks in walls are often caused by minor settlement or normal shrinkage and should be too much cause for concern. However, if the vertical crack is around 3mm wide or wider, it could be a result of major settlement problems and should be checked and evaluated by an engineer.  
If water marks appear of either the walls or the ceiling it is important that they are monitored. Damp within the wall will cause the paint to bubble and flake, while damp in the ceiling could cause it to sag or in severe causes collapse. Water marks on the ceiling are generally a symptom of a leaking roof. 
Paint 
While most people use paint to change the look and feel of their home, its primary function is to provide the home with a protective layer against the elements. It provides a waterproofing layer to walls, protects metal from rust and wooden fixtures from sun-damage, insects and rot. Painted areas that are bubbling, peeling, cracked or blistered should be inspected, repaired and repainted. 
Patios and decks 
Much like paint, vanish or sealant also acts as a protective layer for wooden features such as decks. Wooden patios and decks need to be sealed properly to avoid warping or water damage. If the deck is sealed correctly, water should bead on the surface, however if the water is absorbed, it is ineffective and the deck will need to be sanded down and resealed. Another concern with wooden elements is insect infestation, so these features should be inspected and fumigated if necessary.
General fixtures 
Once all the major elements have been inspected, check for things such as toilets that run continuously and leaking taps as these elements will eat into utility costs. Ensure that toilets are sealed and secured to the floor and check that the sealant and grouting around all kitchen and bathroom fixtures is in good repair. This will prevent water from leaking in behind tiles, which can cause mould and rot.
“Getting into a routine of regularly taking preventative measures is far better than being caught unaware. Taking good care of a home will help to ensure the safety of those who live there, along with its capital appreciation over the long term,” Goslett concludes.
 
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Create a home maintenance and project fundTue 30 Aug 2016

Create a home maintenance and project fund
There is much more to homeownership than paying a monthly bond repayment, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who points out that maintaining the property, is an intricate element of being a homeowner.
“Becoming a homeowner has a number of advantages such as the potential of owning an asset that will increase in value over the long term. Other benefits include being able to make changes to the home and decide what it looks like without having to consult with somebody else. However, with the advantages comes the responsibility of maintaining the property to ensure that it reaches its full investment potential,” says Goslett. “Affording a property is not just about meeting the monthly bond requirements, but also being in a financial position to be able to put some money away for when the unexpected happens.”
He adds that while the majority of major issues and damages that could occur from a fire, flooding, natural disasters or the like, are covered by home insurance, the general up keep and maintenance of the property is not. “Policies will differ from one insurance company to the next in terms of what damage or disaster they will cover and what they won’t. However, homeowners can be assured that insurance policies won’t cover general home maintenance or damage that is a result of neglect or poor maintenance. The upkeep of the property will be for the homeowner’s own account. For example, a roof that has been damaged by a fire will generally be covered by insurance, whereas an old roof in need of repair won’t. Replacing or repairing a roof could be a huge financial burden if the homeowner has not prepared and set aside money in some kind of a contingency fund,” says Goslett.
According to Goslett it is vital for homeowners to have an emergency fund to avoid incurring additional debt to pay for home maintenance and unforeseen costly repairs. “Ideally homeowners should aim to set aside at least 1% of the value of their home annually to cover maintenance, bearing in mind the value of the property will increase. This translates to an annual savings of around R10 000 per R1 million of the home’s value. In the instance where the money has not been used during the year, it should be kept and added to the next year’s savings to ensure that the homeowner is covered in the event of a major expense,” advises Goslett. 
Although 1% of the home’s value should be the minimum, how much a homeowner can set aside will largely demand on their financial situation, taking into account their income, expenses and savings goal. “Additional factors to consider include the home’s condition and age, as newly built homes will initially require very little maintenance compared to older properties. It is best for homeowners to have a balanced approach to their financial priorities, with consideration given to reducing debt levels, saving to cover expenses in the event of job loss and retirement,” says Goslett.
He adds that each circumstance will be unique, so homeowners will need to work out what kind of savings plan will work in their situation. It is a matter of introspectively assessing their financial position and deciding what amount they can realistically set aside consistently – sustainability is a vital aspect to building savings.  
With factors such as increased food prices, interest rate hikes and inflated utility tariff fees placed financial pressure on households; certain homeowners may only be able to build up their project fund slowly. If this is the case, Goslett says that homeowners should prioritise maintenance projects based on their necessity and push purely cosmetic tasks down the list.
“Although not always possible, in certain instances homeowners could divide large project into more manageable portions so that they won’t have to pay large sums of money all at once and have additional time to build up savings. If need be, rather focus on one room at a time than the entire house all at once,” he adds.
The ideal way to start a savings fund is by setting up an automatic transfer from the homeowner’s cheque account into their savings account.  “Research reveals that consumers are more likely to forget about money that is automatically set aside and their savings fund can start to grow without them even thinking about it. A contingency fund will assist homeowners to maintain and improve their home, never having to worry about being caught unprepared,” Goslett concludes.
 
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Spring clean to sell your homeThu 25 Aug 2016

Spring clean to sell your home
As spring starts and the temperatures begin to heat up, more and more buyers will be venturing out to look for their ideal home, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. He notes that homeowners, who are thinking of placing their property on the market, may want to take of advantage of the fact that there are generally higher volumes of buyer foot traffic during the warmer seasons.
According to Goslett the property market generally sees an uptick in sales as the temperatures rise, making the seasonal change an ideal time for would-be sellers to spring clean their homes and prepare for listing on the market. He adds that there are a number of things that homeowners can do this season to get their homes in show day condition and ensure that the property stands out in the current competitive real estate environment.  
First impressions count – Simply put, when it comes to property appearances matter – so make it count in the right way. If buyers have the choice between two homes in an area that offer similar features and are within the same price bracket, then the determining factor that will distinguish one home from the other will be the look and buyer’s overall first impression of the property. 
“The first impression of a home will be created by the prospective buyers’ sensory perception of the property. It will be based on what they see, hear, smell and feel when they first enter the home. All of these elements will contribute to and influence the overall feel of the home, which will generate an emotional response from buyers. If this experience is positive and results in a favourable impression, it is more likely that the buyer will feel compelled to make an offer,” says Goslett.
Get a trusted second opinion – Homeowners often have an emotional attachment to their home, often making it difficult for them to have an objective view. Because of this, it is advised that they call in a second opinion with regard to what improvements might need to be made to get the home into show day condition. “Rather than avoiding input from others, homeowners should seek out honest opinions that focus on both the home’s good points as well as the bad. If the homeowner is worried about possible conflict with friends or family, a trusted estate agent will give their honest and direct opinion with regards to what should be done to make the home more marketable,” advises Goslett.
Spring clean, means clean – Once the areas of improvement have been identified, it is time to put in the work and clean and make the necessary changes to the home. Apart from washing the scrubbing the home, spring cleaning also entails decluttering and getting rid of unused items. 
“Attention should be paid to every detail in the home, ensuring that even the slightest cracked window pane has been replaced. Although the homeowner may not notice minor defects in and around their property, buyers will specifically be looking for things that are wrong with the home.  It is always important to remember that the home is competing with others in the area, so it is imperative that every effort is made to ensure the home is in its best condition, especially considering that there may be newer homes on the market,” says Goslett.
Allow buyers to picture themselves living there – It is important for sellers to make buyers feel as welcome as possible in the home. Potential buyers need the space to be able to view the home at their own leisure and be able to visualise themselves living in there. “Ways in which homeowners can make buyers feel more at ease is by packing away personal items and photos. This will help the buyers to see themselves in the home and not the current owner. It is also best to decorate or paint the home in neutral, muted colours with only a few well-placed items to add interest and warmth. Sellers can aesthetically enhance the home with a vase of some fresh flowers or potpourri in the bathroom. Home-decor magazines are a great resource for tips,” says Goslett.
Get rid of bad odours – Unpleasant odours can potentially drive prospective buyers away. For this reason it is imperative that homeowners make every effort to ensure that their home smells inviting. Traces of food, pets or smoking and other disagreeable odours can kill deals fast. 
“Ensuring the home is show day ready will be a vital element in setting the property apart from others in the neighbourhood and will give the seller the best possible advantage in a competitive real estate market,” Goslett concludes.
 
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Investing in your outdoor spaceThu 25 Aug 2016

Investing in your outdoor space
Although kitchen and bathroom renovations still top the list as the upgrades that add the most value to a property, a growing number of homeowners are now looking to improve their outdoor living areas, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
“With the warmer months around the corner, many homeowners will once again turn their attention to their outdoor living spaces because of the benefits it provides to their families. In spring and summer, South African families generally spend a great deal of time outdoors. An outdoor home improvement project will assist in maximising the enjoyment of the property’s outdoor spaces and add to the appeal of the home when it comes time to sell,” says Goslett.
He notes that there are several reasons why investing in the outdoor living area of your home could pay off in the long run:
Increased value and buyer appeal
“To a large extent a homeowner will be able to recoup a significant portion of the money they spend on renovating and upgrading their home, as long as they do not overcapitalise and spend above the ceiling price of the neighbourhood,” says Goslett. 
He adds that an outdoor addition such as a deck or swimming pool will increase the value of a property, and depending on the circumstances, between 65% and 90% of the cost could be recouped at sale. “Apart from adding value to the property, an outdoor improvement will also add to the home’s overall buyer appeal, which might be the determining factor that pushes the deal in the seller’s favour. Buyers will like the fact that the home has pleasant outdoor features and spaces.”
Enjoyment and entertaining
Increasing the property’s value is a massive benefit to any home improvement, however this can only be realised if the property is sold. Goslett says that immediate benefit is that once the project is complete, the home’s occupants will be able to use and enjoy the improved outdoor space. An outdoor area designed around a homeowner’s specific needs and preferences can optimise the space and act as an extension of the liveable area of the home.
Space to relax and de-stress 
According to medical research spending time outdoors can help with alleviating stress, as well as improving one’s mood. “A pleasant and accessible outdoor area can bring all the benefits of spending time in nature into the comfort of your own home,” adds Goslett. 
Potentially saving money and water 
Adding functional outdoor features such as a low-maintenance deck or patio will reduce areas of lawn that require watering, which in turn will lower utility costs. Having an outdoor recreational area means that the family is likely to spend more time at home, which will also reduce entertainment costs. 
“The benefits to homeowners of investing in their outdoor living spaces can be reaped in several ways,” says Goslett. “Not only can it add to the home’s value financially, it will also create a space for the whole family to relax and reconnect at the end of a hard day,” he concludes.
 
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Submitting an offerWed 24 Aug 2016

Submitting an offer
Finding the right home is only one step in the process to becoming a homeowner. Once you have narrowed down the search and found the home that meets your criteria, the next step is to put pen to paper and make an offer to purchase. While some may find this a rather overwhelming undertaking, following a few simple guidelines will make it a far less daunting experience, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
“An offer to purchase is essentially an agreement that lays out the terms and conditions of the property transaction between the buyer and seller,” Goslett explains. “All of the terms and conditions will need to be agreed upon by both parties before the contract is signed. It is imperative that everything that each party has agreed to is put down on paper and listed in the offer to purchase document to avoid possible conflict further down the road. Once the document is signed by both parties it is a legal and binding document.”
He notes that as with any contract between parties, an offer to purchase serves to protect the parties involved in the transaction and ensure that nothing is left to interpretation. If there is any ambiguity it could lead to a misunderstanding or conflict, so is best to be avoided. “It is vital that the offer to purchase thoroughly covers all the agreed upon terms, which should include issues such as the date of occupation, occupational rent, fixtures and fittings and the conditions of sale. Once the offer to purchase has been concluded and signed by both parties it will become the deed of sale on that property,” says Goslett.
According to Goslett the offer to purchase should be as detailed and as specific as possible. “It may seem like a tedious endeavour, but making the offer to purchase as detailed as possible will provide protection to both parties. If every detail of the transaction is covered within the document, there will be little or no chance of either party negating on the agreed upon terms at a later stage,” says Goslett. “There are cases where items of furniture or curtains have been specifically made for a uniquely shaped room in the home. In these instances it would make sense for the seller to sell these items with the property and list it in the offer to purchase. If the item is not listed, there is no obligation for the seller to leave it. This is where the details in the document become important.”
Goslett points out that both parties must be in agreement as to what items are included in the sale of the property and what aren’t. As a general rule of thumb any fixtures or fittings that have been attached to the property (nailed, bolted, glued or screwed down) will stay. 
“It is fairly common in today’s market for a buyer to submit an offer to purchase while they currently own another property. It is also common practise for buyers to include a condition which states they are submitted the offer subject to bond approval.  In these situations the offer to purchase will include a suspensive condition that states that the sale is only subject to the buyer’s other property being sold or them receiving the necessary finance,” says Goslett. 
He adds that a suspensive condition will normally include a time limit that will depend on the agreement made between the buyer and seller. Once the suspensive condition has been fulfilled, the buyer should notify the real estate agent without delay so that the offer to purchase can be made unconditional. “This step in the process is vital because the offer to purchase could become null and void and the whole transaction could fall through if the requirements have not been met in a timeous fashion,” advises Goslett.
An essential inclusion in any offer to purchase agreement is the date of occupation, which stipulates the date on which the seller will vacate the property and the buyer will take occupation. Apart from the fact that it will provide both parties with a clear date to work around in terms of moving, it will also determine whether either party may need to pay occupational rent. The buyer will be required to pay occupational rent to the seller if they move in to the property before it is registered in their name. Conversely occupational rent will be paid to the buyer should the seller not be out by the time the transfer of ownership has occurred.  The rental amount should be market-related and can be agreed on by both parties with the help of an agent. The occupational rent amount should be included in the offer to purchase.
“Once the document has been signed by both parties it is contractually binding, so it is imperative that the buyer is fully satisfied before they put pen to paper. Buyers should go through the document thoroughly dotting their proverbial ‘I’s and crossing their ‘T’s. If there is any clause that they need clarification on, they should ask their agent for an explanation or obtain a professional opinion from a lawyer.”
After negotiations have reached their conclusion, the offer to purchase has been signed and the relevant cooling-off period has passed, any deposit made by the buyer will be placed into an interest-bearing trust account until transfer of ownership is complete. The interest on this account will be for the benefit of the buyer.
“An offer to purchase is a vital part of a property transaction and if used correctly, it will make the process of buying a home as easy and transparent as possible, assisting buyers and sellers to avoid any misunderstandings,” Goslett concludes.
 
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How to handle a defaulting tenantTue 16 Aug 2016

How to handle a defaulting tenant
The current challenging economic circumstances have not only had an effect on those wanting to own property, it has also impacted on many tenants and landlords within the residential market, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
“Some landlords may find themselves in the situation where their tenant is no longer able to pay their monthly rent; however landlords cannot simply evict the tenant as they are protected by the Prevention of Illegal Eviction from Unlawful Occupation of Land Act, No. 19 of 1998, also known as the PIE Act,” says Goslett. “Essentially the act applies to the occupation of premises which constitute a dwelling, which in the case of a landlord and tenant relationship would be the residential property in an urban area. The reason that the act was introduced was to ensure that tenants were protected from being unlawfully evicted from the property. However, it is important to note that while the act aims to prevent wrongful eviction, it does not mean that the tenant cannot be evicted, merely that the correct procedure needs to be adhered to during the process.”
Goslett says that it is imperative that any homeowner or investors who wishes to let out a property familiarise themselves with the PIE Act, along with the numerous procedures it advocates for the lawful dealing of a defaulting tenant. “While the act was created with the tenant’s protection in mind, it is not prejudice against landlords, but ensures that the eviction process is followed in the correct manner according to legislation and that tenants are treated with respect,” he explains. 
According to the PIE Act, in order to lawfully evict a tenant, landlords will have to adhere to the following process:
If by failing to pay the agreed rental amount, the tenant has breached the lease agreement, the initial step would be for the landlord to send notice to the tenant informing him of such breach, referring specifically to the breach clause stated in the agreement.  “This emphasises the importance of ensuring that all lease agreements with tenants meet legislative requirements and include the necessary clauses providing them with protection. The more detailed the lease agreement, the better for both parties,” says Goslett.
He advises that the lease agreement will also need to fall in line with the Consumer Protection Act (CPA) in that, regardless of the time period stipulated by the breach clause, the landlord is required by the CPA to give at least a 20 business day notice to the tenant to allow them to rectify the breach before the agreement is cancelled, provided the tenant does not remedy the breach within the given time frame. 
Once the notice period has lapsed without the situation being rectified, the landlord will be faced the decision of proceeding with a summons with an automatic rent interdict or immediate cancellation of the agreement. In certain instances the landlord might be able recover their legal costs for the process, although this is only possible if the lease agreement makes provision for this. “If after the summons the tenant has still not made any attempt to pay the outstanding rental amount, the landlord is within their rights to cancel the lease agreement. If the agreement is cancelled the tenant will no longer fall under its protection and will be regarded an illegal occupier of the property. In terms of the PIE Act, the landlord will then be able to legally evict the tenant,” says Goslett. He notes that provided the lease has been cancelled, the landlord can initiate the summons proceedings for outstanding rent and the eviction proceedings simultaneously.
There are a few aspects the landlords should consider when applying for an illegal occupier to be evicted from their property, such as the fact that the application must be made to either a Magistrate’s court or the High Court. Goslett says that if the application is unopposed; it can take at least eight to ten weeks for the eviction order to be granted. Even if the eviction order is granted on the date of the hearing, it is common practice in South Africa to provide the tenant with at least another 14 days to find other accommodation before the eviction order is executed. After this period the sheriff will be lawfully entitled to proceed with evicting the tenant. Cost is another important consideration that the landlord will need to take into account.  The cost may vary depending on the sheriff’s fees and whether the matter is opposed or not. An unopposed eviction could cost between R12 000 and R20 000 in legal costs plus disbursements, while the cost of an opposed matter will be substantially more. 
“It is essential for landlords to take the necessary precautions from the day the start to ensure they are protected by the law. Seeking the advice of a reputable property management agent or attorney when entering into a lease agreement will ensure that the landlord avoids unnecessary situations with their tenants and enjoys maximum protection,” Goslett concludes.
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The transfer processThu 11 Aug 2016

The transfer process
Transferring the ownership of a property from the seller to the buyer can sometimes be a complicated and misunderstood process, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.  He notes that the process involves a number of parties, many of who have conflicting interests. 
“Regardless of each party’s interest in the process, all have to work together and coordinate their efforts to ensure that the documentation arrives at the Deeds Office simultaneously. Certain parties such as the real estate agent, mortgage lender and bond originator, who have a financial interest in the transaction, often want the process to be concluded in the shortest possible time frame, much like the buyer and sellers themselves,” says Goslett.
He adds that understanding the sequence of events during the transfer procedure will assist buyers and sellers to accurately monitor the process and provide them with an idea of the time remaining at each stage. “On average the process can take around three months, starting from the date of sale and ending with the property being registered in the new owner’s name. That said there are a few external factors that could postpone the process. These could include obtaining clearance certificates or the fulfilment of a stipulated condition in the contract,” says Goslett. 
He provides some of the typical steps required to transfer a residential property:
Step 1
The buyer signs an offer to purchase (OTP). The sale agreement or deed of sale is a binding contract between the buyer and the seller that forms the basis of the transaction.
Step 2 
The buyer or bond originator applies to the bank for finance. A bond application will normally form part of the suspensive conditions, which are events that need to happen before the sale is finalised. Another common suspensive condition is the sale of the buyer’s existing home. 
Step 3
The estate agent will send the sale agreement to the transferring attorney – one of three attorneys that will be appointed during the process. If there is an existing bond over the property, the transferring attorney will then contact the seller’s bank and request the original title deed and cancellation figures, also referred to as discharge costs - this is the figure required to settle the seller’s bond. 
Step 4
The buyer’s bank will then instruct a bond attorney to register a mortgage bond, which is a special loan which uses fixed property as security and is registered in the Deeds Office.
Step 5 
The seller’s bank instructs their attorney, the cancellation attorney, to cancel the seller’s bond. The cancelation attorney then sends the title deed and guarantee requirements to the bond attorney and the transferring attorney.
Step 6
The transferring attorney requested a Rates Clearance Certificate from the local authority. 
According to South African law, a property can only be transferred once all municipal charges and associated costs have been paid in full to the relevant parties. Once this is done, a rates clearance certificate will be issued by the local council. The seller may be required to pay a few months in advance to obtain the certificate, however any credit on the account at the date of transfer will be refunded. At this stage the transferring attorney will also do a Deeds Office search to check all the details of the property.
After this is complete the transferring attorney will assemble and prepare the required documentation, which can take up to three weeks to prepare. 
Step 7
At this stage the buyer will be contacted by the transferring attorney to come in and sign the documents. The buyer will be required to sign a Power of Attorney to Transfer, as well as a number of affidavits to verify their marital status, financial status and identity. Buyers can prepare for this by getting the following documentation in order:
A proof of address (not older than three months)
A certified copy of their identity document 
Their income tax number. 
Declaration in respect of marital and solvency status
Particulars concerning the identity of the attorney transferring the purchaser’s property if the buyer is utilising the proceeds to pay for his purchase
Particulars of the bond granted
These documents will be needed to meet the Financial Intelligence Centre Act (FICA) requirements. Apart from FICA, the transfer process is required to satisfy the necessary criteria of several regulatory institutions such as the Transfer Duty Act and the Value Added Tax Act for the South African Revenue Service (SARS) and the Municipal Property Rates Act.  
Step 8
The buyer pays the transfer costs and their share of the rates and taxes. A proforma account will be presented to the buyer with estimated costs. The buyer will receive a final account after the property has been registered and the actual costs are known. The costs vary because the date of registration is unknown at this stage of the process and a portion of the costs are determined by this date. 
Step 9
The transferring attorney instructs the lodging attorney to lodge the documents with the Deeds Office. The lodging attorney is located near to the Deeds Office and acts on behalf of the transferring attorney, who may not be in the vicinity. The lodging attorney will contact both the cancelling attorney and bond attorney to ensure that all the documents are lodged on the same day. The documents must be registered at the same time because the seller’s bank has guarantees to ensure it will be paid when the bond is cancelled, and they are not prepared to cancel the bond until the new bond is registered.
Step 10
A Deeds Office examiner will carefully check over all the documentation. This will take between seven and ten days working days depending on how busy the Deeds Office is. Once the documents have been examined, the examiner will contact all the attorneys to inform them that they are in order and will be registered the following day. 
Step 11
The documents are registered – the buyer becomes the owner of the property and the seller is paid out the net proceeds. At this stage the estate agent will also be paid their commission.  At this stage the transferring attorney will send the original title deed to the buyer’s bank. In the instance where the buyer does not have a bond, the title deed will be sent directly to the buyer.
“While it can be a complex process, a professional real estate agent will be able to provide guidance to both buyers and sellers. Understanding the transfer sequence and having all the necessary documentation at hand before the start of the process will ensure that everything progresses without incident,” Goslett concludes.
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Buying a property soloWed 10 Aug 2016

Buying a property solo
While married couples still represent a large percentage of first-time buyers in the market, there are a growing number of people who are flying solo and purchasing a property on their own. Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that although the process of buying a home as a sole owner may seem daunting at first, it can actually be an extremely good financial move if done in the correct manner.
Goslett provides a few tips to make the solo house hunt and property investment a success:
Stay within your budget
For most, buying a home will likely be the largest financial purchase they will ever make and it is a great long-term investment. However, before anything else, it is vital to work out an affordable budget and stay within those limits. When deciding what is affordable it is imperative to consider all recurring monthly expenses such as home maintenance and repairs. According to Goslett, another important aspect when budgeting is determining what can be put aside in a contingency fund in case of emergency. “Considering there will only be one person responsible for the bond repayment, there needs to be enough money put away to counter any unexpected circumstances or loss of income,” says Goslett.
An additional factor to consider is that as a solo buyer there is likely to be a smaller budget than a couple who can join their savings and income, therefore solo buyers will need to be smart with their money.  
Be smart and save beforehand
Goslett says that in today’s market most buyers will be required to have a deposit of between 10% and 25% of the purchase price of the property. “It is advisable to have at least a 10% deposit saved up, along with enough money to cover all the other costs associated with buying a home. These costs include transfer duty, attorney fees, home insurance and bond costs,” advises Goslett.  
Choose the right home for you
The buyer’s future plans will largely determine the type of home that will suit them best. “Are you looking for a home with the potential to add-on or merely a small starter home that can be rented out in the future? The answer to these questions will help the buyer narrow down their search and pinpoint the right property to meet their needs,” says Goslett. 
He adds that a sectional title property would mean less maintenance and possibly a lower bond repayment; however there will be the cost of the levies to consider, as well as the rules and regulations of the body corporate. A freehold home would offer the buyer the freedom to do what they want with their home, but it could be less secure and more expensive to maintain.  
Be realistic
The reality is that a buyer purchasing a property on their own may need to compromise on certain aspects and features. “Ideally it is advisable to look at location before the property itself. A property can be renovated or changed, but where it is situated cannot. It is important to research the areas that are within the budget and then work from there. Buying in a better area might mean purchasing a smaller home, however it will be a wiser investment that will see greater returns over the long term,” advises Goslett. 
Determine the reason for the purchase
Is the home to live in or is it purely for investment purposes? This answer to this question will have a huge bearing on the decision-making process. If the home is being purchased as a primary residence, the motives and reasoning behind the decisions that are made will be far more emotionally driven. “If the home is for investment purposes, decisions will be made solely on research and logic, not emotion. The buyer will need to purchase in an area that will attract tenants, which is within proximity to public transport, amenities and schools,” says Goslett.
If needed, ask for help
Purchasing a home solo doesn’t mean that every decision has to be made alone. Family and friends who have purchased a property can act as a soundboard, providing honest and objective feedback.  A reputable, experienced real estate professional can also be a valuable asset, providing guidance and advice through the home buying process. An agent will be able to provide information regarding the suburbs they work in, as well as the best properties to suit both the buyer’s lifestyle and budget. 
“While going it alone can be overwhelming at times, purchasing a home solo should also be an exciting time. It provides the buyer with the opportunity to make their own decisions and choose a home that they really to buy,” Goslett concludes.
 
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Distressed property a reality in today's marketMon 08 Aug 2016

Distressed property a reality in today's market
Challenging economic conditions have led to an increasing number of homeowners finding themselves in financial distress. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, the rising cost of living, interest rate hikes and job losses have taken their toll on the market and have contributed to the growing number of distressed property owners.
“Many homeowners are currently battling with financial strain and are not sure whether they will continue to be able to afford the home that they live in.  A large number of South African homeowners have high debt-to-income ratios and have been struggling to make ends meet. With the ongoing food price increases and tariff hikes, these homeowners are fighting to keep their heads above water,” says Goslett. “If financially distressed homeowners don’t relook at their situation and make the necessary adjustments as soon as they can, they will find themselves in a far more dire predicament.”
According to Goslett the worst thing that a financially distressed homeowner can do is nothing – it is imperative that action be taken without delay. “Unfortunately pride stops many homeowners from admitting that they need help with their current financial situation. Often they also don’t know where to turn and who to ask for help. Ignoring the situation or pretending everything is okay will only make the matter worse. Ideally it is best to act decisively and reach out for assistance as soon as there is a problem,” advises Goslett. 
He provides homeowners with some advice on how to handle this often complicated situation:
Assess your situation
The first step for homeowners who are struggling financially is to take stock of their current situation and determine whether they will be able to continue to bond their bond or not. “If the answer to this question is no, it is best to take action as soon possible. The homeowner should contact their bank and notify them of their current financial circumstances,” advises Goslett. “Many homeowners avoid contacting their bank about their financial strain because they are worried about the house being repossessed, however this is ill advised.  Not contacting the lender and defaulting on the bond repayment will not only result in the homeowner potentially losing their property, it will also lead to a blemished credit record and black listing.” 
He adds that a negative credit record can make even renting a property difficult due to the fact that most landlords do credit checks on their potential tenants. 
Communication is key
It is in both the banks and homeowner’s best interest for the owner of the property to continue living there and paying the bond. For this reason banks will often try and assist homeowners where possible by possibly rescheduling the debt or giving financial advice.  According to Goslett, this can only happen if the bank is aware of the situation at an early enough stage and the homeowner has the means to continue to pay. “Communication between the homeowner and the bank is crucial if the homeowner wants to resolve the situation. In certain instances banks are able to renegotiate the term of the loan from 20 years to 30 years in order to decrease the amount of the monthly bond instalment. Certain financial institutions could be willing to offer the homeowner a payment holiday of between three and six months - this might be all that is needed to provide the homeowner with enough breathing room to get back on their feet,” says Goslett.   
Speak to the professionals
In the instance where the situation has moved beyond the homeowner’s own capabilities, it is advisable that they consult with a professional debt counsellor who can review the homeowner’s circumstances and provide a possible solution or guidance. Once the counsellor has assessed the homeowner’s finances they will be able to submit a repayment proposal to all the relevant creditors. An application will then be made in court to have the proposed repayment plan granted to ensure that legal action cannot be taken against the homeowner and the bank will not be able to repossess the property. “An alternative option is for the homeowner to be placed under administration rather than debt review. In this case the property can be repossessed to mitigate loss,” Goslett explains.
Sell the distressed property
Goslett says that if the homeowner is not in a position to keep their home, it may be prudent to place the home on the market. In this case, it is advisable to contact a real estate agency that has experience in dealing with distressed property sales. The banks do work hand-in-hand with reputable estate agencies to sell distressed properties at market-related prices.
“If a homeowner is in financial distress sometimes selling the property through the distressed property channel is the most effective way to recover. In the case where the homeowner has managed to build up some equity, there might be enough money to cover their outstanding bond, as well as all or some of their other debt. This option could help the homeowner to start with a clean slate and re-establish themselves and their credit record,” says Goslett, who adds that RE/MAX of Southern Africa is the only real estate company in the country that has a dedicated distressed property department.
He concludes by saying that while financial distress is a stressful and complicated situation, homeowners who are in need can make use of certified real estate professionals who have the qualifications to successfully guide them through the sale of their property during these difficult circumstances.
 
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