Things to avoid during the home buying processThu 08 Dec 2016

Things to avoid during the home buying process
While the majority of buyers will require a deposit when applying for a home loan, this is not the only financial consideration that they will need to be taken into account. This is according to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who points out that there are several other aspects that prospective buyers need to keep in mind when preparing to purchase a property.  
“Being prepared and having money set aside for the costs associated with a property purchase is essential, however, there are also things that buyers should avoid doing during the home buying process, as they could impair the buyer’s chances of obtaining the finance they require,” says Goslett. “Ideally, buyers should avoid these financial missteps to ensure they maximise their potential for bond approval.”
Goslett provides buyers with a few financial faux pas to avoid before they engage in the property purchasing process:
Letting your credit score drop:
A low credit score will impact buyers in two ways – it will negatively affect their chances of bond approval, and if approved, it will have a bearing on the interest rate the bank is willing to provide them on the loan. “Aspects that will have an adverse effect on a buyer’s credit score include missed or late payments, so it is essential to keep all credit lines current. Payments must be made on time and every month,” advises Goslett. “Prospective home buyers should avoid applying for any additional accounts or credit cards, as multiple credit enquiries will impair their credit scoring,” he says.
Too much debt:
Where possible buyers should attempt to get rid of existing debt or at the very least reduce it to below 30% of the credit limit. “Debt weighs heavily on a consumer’s credit scoring, so it is highly advisable for potential buyers to pay off any consumer accounts that are due, before applying for a home loan. Having a high debt-to-income ratio affects buyers’ affordability levels, which will have a bearing on the bond amount they will be approval for - if they are approved at all. Disposable cash is a key element to bond approval success,” says Goslett. 
Spending splurges:
Spending big amounts of money on credit before applying for a bond will severely reduce a buyer's chances of getting a bond. Ideally, it is best to avoid making any large credit-driven retail purchases or buying a big-ticket item such as a car, before applying for a bond. 
When it comes to big-ticket items credit is not the only thing to be weary of, as large cash withdrawals will also raise concern with the lender. Substantial cash withdrawals may require an explanation during the bond approval process.
Changing jobs: 
Lenders take the length that an applicant has been at their current job into account when processing a bond application, so it is best to avoid interrupting stable employment during the home-buying process. “Someone who moves from one job to the next within a reasonably short period of time can be seen as a credit risk. Banks generally like borrowers who have a stable employment record with at least six to twelve months or more in the same job with a regular income,” says Goslett. “While it might be unavoidable due to the buyer’s circumstances, it is best to hold out on changing jobs or hold out on buying property.” 
Maxing out your limit:
Just because the bank is prepared to offer a certain bond amount to the buyer, doesn’t mean that they should buy a home for that amount. It is important to keep in mind that there is more to homeownership than just a bond repayment, such as rate and taxes, maintenance costs and possibly levies. Another consideration is possible interest rate hikes during the term of the bond. Goslett says that buyers should try to stick within the price range where they can comfortably manage the total monthly home expenses and have something left over. By looking at homes below their maximum limit, buyers will also be able to compete with other buyers in a multiple-offer situation.
“Buyers who are financially prepared and avoid making any missteps during the home-buying process are well on their way to becoming homeowners,” Goslett concludes.
Read more

Emotions involved in the home buying processTue 06 Dec 2016

Emotions involved in the home buying process
Although most home buyers will have a checklist of must-have items such as the number of bedrooms, bathrooms, the size of the garden or the possible commute to the office, often home buying decisions are driven by emotion and not necessarily the facts.  For many, it all comes down to how they feel when they first walk into their ideal home.
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that buyers should be mindful of purchasing a home purely based on emotion as this could come back to bite them in the long run. “It is natural to have an emotional response during the home buying process, however, it is vital that emotions are not the only reason for buyers making  certain decisions,” he says.
According to Goslett, there are four emotions that buyers are likely to experience as they move through the home buying process. Understanding these emotions and keeping them in check will help buyers to remain level headed and buy the best possible home. 
Exhilaration
Purchasing a new home is a very exciting milestone that many aspire to, so it is only natural that the initial emotion will be one of excitement.  Buyers who are just starting out their home-buying journey will be in the dream phase of the process and will be searching for properties online. It is during these initial stages that buyers will start to figure out what they like and what is available in the current market. 
This is the ideal time for buyers to sit down with an estate agent or bond originator to obtain some advice regarding their budget and affordability. A real estate professional will be able to guide buyers through the steps of purchasing a property, along with what to expect in terms of the costs associated with buying a home, such as attorney fees, transfer costs and bond costs.
Overwhelmed 
For buyers who are new to the process, there is a large amount of information that they will need to ingest during the initial stage of their search. Aside from the many properties that buyers will be looking at, there is also the matter of calculating their finances, and preparing to move to a new home. The large amount of information available and the number of decisions that homebuyers need to consider is overwhelming at times. 
While most people will have an idea of what they are looking for when they start their search, after seeing property after property, it is possible to lose sight of their initial vision. Having a clear defined list will help buyers to stay on track and narrow down their search. There are a few other ways that buyers can keep tabs on the various properties that have been viewed in order to compare them:
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. 
Document each home by taking photos - this can be done with the camera on your cell phone. 
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 shown you and will have a list of each property’s features. 
Anxiety 
Once buyers have decided on a home and are moving forward with the buying process, they are likely to start feeling stressed out. More often than not, buyers will be anxious to get through the process as quickly as possible so that they can move into their new home. During this time is it important for the agent to explain the legal process while providing an estimated time period that each stage of the process will take. 
Satisfaction
Generally, once buyers have made it through the process, they will feel a sense of accomplishment and will be fulfilled. Owning a property can provide buyers with a sense of security, as well as a cornerstone for building wealth, provided the right decisions are made from the start.  
“Understanding the home buying process and the emotions that accompany it will assist buyers to make decisions that are based on the facts and not just their hearts,” Goslett concludes.
 
Read more

Toy and book collection underwayMon 05 Dec 2016

Toy and book collection underway
This month marks the start of the annual RE/MAX Foundation National Toy and Book collection, once again securing its place as a firm fixture on the brand’s calendar. The campaign will run from 1 December 2016 to 31 January 2017, in the hope of building on from the previous year’s success and spreading the festive joy to as many underprivileged children as possible. 
Adrian Goslett, CEO of RE/MAX of Southern Africa and director of the RE/MAX Foundation, says that every year countless numbers of children go without over the festive season, while so many of us take what we have for granted. “As the year comes to an end, it is a great time to reflect, be grateful and give back to those in need. Through the Toy and Book campaign, the RE/MAX Foundation aims to uplift the less fortunate children within the community who may otherwise not receive anything this Christmas. It is vital to us as a brand to have a positive impact in the areas in which we operate and make a difference where is it needed. The goal of the RE/MAX Foundation is helping those who are not always able to help themselves,” says Goslett. 
He adds that when the initiative was first introduced it only ran over the month of December, however, due to the amazing response from the public and wanting to optimise the effectiveness of the campaign, it has now been extended to last for two months. “By running the campaign over a longer period it has enabled us to reach more children and maximise the impact the collection will have on the community.  On 31 January all of the donations that have been collected over the two month period will be handed over to the various charities, crèches and orphanages,” says Goslett.
He notes that while the Foundation is supported by the RE/MAX offices, agents, buyers, sellers and business associates, the success the initiative is largely based on the support of the people in the community who step up to help by providing donations. “Without community involvement a campaign such as this would fall flat, however, over the past few years, the response from the public has been inspiring. We hope that we can continue the success of the previous campaigns and spread joy to far more children.”
RE/MAX Foundation Manager, Sandy Smith, says that all of the RE/MAX offices around the country are encouraged to participate in the drive and will act as drop-off points for the public. “We want it to be as convenient as possible for people to participate in the drive  and help their community. Each RE/MAX office will nominate a charity, crèche or orphanage in their area of operation that will receive all the toys and books to ensure that local community it directly impacted,” says Smith. “We want people to be able to support the communities they live in so that they can see the difference that their contribution has made.”
She adds that those who live in a certain area will have firsthand knowledge of where help is needed and where the donations will have the greatest impact. “This campaign is about giving to something that you have a heart for and making the community a better place in which to live.  A golden thread that runs through the RE/MAX brand ethos is to have a positive impact on the communities in which we operate. The RE/MAX Foundation initiatives have given those within the brand a vehicle through which to do just that,” says Smith. 
The aim of the RE/MAX Foundation is to have an on-going impact on the lives of young people in particular, and empower them to be the best that they can be. Currently, the foundation supports a number of national beneficiaries and over 100 local charities around South Africa through various corporate social investment initiatives. 
“What we do now will have a carry-over effect on generations to come - the RE/MAX Foundation wants to give back to local communities and uplift the next South African generation,” Smith concludes.
 
Read more

Create buyer appeal through home stagingTue 29 Nov 2016

Create buyer appeal through home staging
Although home staging is not new to the real estate market, its popularity among sellers has seen an increase in recent years. According to Adrian Goslett, Regional Director and CEO of RE/MAX, more and more sellers understand the importance of creating buyer appeal in today’s challenging market. He adds that momentum in the property market has shifted towards buyers, so sellers need to optimise their chances of standing out from the crowd. 
“Preparing the home for sale can have a positive impact on prospective buyers’ perceptions of the property and home staging is just one tool that sellers can use to accomplish this. The primary goal for most sellers is to sell their home within the shortest time, for the highest possible price. If sellers want to be able to achieve this, they will need to ensure that their home appeals to the highest number of potential buyers in the market. Often real estate professionals will use home staging as a marketing tool to highlight the home’s prime selling features. At its core, home staging is preparing the home to be listed by using methods that improve the property’s appeal by transforming it into an attractive and welcoming space,” Goslett explains.
In a commercial setting, a prime example of staging would be a retail shop’s display window, which uses props and mannequins to market items that they want to sell. The display allows the passer-by to imagine themselves wearing the clothes or using the items in the window, perhaps enticing them to buy. In similar fashion, home staging is used to showcase the home’s best qualities and entice the potential buyer to see themselves living in that home – it creates aspirations.  
“If cost is not a factor, sellers can have their homes professionally staged by a knowledgeable staging specialist. Depending on the budget, professional staging can include the rental of furniture or artwork, buying paint or wallpaper, as well as products that may be required to fix certain defects such as cracks in the wall or sanding wooden floors,” says Goslett.
If a professional specialist is out of the question, sellers can make simple changes to their home on their own. “There are a number of resources available to sellers, such as websites, television shows, and magazines, to name a few,” adds Goslett. “The home must be clean, inviting and exciting for potential buyers to view. The object is for buyers to not only want the home but want it more than any other homes for sale in the neighbourhood.”
According to Goslett, one of the first steps that sellers should take when preparing their home is to declutter and pack away items that are not necessary. “Buyers should be able to focus on the home and what it has to offer, rather than the items inside of it. Rooms that are cluttered with items will feel smaller and overcrowded. Removing unnecessary items and furniture will create more space. While not always practical, it is best to try and reduce the home’s contents by about half – this means being ruthless with the selection. Hiring a storage unit while the home is on the market will help in storing pieces that the seller wants to keep, but don’t want in the house,” advises Goslett. 
Apart from the space element, with fewer items in the home, it will be far easier to keep clean. “Fewer items means that it will be easier to have the carpets professionally cleaned, which will make a big difference to how the home looks and smells. Washing the curtains will also add a pleasant aroma to the home. Fresh or new bedding will go a long way in sprucing up the bedrooms and having them look their best on show day,” adds Goslett.
He notes that it is important to be conscious of the way the home smells because it can have an impact on the sale of the home. Good smells conjure up positive emotions, while bad odours, on the other hand, will put potential buyers off. “Nothing beats the smell of freshly brewed coffee or freshly baked bread on a show day – it is a really inviting smell to most people,” Goslett explains.
Once the property has been de-cluttered, cleaned and smells good, sellers can start looking at other aspects such as painting the walls if required or rearranging the furniture. Each room should be as open and bright as possible. It is best to have the curtains or blinds open to let in as much light as possible and the lights should be turned on. 
“Sometimes subtle, well-planned changes can make the biggest impression, such as a sparkling blue swimming pool or a mowed lawn,” says Goslett. “A nice touch is some fresh flowers on display, a welcome mat or fresh fruit in a bowl in the kitchen – all these little things combined will add to the appeal of the home and impress potential buyers,” he concludes.
 
Read more

Regulations shake up sectional title ownershipMon 28 Nov 2016

Regulations shake up sectional title ownership
New Regulations came into effect on 7 October 2016 under the Community Schemes Ombud Service Act (CSOSA) and the Sectional Titles Schemes Management Act (STSMA), now require sectional title owners and trustees to up their game.
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that under the previous system, to a large degree trustees, owners, and sectional title schemes have been able to get away with a lot because the cost of holding them accountable has been too high for the average resident.  “Not many people can afford to pay the arbitration or litigation costs when a dispute arises, however, this will change under the new regulations,” he says. “Through the Community Schemes Ombud Service provided for in the CSOSA, residents within community schemes, such as sectional title schemes or homeowners’ associations, will be able to take their dispute to a statutory dispute-resolution service instead of a private arbitrator or the courts.”
Goslett says that this will provide residents with a far more cost effective solution to resolving their disputes with community schemes, as the service will be partly funded by taxpayers’ money with the schemes paying an annual levy to the service. He notes that those who seek intervention will pay an application fee and possibly an adjudication fee, which provides owners much-needed relief from the time consuming and costly routes provided for in the traditional route through the courts.
Despite the fact that both the CSOSA and STSMA were signed into law as far back as June 2011, both Acts came into operation on 7 October 2016. The Acts work hand in hand with the STSMA assuming that the CSOSA is operational. While the STSMA replaces sections 37 to 48 of the Sectional Titles Act, which governs how a body corporate must manage the scheme and conduct its business, the Sectional Titles Act will continue to prescribe how a scheme must be established. Although many of the provisions covered in the STSMA duplicate those of the Sectional Titles Act, there are some significant differences between the two. 
A reserve fund will be mandatory
At the moment only some sectional title schemes budget for future expenditure by setting aside a percentage of the levies collected in a money market fund. Although the Sectional Titles Act does require bodies corporate to take future expenditure into account, there is currently no minimum amount that needs to be saved.  In the instance where there is not enough money because the scheme has not made provision for future expenditure, under the current system a special levy will be raised when the need arises. 
Under the STSMA, a body corporate has to establish two funds, namely an administrative fund and a reserve fund. Levies must be paid into the administrative fund and only used to fund operating expenses in the current financial year. A percentage of the money collected must also be allocated to the reserve fund, which will be used to pay for future expenditure determined by a maintenance, repair and replacement plan. The body corporate will be required to draw up this plan. 
Although trustees will still be allowed to raise special levies, the reserve fund is intended to cover expenditure that many bodies corporate are funding via special levies. This expenditure includes repairs that could not have been reasonably foreseen when the maintenance plan was drawn up or urgent repairs required to prevent damage to property or to ensure the safety of the scheme’s residents.
The regulations prescribe a formula that the body corporate must use to determine the minimum allocation to the reserve fund. The formula is based on the amount in the reserve fund at the end of a financial year and the total contributions collected during that period.
A comprehensive maintenance plan
Body corporates now need to prepare a plan for the maintenance, repair, and replacement of major capital items on the common property within the next 10 years. Major capital items are defined as electrical systems, plumbing, drainage, heating and cooling systems, lifts, carpeting and furnishings, roofing, painting, waterproofing, communication systems, paving and parking areas, roads, security systems and any recreational facilities. 
The plan must set out the current condition or state of repair of each capital item, as well as when each item will have to be maintained, repaired or replaced. The plan must include costing and the expected lifespan of the items once they have been maintained, repaired or replaced.
Mandatory Fidelity insurance
It is compulsory for all community schemes to take out fidelity insurance against the risk of money being lost as a result of fraud or dishonesty by an “insurable person”, which means anyone who has access to the money that belongs to a scheme. A minimum amount of fidelity insurance is prescribed by the regulations and the policy must pay out without the scheme having to pursue criminal or civil proceedings. 
If an insurable person, such as a managing agent, can prove that they have taken out cover that complies with the regulations, the scheme will be exempt. It is required that the insurer notes the scheme’s interest in the proceeds of the policy and agrees not to cancel it without giving the scheme at least 30 days’ notice.
Penalty interest will be capped
The regulations now cap the interest that body corporates can charge owners who default on their levies. The regulation states that the rate may not exceed the maximum rate of interest a year, compounded monthly in arrears, as it applies in terms of the National Credit Act (Act 34 of 2005). The cap restricts trustees on the amount of penalty interest charged where currently, a body corporate can decide on the rate of interest.
“The changes will have a significant effect on how sectional title schemes will conduct their business. It is advisable for sectional title owners and residents to read up on the regulations and the possible impact it could have going forward,” Goslett concludes. 
Read more

Interest rate reprieve for SAFri 25 Nov 2016

Interest rate reprieve for SA
It was announced today at the last Monetary Policy Committee (MPC) meeting of the year that the interest rate would remain unchanged as we move into 2017. The repo rate will stay at 7%, with the prime lending rate currently at 10.5%.
A slow economy and the need for expanded money supply has led to the Reserve Bank pausing their hiking cycle for the time being, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. “While consumers are not in the clear quite yet, it seems that there are indications that the hiking cycle has run its course and is coming to an end in the near future. If this is the case, it will be good news for bonded homeowners and prospective buyers who are eager to purchase a property next year,” says Goslett.
Since January 2014 up until March this year, rates have increased by a cumulative 200 basis points, which has added to the financial pressure that has been placed on consumers. While a 200 basis point increase is relatively conservative when compared to the previous hiking cycle where rates went up 400 basis points, it comes amid electricity tariff hikes, petrol price increases and drought-induced escalating food prices. 
“For the majority of 2016, interest rates have remained steady due to weak economic growth, the strengthening of the currency and an improved inflation outlook. However, there is still the chance that at least one more hike could be on the cards in the future, so consumers need to financially prepare where possible,” advises Goslett. “It is likely that the Federal Reserve will hike the US interest rate in December. If this occurs along with a negative assessment from rating agencies, the currency will once again suffer, placing pressure on the MPC to hike interest rates during the first quarter of 2017.”
According to Goslett, consumers should take this interest rate pause as an opportunity to reassess their financial situation before the start of the New Year and cut the fat where possible. He adds that currently, households spend approximately 76% servicing debt. “Even if there are no further rate hikes in the immediate future, poor economic growth, price pressure and job losses will continue to impact on the property market and more importantly consumer’s back pockets. Reducing debt levels and increasing savings will lift consumer confidence as we welcome in another year,” Goslett concludes.
 
Read more

Is there a difference between offers?Fri 18 Nov 2016

Is there a difference between offers?
It is not uncommon for sellers to receive more than one Offer to Purchase (OTP) on their property at a time, especially if the home is situated in a sought-after area, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. He adds that while it might be tempting to simply accept the highest offer, this isn’t always the best offer and it is important to look at all offers in their own merits, paying particular attention to the clauses of each contract. 
“The seller’s real estate agent will be able to provide some valuable insight when going through each offer to determine which one is the most beneficial. In terms of the mandate given to the agent, the agent must act in the best interest of the homeowner to ensure that the optimum outcome is achieved during the property transaction,” says Goslett. “The highest value offer might seem as though it is the obvious choice from the outset and achieving the highest possible sales price is ultimately the end goal, however, there are other aspects that need to be considered before making a final decision.” 
Goslett says that before sellers think about accepting an offer, the following should be in place:
Copies of any council-approved plans on the property, as well as checking all other documentation is up-to-date and correct. This will expedite the time it takes for the property to be transferred, ensuring the process goes more smoothly.
Ensure that the contract is easy to understand and covers all aspects that are to be agreed upon by both parties. This should include factors such as which items will be regarded as fixtures and fittings. Having these aspects in a written document will reduce any chance of a misunderstanding or disagreement in the future.
According to Goslett, when a seller is reviewing each OTP there are a few critical elements that they should pay particular attention to, as this will help them to differentiate between the various offers.  He gives sellers a few basic points to consider:
Is the offer conditional?
The majority of offers in today’s market are subject to certain suspensive conditions that need to be satisfied before the transaction can come to fruition. These could include the buyer first having to sell their current home before they can purchase the seller’s property.  While not entirely out of the ordinary for an OTP to be void of any suspensive conditions, it is important for the seller to consider that the property will be off the market while the terms and conditions are waiting to be met, should they choose to accept the offer.
Does the buyer have a deposit? 
Most buyers will be required by the bank to have at least 10% of the purchase price of the property as a deposit, however, in certain instances, a buyer may be asked to provide as much as 30% of the purchase price. The more money the buyer has available to put down as a deposit, the greater the chance the buyer will have of obtained the required finance to purchase the home. Often deposit is also a good indication of the buyer’s financial position and how serious they are about buying the home.
Is it a cash deal or financed?
Ideally, the fewer complications involved in the financing of the purchase, the better, as it means that less can go wrong further down the line. Cash is king, but only a small percentage of transactions are completely cash deals. The majority of buyers will require a bond, but banks are far more willing to approve a bond if the buyer requires less than 80% of the purchase price of the home. Although generally not an issue, it is advisable to be cautious of buyers that require third parties to sign a surety on their behalf. 
The date of occupation
In the perfect scenario the occupational date and the transfer date would coincide. To a large degree, this will mitigate the amount of stress and complications in the event that the deal does not materialise. If the offer contains any suspensive conditions, the seller should not allow occupation of the home until these conditions are met and all documentation has been signed by both the buyer and seller at the conveyancing attorney. 
“Once a seller has perused all aspects of each offer is satisfied, then they can consider the price that the buyer is offering. There are instances where the seller could find that the lower offer is actually the right one for them, depending on their needs and the conditions of the offer,” Goslett concludes.
 
Read more

Start with your best foot forwardFri 11 Nov 2016

Start with your best foot forward
As we approach the end of another year, many students will be thinking about their lives going forward and what the future may hold for them. After graduating many will be entering the job market, starting on their career path and entering a new life stage. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, the financial decisions that these young consumers make early on, will largely dictate their financial well-being in the future. “Starting out in the right manner from the beginning will assist graduates to build a financial nest egg that will help them to achieve their financial goals, such as owning their own property when they decide to get into the market,” he says.
Goslett provides a few crucial steps that graduates can take to ensure they set out on the right path: 
Pay off student debt as quickly as possible
Unfortunately most students will graduate with substantial student debt which will hinder them financially until it is paid off. Ideally, graduates should focus on paying off the debt as quickly as possible, so that they start their new endeavours with a clean slate. “With the interest rate hikes placing further financial pressure on consumers with high debt levels, it is advisable to make every effort to reduce debt at all costs. Once student debt has been cleared, the consumer will be able to start building their saving,” advises Goslett. “The majority of South African consumers are struggling with high debt levels and minimum savings, however, if graduates can take the necessary steps to reduce their debt from the start, they will be paving their way for financial successful in the future.”  
Don’t live above your means
With starting to earn money comes the temptation to indulge and spend on unnecessary luxury items. However, it is best for graduates to try and live within their means and avoid making large purchases when initially starting out.  “Purchasing large-ticket items could leave graduates in further debt which can take years to get out of. This will affect the graduate’s chances of bond approval at a later stage if it is not paid off,” says Goslett.
He adds that a high debt-to-income ratio will impact the graduate's ability to show the necessary affordability levels for bond approval. Therefore it is vital that graduates exercise disciplined spending habits from their first pay cheque. 
Save, save, save
The sooner a graduate starts putting money aside for savings the better. Compared to some of the other emerging markets around the world, South Africa has a very low household savings rate. As a result, many prospective homebuyers do not have the necessary savings in place to meet the bank’s deposit requirements during the bond application process. Goslett says that apart from the deposit, homebuyers are also required to have money for the other expenses involved in a property transaction, such as the transfer duty, attorney fees and registration costs. “If possible any salary increase that the graduate receives should be put towards building up savings instead of splurging on an expensive purchase or holidays,” advises Goslett.
Prepare for an emergency
A portion of the savings should be set aside in a contingency fund. “It is often impossible to predict what will happen in this life, so it is best to always be financially prepared for the unexpected. Financial advisers suggest that an ideal goal to set when saving for an emergency is enough money to cover living expenses for a period of six months. A contingency fund will reduce the need to use credit cards or personal loans when unexpected expenses occur.
Seek professional advice 
A professional financial adviser will be able to assist the graduate with drawing up a budget as well as providing them with a personal financial plan that will help them obtain their future goals. 
“Cultivating healthy financial habits from the start and using the right money management techniques will ensure that young professionals will be able to take full advantage of opportunities that present themselves in the property market.  Implementing a financial plan from the outset will assist graduates in realising their homeownership dreams in the future,” Goslett concludes.
 
Read more

Elements to look for in any neighbourhoodThu 10 Nov 2016

Elements to look for in any neighbourhood
Packing up and relocating to another city, or for that matter another country, is a major undertaking, so it is imperative to do the necessary research and weigh up all the options before making the final decision, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. He notes that whether it is as big a decision as immigrating or moving across the country, there are essential aspects that should be assessed in every prospective neighbourhood to ensure that you will feel at home. 
Transport                                 
Most people spend a fair bit of their day commuting to and from work every day, so it is important to consider the distance from the neighbourhood to the office. Other considerations would include whether there is access to public transportation, service hours, route and stops. If you travel often, is the neighbourhood within proximity to an airport? Or is there transport systems linked to the airport for easy commuting? 
Location is of utmost importance in real estate and proximity to reliable public transport can have a positive impact on the appreciation of the home’s value over time. International studies have shown that home values tend to rise faster in areas that are close to bus, train and underground stops. The opening of the Gautrain stations is a prime example of this, with home values around the stations experiencing higher growth than areas that are further away.
Local businesses
Consider the retailers and businesses that you frequent often, such as the bank, pharmacy, and grocery store. Are these shops conveniently located within proximity to your prospective new home? While a gourmet deli and coffee shop is a great place to meet up with friends, being near to a grocery store that stocks your daily staples is far more practical. Ensure that the businesses are reputable and that their prices are reasonable. Much of the legwork can be minimised by reading online reviews. 
Schools
For a family with children or a couple planning to have children in the future, the quality of the schools in the area is an essential element to consider. In fact, even if you don’t plan on having children it is an important consideration because it will have an impact on the home’s potential appreciation in value. Homes that are close to good schools are highly sought-after and will sell for higher prices. So why do schools have the impact they do on housing? It is largely due to the schooling zoning system. If there is space available, parents may register their child for any public school. However, most public schools will have a specific feeder zone. The child’s home address will determine which schools the child is zoned for. The children within the feeder area will be given preference over others outside of that zone.
Amenities
While proximity to amenities is important because it will influence the home’s investment potential, there is another element that relates to the buyer’s personal needs and wants. Someone who rates culture very highly will want to be near to art galleries and theatres, whereas someone who enjoys the nightlife will want to be close to restaurants, pubs, or dance clubs. A sports enthusiast would want to know the distance to the stadiums and athletic arenas in the area. There is also the matter of free entertainment, such as parks, museums and libraries.  
Economy
This doesn’t relate to the country’s economy, but rather more specific factors that are influencing a certain area, such as a high crime rate. There will be telltale signs if an area is experiencing a financial decline, such as houses in need of attention, unkept parks, littered streets, and businesses closing down. Many people will want to move out of the area, so look for a prevalence of ‘for sale’ signs.   
Goslett concludes by saying that using these guidelines will assist you to find the right neighbourhood that will meet all your needs, regardless of whether it is in South Africa or abroad.
 
Read more

Ways to make renovating less stressfulTue 08 Nov 2016

Ways to make renovating less stressful
Renovating is an excellent way to update the look and feel of a home, while possibly adding to its value. however, the process can be just as stressful as moving to a new home, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. He notes that while the task can be daunting, there are several methods that can be used by homeowners to reduce the potential stress caused by a renovation project.
“Regardless of whether it is updating the kitchen or adding another room, a renovation project can be disruptive and frustrating to daily family life. Having parts of the home turned into a construction site can be restrictive, added to that there is also often an entire crew of contractors creating congestion. A once peaceful home is turned into a noisy, busy, work site that can no longer be called an oasis,” says Goslett. “Before any renovation project is started is important to get the family prepared by having a solid plan of action so that everyone remains on good terms. When the basic aspects of daily life are not readily available people can get irritable and home life can become difficult. This plan of action should deal with issues such as where everyone will sleep, shower and eat during the renovation if the project affects these areas of the home.”
In cases where the renovation project affects the entire home, if possible, it would be best to make arrangements to stay somewhere else until the project has been completed. Although moving out will mean that the homeowner will not have to deal with the dust and disruption, it comes with its own set of challenges and will also require a fair deal of planning. “While moving out is a good option, people often don’t because it is an additional expense on top of the renovation budget. It is also a great deal of effort to move out of the home on a temporary basis, only to move back in once the renovation is complete. Most homeowners would rather stay in their own home and just deal with the disruption,” says Goslett.
From the outset of the project, the homeowner should set some ground rules that will help everyone to deal with the situation better. An example would be asking the contractor to do a daily clean up after they have finished working. To some degree, this will allow the family to gain normal functionality during the evenings. While not always feasible, ideally at least one room and bathroom should be kept fully functional throughout the process. 
“An extremely difficult room to do without is the kitchen, so if this is the space being worked on it is imperative to have a backup. This is when a camping stove or braai area will come into its own as an alternative way for the family to still enjoy a meal together. Another option is takeout food, which addresses the issue of washing up afterward. If the family has a caravan, it might be worthwhile using this as an alternative until the dust settles,” suggests Goslett.
It is important to remember that the situation is only for a limited time and the result is an improved living space for the family to enjoy. Keeping your eyes on the prize will make it easier to deal will the current state of affairs and will reduce stress levels to some degree.  “While the process of renovating may be uncomfortable at times, it is essential to bear in mind that the renovation project will make the home more comfortable for the whole family when all is complete,” Goslett concludes.
 
Read more

Selling your home - Facts vs fictionMon 07 Nov 2016

Selling your home - Facts vs fiction
A property sales transaction can be a complex process, especially for buyers and sellers who have never been through it before. These days there is a world of information at our fingertips, and of course, the well-intentioned family and friends who are eager to give advice, but receiving from so many sources can lead to more confusion and uncertainty. 
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that while there is a plethora of information available to buyer and sellers, it is not always easy to discern between which information is worth taking note of and which isn’t.  As a result, there is a number of home-selling myths have become commonplace in the property market.
Goslett provides a few truths and facts to expose the fiction and steer sellers in the right direction:
Fiction – The property’s selling price is determined by sellers 
Fact – While it is the seller who will make the final decision as to what their property sells for,  the selling price of the home will largely be determined by several key aspects such as its location, size, condition and the market.  If buyers do not perceive the home to be priced at fair market value they will not be interested in purchasing it. Buyers in the market will have a large influence as to the selling price of a property. If the home is in demand it will fetch a higher price than if it is not. The initial asking price of the home can vary greatly from the actual selling price.
Fiction – Overpricing leaves room to negotiate
Fact – Often overpricing will have the opposite effect to what the seller intended. Instead of leaving room for negotiation, overpricing drives buyers away, especially if they have researched homes prices in the area. Inflating the home’s price will alienate buyers pools, in that buyers who could perhaps afford the home at its true market value will overlook it. Equally, those who can afford the inflated price will soon realise that the home does not compare to others in the same price bracket. As a result, the home could stagnate on the market and sell for far less than what it may have sold for if listed at the correct price from the start. 
Fiction – It is not necessary to make repairs and prepare the home for sale
Fact – There is no doubt that there is a market for buyers who are looking for a property they can renovate themselves; however, most buyers are looking for a home that is ready for them to move into. A home in ill-repair will generally be far less attractive to buyers than a home in pristine condition. While largely dependent on the seller’s budget and time frame, it is recommended that all major repairs are seen to before the home is listed. The property will be viewed as move-in option, and the agent can also mention the repairs as a selling point in the marketing material. If any defaults are found during an inspection, the seller can then discuss options with the buyer regarding additional repairs or dropping their asking price.
Fiction – All renovations and home improvements pay for themselves
Fact – Although certain renovations and home improvements will increase the home’s value, it is seldom that the seller will receive all the money back that they have invested in the project. Therefore, before deciding on any project is best to get expert opinions on what should be fixed or changed and what kind of return can be expected as a result. 
“Knowing the facts will assist homeowners to get the most out of their property sale. If ever uncertain of any aspects relating to the sale, sellers can seek guidance from a reputable real estate professional who will be able to navigate them through the process,” Goslett concludes.
 
Read more

Millennials changing the real estate marketFri 04 Nov 2016

Millennials changing the real estate market
Consumers under the age of 30 years old or millennials as they are more commonly called, are standing up and making their presence known in the real estate market, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. He adds that while it is the Generation X consumers, aged between 31 and 45 years old, who are still the driving force behind the property market, there are several areas around the country where millennials represent the highest percentage of recent buyers.
“There are approximately 18.74 million Generation X consumers in the country, however, Millennials account for around 28.4 million of the population. This up-and-coming generation will have a massive impact on the economy and more specifically the property market going forward. As the future decision makers, Millennials will be able to change the real estate industry as we know it and will largely influence trends that we see unfold. To a large degree, we are already seeing trends develop as more and more Millennials influence the dynamic of the real estate sector,” says Goslett.
He provides a few buying and lifestyle habits of millennials that will shape the economy and real estate industry:  
Millennials would rather rent
There are a number of reasons that these younger generation consumers favour renting over buying. Given the increasing cost of living and challenging economic conditions in South Africa, many millennials are opting to stay in the rental market a while longer. There is also the desire to stay in trendier, often more expensive areas they that would not afford to buy in. Renting offers them the freedom to pick up and go with relative ease. While millennials want their own space, many feel that they are not ready to manage a property and prefer to have a landlord take care of the maintenance issues. 
Most do value homeownership and will invest in a property as they get older, however, rising debt and delayed life events will delay the process. When they do purchase a home it is likely to be an entry-level home that they can rent out if they decide to move away. 
Millennials are tech savvy
Millennials are heavily reliant on technology and are more likely to use online search portals to find a home they like than going through an agency. In order to stay relevant, real estate professionals will need to have a strong online presence to successfully engage with the millennial generation. This includes a website with high-quality images of homes and an engaging social media presence. 
Compact, efficient spaces
A large number of millennials are looking for a minimalist lifestyle which includes fewer possessions and smaller living spaces, as this provides them with both the flexibility and financial stability they want. Generally, millennials don’t want to spend all their time at home but see their living quarters as more of a home base. As a result, they are comfortable in smaller, lock-up-and-go spaces. Many are also looking for homes with energy-efficient appliances and fittings so that they can reduce both their monthly living expenses and carbon footprint.
In order to cater to the wants of millennials, the industry will need to keep increasing its energy-saving home offering. Environmentally-friendly, multi-functional spaces are highly appealing to millennial home buyers.   
“Millennials have already started to impact housing market trends and will grow in influence as their incomes increase and they begin to settle down. As this generation continues to effect change, the real estate industry will need to take their needs into consideration and innovate accordingly,” Goslett concludes.
 
Read more

Excessive water usage will cost moreWed 02 Nov 2016

Excessive water usage will cost more
With level-three water restrictions underway in the Western Cape, households could face higher water bills as the city implements a stepped tariff billing system based on the amount of water each household consumes. 
While the first six kilolitres of water will still be free, thereafter residents will be charged per kilolitre depending on their usage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. “The tariff will start at R16.54 per kilolitre, with households that use between 20 and 35 kilolitres paying as much as R40.96 per kilolitre. The new tariffs will come into effect next month in December. If consumers want to keep their water bills at a minimum, they will need to adhere to the restrictions and find additional ways to reduce their water consumption,” advises Goslett.
He notes that as the temperatures rise it will be ever more important to reduce water usage to ensure that the precious resource is sustained. It will be imperative to keep water consumption consistent to winter levels during the hotter months to ensure that the dam levels do not reach critical measures.  Currently, the major dams that provide Cape Town with water are down by 10% when compared to the same period last year. 
“Water is a vital commodity that we require in order to survive. Without water, the environment we live in could not survive, so it is imperative that the necessary precautions are taken to ensure that this essential resource is not used carelessly,” says Goslett. 
He says that from the start of this month households will be asked to adhere to the following restrictions:
Residents are urged to install water-efficient parts, fittings and appliances to minimise water usage at all water points such as taps, showerheads and other plumbing components. 
Pools can be manually topped up, provided the pool has a cover. Automatic top-up systems will be prohibited. 
The use of portable play pools will not be allowed.
Residents will only be allowed to water their gardens with either a bucket or watering can. The use of hosepipes and sprinkler systems will be prohibited. Watering or irrigation is not allowed 24 hours after saturating rainfall; this includes households making use of boreholes, treated effluent water, spring water or well points. South Africans consume an estimated 30% to 50% of water on watering and maintaining their gardens, so it seems that this is the most significant area for water to be saved. 
Vehicles and boats can only be washed using a bucket.
Hard or paved surfaces cannot be washed or hosed down, other than for health purposes. 
Ornamental water features such as fountains can only be used if the water is recycled or non-potable. 
In addition, Goslett says that there are several other ways that residents can save water in and around the home, which will bring down monthly water bills and more importantly, reduce water usage. He provides a few tips that will assist people in lessening their impact on the water crisis:
Inside:
Taps
Ensure that after use, a tap is closed properly. Although a relatively small thing to do, a tap dripping at one drop per second will waste as much as thirty litres of water in one day.  This equates to around 10 000 litres of water wasted over a period of a year, simply from one single dripping tap.
Replace tap washers regularly and fit aerators to restrict and spread the flow. An aerator will reduce water usage creating a no-splashing stream and often delivering a mixture of water and air. Remember to turn off the tap when brushing teeth. This will save around twenty litres of water per month. A mug of water can be used to rinse the toothbrush after use. 
Bathroom
Showering uses less water than bathing, provided the shower is less than 5 minutes long. If there is only the option of taking a bath, it should be as shallow as possible and the water reused in the garden. 
Ideally when showering the water should be turned off when soaping or shaving. When opting to shave at the basin, it is best to plug the basin rather than rinsing the razor with running water. This will save approximately 45 litres of water a month. 
A leaking toilet can waste vast amounts of water. A few drops of food colouring in the cistern will help to determine if any water is leaking from the toilet - if the system is leaking it should be fixed without delay. Adding a brick or sealed container of sand to the cistern will reduce the amount of water used during each flush.  
Kitchen
Only use washing machines and dishwashers when they are fully loaded. Rather than rinsing dishes under running water, opt to rinse items in a basin and then reuse the water in the garden. When waiting for dishwater to heat up, run the tap into bottles to use as drinking water. By keeping bottles of drinking water in the fridge, there is no need to let lukewarm water be wasted when waiting for the tap water to cool. 
Outside:
Choose the right plants
Select indigenous plants as they will generally consume less water and require minimal maintenance.  Adding mulching and water retention granules to the soil to the garden beds will substantially reduce water usage. Watering should only be done either in the morning or the evening. 
Reduce lawn areas
Lawn maintenance requires a lot of water. Consider adding hardscaping features such as a paved or cobblestone footpath, which will reduce watering areas.  
“Becoming water-wise is essential and not just because it will save on monthly household costs. It is important in order to protect and sustain a precious life-giving resource,” Goslett concludes.  
To query water restrictions, residents can contact the City via e-mail to:Water.Restrictions@capetown.gov.za
 
Read more

Tips for packing and moving quicklyMon 31 Oct 2016

Tips for packing and moving quickly
When it comes to moving, ideally you would want some lead time to be able to prepare and get everything in order. However, due to certain circumstances, time is not always a luxury that some people have. After Theresa May took over as Britain’s new prime minister, former prime minister Dave Cameron  had just 48 hours to vacate 10 Downing Street. Unlike most of us, Cameron was fortunate enough to not have to do the packing himself – professional movers arrived with 330 boxes, 30 rolls of tape and three rolls of bubble wrap. Hopefully the next time you move you have as much help, but if not, Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, provides a few tips to help maximise the time you do have.
Create a packing station
A lot of time can be wasted by constantly trying to find items around the home, such as the scissors, boxes or bubble. Pick a place in the home that can be used as a packing station and keep the required items together. Stock the packing station with plenty of tape, boxes in various sizes, bubble wrap, newspapers and markers.
Have a plan of action
Having a strategy and sticking to it will help make the process a lot smoother. Essential items should be packed together in specially marked boxes. Included in these items will be things that you would want on the first day in the new home, such as bed sheets, pet food, electronics chargers, toiletries and a change of clothing. Packing one room at a time and labelling the boxes by room will help ensure that items stay. It is helpful to colour code the rooms and mark the boxes accordingly with markers, stickers or coloured tape. 
Get two different colour rubbish bags
To avoid confusion have rubbish bags in two colours, one for packing and the other for throwing things away. A lot of space can be saved by packing clothing and linens into big plastic bags, as they can be squeezed into tight spaces between boxes. 
Fill drawers
If you are using professional movers to move and have not enlisted the help of friends who may have back issues, pack your dresser drawers with as many items as possible - this will save both time and space. 
Be mindful of weight
It is best to pack heavier items in smaller boxes and fill big boxes with lighter items. This will ensure that the boxes are not too heavy to move and will prevent them from breaking, which will waste time and possibly damage the items that were in the box. 
Don’t get hung up on clothes
Rather than taking clothes off hangers, folding them and packing them in boxes, use wardrobe boxes. This will allow you to simply transfer your clothes on hangers inside the specially designed wardrobe box, saving time and effort.
If you have the money…
If you are not trying to save on costs – make use of professional packers. They will pack your entire home, just a room or a group of time-consuming items, depending on your needs. 
Goslett concludes by saying that while moving within a tight time frame can be a daunting task, if the right methods are used it can be done and will be far less stressful. 
Read more

How do you know it is time to sellThu 27 Oct 2016

How do you know it is time to sell
Choosing to sell your home can be a big decision, so it is important to know that you are ready to move on, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.  He notes that in today’s competitive real estate market, listing a property can be a daunting task as there are so many things to consider, such as the challenging economic conditions surrounding the market, price and what real estate agent to use.  However, selling a home can also be an opportunity to improve your lifestyle and start fresh.
Goslett provides homeowners with five signs that they might be ready to place their home on the market:
Your family has outgrown the space
If the home no longer meets the family’s needs due changing circumstances such as another baby on the way or perhaps an ageing parent moving in, then maybe it's time to find a bigger home. 
Your neighbourhood is booming
Within the larger macro property market are smaller micro-markets that occasionally buck trends. Certain areas might be experiencing a boom in the market due to external factors such as an upgrade in infrastructure or the building of a new amenity.  If homes in your area are selling above their listing price, then it might be an excellent time to take advantage of the situation and sell your home. 
The home is too much maintenance
If a busy schedule keeps you from regularly maintaining the property, it might be better to sell it and purchase a lock-up-and-go unit that requires little to no maintenance. Not everyone’s lifestyle is conducive to owning a home that requires regular upkeep. If the grass is knee-high and the swimming matches the colour of the lawn, perhaps it’s time for a change. 
There is home equity 
Homeowners who purchased their properties before the housing crisis may have had to hold onto their homes until they could build up equity again. Those who purchased their homes in 2008 would have sold at a loss if they had listed their home in the few years that followed, however, the housing market has recovered and in most areas homeowners will now have built up equity making selling an option.
Your criteria have changed
Whether it is the family growing or shrinking, a new job with a long commute, retirement, divorce or any other life altering change could be cause to seriously consider moving on. While the home may have been perfect when you bought it, things change and your needs develop. If the home no longer meets your current criteria, it is probably time to find another one that makes more sense to your life as you now know it. 
“Although making the decision to sell a property can be stressful, it can also provide you with the opportunity to find another home that is more suited to your current needs and life stage. 
Using an experienced real estate professional from a reputable brand will also expedite the process and ensure a quick and seamless sale,” Goslett concludes.
 
Read more

Sign boards still have a place in today's marketWed 26 Oct 2016

Sign boards still have a place in today's market
In the age of technology that we live in, the internet has revolutionised the property industry and how business is concluded. With over 26 million users connected to the internet in South Africa, it has become one of the main marketing and advertising tools used by real estate professionals to effectively reach large masses of people in a short time frame. 
According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, many prospective homebuyers use the internet because they are able to access large volumes of information without much effort. “Rather than spending time and fuel on driving around looking for properties, most buyers would rather use online search portals to browse for property in the comfort of the current home office,” says Goslett. “Conversely sellers would rather have a buyer see their home online and then make an appointment to view it in person, than have their home open to strangers on show days. Both the homeowner and the agent’s safety is a concern, which is why the more modern media platforms have favoured over the more traditional marketing methods.” 
However, even though technological advancement has changed the face of the real estate market, there is still a place for the traditional marketing methods. Goslett says that along with all the online marketing and advertising that a real estate agent will use to sell the property, a sign board outside a home is still an excellent lead-generating tool to attract buyers. “Research reveals that even in today’s internet age, a sign board outside a home is so effective that it can generate as many as ten buyer leads during the length of the listing agreement, provided, of course, it can be used in the area the home is situated in,” says Goslett.  
He notes that in certain areas municipal bylaws, body corporates and homeowner associations restrict the use of sign boards and show day pointer boards. “While there are certain challenges, a ‘for sale’ sign is a simple and effective method of marketing a home and increasing its exposure. Although not leads generated by a sign board will be consumers who qualify to purchase the home, it is still an effective marketing tool that increases the home’s chance of being sold,” says Goslett. 
He says that to ensure that the generated leads are handled in the correct manner, it is imperative that an experienced, knowledgeable agent is on hand to answer the calls from potential buyers and investors who are interested in the home. “Irrespective of the methods used to market the property, be it modern or traditional, it is important to work with the right agent and brand,” advises Goslett.  “The homeowner should ensure that the agency they choose to list their property with has a system in place which forwards all lead calls coming into the office directly to the agent who is working with and marketing the home. The person who knows the property best should be the one who handles the calls from prospective buyers. This is the most effective way to ensure that the marketing strategy serves the goal of finding the right buyer,” Goslett concludes. 
 
Read more

Purchasing a retirement home?Tue 25 Oct 2016

Purchasing a retirement home?
For a homeowner who has reached retirement age and is looking to purchase a retirement home, there are several aspects to consider, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. Not only do they have to consider the location of the property they want to buy, but also the type of property they want to stay in, and the type of sales transaction that meets their criteria. 
Statistics reveal that the majority of South African investors who are in their golden years currently own some kind of property and have sold a property to either downsize and move into a more secure environment that is close to amenities such as hospitals and frail-care facilities.  “Banks are generally reluctant to grant finance to investors who are 60 years old and older, which is why the majority of property purchases are cash buys, particularly those in retirement villages,” says Goslett. “Many investors often decide to purchase a retirement home before they turn 60 years old. Certain developments allow investors to buy a home under the prescribed retirement age, even though they set the age of the residents within the development at 50 years old and above. In some cases, investors will purchase a home within a retirement village and let it out until the reach the minimum age required to live there themselves.”
For investors who are in the position to retire, there are a few investment options to choose from, ranging from entry-level homes to luxury properties and everything in between.  Apart from the various types of properties available to investors, there is also a few ways in which  investors can purchase a home in a retirement scheme. According to Goslett, the different forms of ownership play distinctive roles in what the investor can do with the property, so it vital that they understand what each scheme offers. 
He notes that the three options available when purchasing retirement property are:
A sectional title scheme
Purchasing a sectional title retirement home works the same way as any other sectional title purchase. Goslett says that this option will be the most familiar to property investors, as the purchase process follows the regular channels. 
“Much like any other property purchase, registration of the home is concluded through the Deeds Office by a conveyancer.  All of the regular purchasing costs and fees involved will apply, such as transfer duty and the conveyancing attorney fees,” Goslett explains. “Once the property is transferred into the investor’s name they will automatically become a member of the body corporate which will allow them to have a say as to how the scheme is run.”
Share block scheme
Within a share block scheme, a company will own a building and allocate a number of shares to that building which is divided into share blocks. Company shareholders will have the right of occupation to certain portions of that building. In this instance, the resident owns shares in the company that owns the building and not the building itself. 
Unlike a sectional title scheme where residents have a say as to what happens with the development, in a share block scheme, the management and directors of the company can make decisions without consulting the shareholders within the block. A possible disadvantage of this scheme is that the shares cannot be used to leverage further investments, however, if the investor owns an immovable property is can be used as leverage. 
There is the possibility for a share block scheme to be converted to sectional title scheme provided 30% of the owners in the scheme vote to convert and after conversion, half the owners support the resolution. If this occurs and the investors take transfer of their units, they will become property owners, rather than share owners.
Life rights or occupation rights
In a life rights scheme, the investor is not purchasing a property, but the right to live in the property. Goslett says that life rights do not give the purchaser ownership of the property, but merely the right to occupy that specific property for the rest of their life, under the Housing Development Scheme for Retired Persons Act. 
If the investor is married, the life right will extend to both the primary investor and their spouse. This ensures that in the event that either pass away, the other may continue to remain in occupation of the property. Because the ownership of the property has not been transferred, there are no legal costs, transfer duties or tax payable in this option.
Goslett advises that investors should research each option thoroughly before making a final decision, giving careful consideration to the implications of each option before they commit. “Investors will be able to get all the relevant information from the retirement village or estate they are interested in buying in. If they have queries about anything investors should consult with a financial advisor or real estate professional with extensive retirement property experience. Ideally, investors should have all the documentation checked by an attorney to ensure that everything is in order – errors could be very costly, especially when living on a fixed income,” he says. 
According to Goslett, other aspects to consider include whether the property will be registered in the buyer’s name or in another entity such as a trust. These factors will be determined by the financial situation of the purchaser and will include aspects such as Death Duty and Capital Gains Tax. 
In conclusion, Goslett says that making wise investment decisions from their very first property purchase will provide investors with the best possible chance of being in a position to afford their ideal retirement home later on in life.
 
Read more

Consumers' property needs are evolvingMon 17 Oct 2016

Consumers' property needs are evolving
The property needs in South Africa are evolving as more and more people move into urban areas, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. He notes that in 1960 around 46.6% of the population lived in urban areas, however, that figure has changed dramatically with around two-thirds of the South African population now living in metropolitan hubs.
“According to a survey released by the South African Institute of Race Relations, the proportion of people living in urban areas increased from 52% in 1990 to 62% in 2011. The share of those living in rural areas dropped from 48% to 38% over the same period. Urban living surpassed rural living in South Africa in 2009. Currently, South Africa has a higher urbanization rate than the world average and it is expected to continue increasing at a rapid rate. As a result density, scarcity and re-urbanisation will be the key long-term themes in the property market for some time, as the current stock does not support the growing demand for urban property,” says Goslett. 
There are two major causes that have brought about the trend; one being that people in post-apartheid South Africa have more freedom to move around, and the other is that there is higher economic growth within metropolitan areas. “People are drawn to urban areas because there are greater employment opportunities. Urbanisation has created a concentration of economic activity, which is alluring to people who need jobs. The largest percentage of growth in urban areas has been in the smaller cities, this is mostly because of these areas having a small initial population, increasing economic activity and less competition,” says Goslett.
He notes the urbanisation is not a trend that is unique to South Africa.  Globally around 54% of the world’s population currently lives in urban areas, which is around 3.9 billion people. It is estimated that this will grow to around 66% by 2050, which is in the region of 6.4 billion people. It is expected that as a continent Africa’s rate of urbanisation will overtake Asia’s by the year 2030.
“Currently the property stock in South Africa is mostly full title homes, with this type of property accounting for 82.7% of the current market stock. Sectional title homes represent around 12% of the property stock, while estates make up the remaining 5%. As the population continues to push into urban areas and land becomes more and more scarce, it is likely that there will be far fewer full title homes being built,” says Goslett.
According to statistics from ABSA bank, in the last 20 years, flats and townhouses have made up 26.6% of newly completely buildings. In the last three years, around 36% of all residential development units financed by ABSA, were sectional title units. “Sectional title homes are in great demand due to a few reasons, such as financial pressure on consumers, inadequacy of land and a changing demand for lifestyle. It has been said that full title properties may well become an impractical and outdated luxury for most South Africans,” says Goslett.
He concludes by saying that the changing property needs within the country are no longer merely a trend they are a reality. People are migrating to suburban inner-city areas where they can live, work and play, eat and shop. This not merely because it is the place to be, but rather because of the convenience and lifestyle urban living provides.
Read more

Renting your home - The pros and consThu 13 Oct 2016

Renting your home - The pros and cons
Although it may not have been your original intention to become a landlord and let out your property, there are certain situations in life where the need may arise. Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that some homeowners may need to relocate for work or are dealing with financial difficulty that they need to address. If the end goal is to hold onto the property, renting it out could be a feasible option, bearing in mind it does have both advantages and disadvantages.  
Some advantages of letting out your property:
Financial relief or the elimination of a double house payment
A rental income will be generated when the property is let out. This money can be used to pay the bond on the property, as well as other expenses related to the home, provided of course, that the rental income is sufficient to cover these overheads. Even in the instance where the money received is not enough to cover everything, it will provide some financial relief to a homeowner who needs to pay for a bond and possibly a rental on another property as well.    
In certain cases, it is better to have a tenant in the house than have it stand empty
While there is a certain amount of risk to having a tenant in the home, leaving the home unoccupied can come at a greater cost. If the home is vacant it can become a target for thieves, vandals or squatters. This is especially true if the owner has relocated to another city or province and is not able to keep an eye on the property on a regular basis. Having the right tenant in the home provides some protection to the property and they could also assist in maintaining it.  
The tenant could be the future buyer of the property
If the owner decides that they would like to sell the property at a later stage, there is always the possibility that the tenant may decide to purchase it. The tenant may have been renting while they were saving for a deposit or to cover other costs associated with a property transaction and could be the ideal buyer. The rental deposit could also be used as part of the purchase deposit.
Now for the downside to letting out your property:
The owner may require equity to purchase another home
The only way that letting out the property can be a financially viable option is if the owner can afford to rent or buy somewhere else. In the instance where the homeowner has relocated and intends to purchase another home, they may require  the equity from their previous home as a deposit. If this is the case, then letting out the home would not be an option.  
Certain tenants could make it more difficult to sell the home
If the tenant does not want to purchase the home, they may not be very cooperative during the sales process and could make it difficult for buyers to view the property. There is also the risk that the tenant has done little to ensure the upkeep of the property or has caused damage.  If the home is unoccupied, it is far easier to make repairs, clean up and get the property ready for show days.
Dealing with delinquent tenants
Once a tenant has taken occupancy of a property it can be a long and tedious process to evict them, even if they are no longer paying their monthly rental. Landlords always run the risk of having to deal with a delinquent tenant who is costing them money and possibly causing damage to the property. Incurring additional expenses such as lawyer’s fees completely eliminates any benefits of renting the property out. This risk can be mitigated to a degree by proper vetting and background checks of all possible tenants.
Managing the property remotely can be difficult
Managing a rental property could prove to be rather difficult, especially if the homeowner is living in another city. If this is the situation, it would make sense to hire a property management agent who has the expertise to effectively vet tenants, collect rent and ensure the property is well looked after.
“Looking at both the advantages and disadvantages will assist homeowners to determine whether letting out their property is the best decision for them in their current situation. While becoming a landlord can be beneficial, it is definitely not for everyone,” Goslett concludes.
Read more

Is signing a sole mandate the right choice?Tue 11 Oct 2016

Is signing a sole mandate the right choice?
Is it better to work with one estate agent or work with many? Many homeowners feel that if they sign a sole mandate with an agent they are reducing their chances of finding a buyer in the most optimum time frame and for the highest price. However, according to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, while homeowners may think they are limiting their chances by signing a sole mandate, the truth is that it will be far more beneficial to them than they think.
“Signing a mandate means that the homeowner is giving the real estate agent an exclusive contract to market and sell a specific property. It is then up to that agent to find the right buyer for the home, ideally achieving the highest possible price within the shortest time frame. The agreement also allows the agent the right to deal with all of the legalities that are involved in the property sales transaction,” explains Goslett. 
According to Goslett sellers have two options when it comes to mandate agreements – an open mandate or a sole mandate. If a seller opts for the open mandate route they are taking the exclusivity out of the deal. This means that multiple agents, often from a variety of agencies, will be working to secure the sale. “As with most options in life, an open mandate has its pros and cons. While there are several agents tapping into their network to find the right buyer for the home, it can bring about complications and there is always the chance of a possible double commission claim. An open mandate allows for a wider net to be cast, however in doing so also opens up the potential for confusion as to which agent was the effective cause of the successful sale,” says Goslett. “One agent may have signed a sales agreement with a buyer, but it could have been the result of another agent’s advertising and marketing.”
Unlike a sole mandate, which is a written agreement, an open mandate can simply be a verbal agreement between the parties. If there is no written agreement in place, certain aspects could be misinterpreted, which could cause conflict.  A clear, written contract protects both the seller and agent, reducing the risk of any misunderstandings. “A written contract will also ensure that the agent puts maximum effort into fulfilling the goals that have been set. If an agent is working on an open mandate they may be less inclined to spend as much time and money marketing the property, which will reduce the home’s chances of selling,” says Goslett.  
Conversely, a sole mandate is a legally-binding document that must be reduced to writing. Within the agreement, an agent is given the exclusive right to sell the property for a period of time. During the allotted time frame, the seller may not appoint another agent to market the property. In the event that the seller is not satisfied with the service they receive from the selected agent they can appoint another agent once the sole mandate period has elapsed. If a homeowner has signed a sole mandate they will still be entitled to market and sell the property themselves, but only if it has been confirmed in writing with the estate agency that has been awarded the mandate. In an instance where the homeowner does sell their property, they may still be required to pay a fee to the sole mandated agent. 
“Homeowners can opt to give an agent an exclusive sole mandate, which is the same as a sole mandate but slightly more restrictive in that the homeowner is not allowed to sell the property themselves. An optional term of an exclusive sole mandate is that the seller may authorise the agent to accept or reject an offer on their behalf,” Goslett explains. 
He notes that the reason for a sole mandate is to ensure that the transaction is handled in the most efficient way  possible and all parties are protected. “It is highly beneficial for sellers to have a sole mandate in place, which is why most financial institutions and estate agencies recommend that sellers have one in place. Having a sole mandate will ensure more effective marketing of the property and an orderly conclusion to the sale,” says Goslett. 
From a logistical standpoint, a sole mandate makes more sense because the seller only has to liaise and deal with one agent, not several. This simplifies the process with far less time spent coordinating the seller’s schedule with the various agents. It is also better from a safety perspective, as only one agent will have access to the property. 
Goslett says that before sellers sign any mandate, they must know that they are working with the right agent for their needs. “It is imperative that sellers select a qualified agent with a valid Fidelity Fund Certificate (FFC).The agent should also provide the seller with a marketing plan for the property. If at any stage during the process the agent is not following the marketing plan they have provided, the seller will have the right to cancel the mandate,” he says. At all times the agent should work according to what is in sellers best interest, giving sound professional advice and assisting them to make the right decisions - especially when multiple offers have been presented.
“While sellers might be inclined to think that signing a sole mandate is restricting their options, it is actually an opportunity to simplify the property sales process by working with one reputable, experienced estate agent. It will ensure that an entire team within a real estate network is cooperating to sell the property within a reasonable time frame at the best possible price,” Goslett concludes.
 
Read more
1
Page 1 of 10