Selling a vacant homeWed 16 Aug 2017

Selling a vacant home

Listing and selling a home can be a stressful time, especially if the homeowner no longer lives in the property. What makes selling a vacant home so much more stressful? Well, the unfortunate reality is that a vacant property is a vulnerable target for vandals and the chance of the home being broken into increases.
“An unoccupied home is an easy target for criminals, which means that sellers need to take extra caution,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. “Precautions need to be taken to ensure that the home remains in its best possible state and protected from unsavoury elements in society.”
Here are some tips that can be used to help protect the property during the sale process:
Notify local law enforcement
Contacting the local police station can reduce the possibility of a problem with the home. As a tax paying resident, the seller has the right to request that the local law enforcement keeps an eye on the property while it is vacant. Most police stations will be accommodating and will ensure that additional attention is paid to the property.   
Speak to the neighbours
Inform the neighbours that the home is up for sale and currently vacant. If they don’t have your mobile number already, give it to them and ask that they make contact if there is anything they think requires your attention. Many neighbourhoods will have a watch or association that patrols the area, so inform them that the house is empty. Also, request that the real estate agent marketing the home checks in on it between showings.
Install a security system
If the home does not currently have a security system, install one. It will keep the home safer and will increase its value. For many prospective homebuyers, security is a determining factor in their property buying decision-making process. A security system will make the home more attractive to buyers.
Timers on lights
An added security feature is timers that turn the lights on during the evenings - this will give the appearance that someone is home while conserving energy during the day time. Ideally, there should be sufficient lighting for both the interior and exterior of the home, as a poorly lit exterior will allow criminals the comfort of not being seen by people passing by. Motion activated lighting is an ideal security feature and selling point.
Stage the home
Even though no-one is currently living in the home, it does not need to be empty. A bare home can seem less homely to would-be buyers. During the listing process, the agent will want to take photos of the home’s interior. Ideally, the photos should either be taken with the furniture still in the home before the seller moves out or with a few small choice pieces. The property will appear more homely, and it will prevent criminals who are looking online to see the property as an easy target.
Secure entrances
Securing the entrances refers to more than just locking the doors, it also means closing the windows securely and bolting the glass sliding door. Pay attention to any area in the home that could be used to gain entrance. Extra precautions could include adding deadbolts to all the doors and installing wooden or metal sticks in sliding door tracks.
Don’t leave mail and newspapers outside
Ensure that regular visits are made to the home to pick up mail. Piles of newspapers or an overflowing mailbox are telltale signs that no-one has been home for a while. If it is not possible to pick up the mail regularly yourself, ask neighbours, friends and relatives to help out by stopping by the property occasionally to empty the mailbox. Also, make sure to inform the relevant parties of a forwarding address where mail can be diverted – this will eliminate the chance of an overflowing mailbox.
Maintainance of the home’s exterior
Overgrown shrubbery and an uncut lawn are another tell tale sign that the home is not inhabited. Even though no-one is currently living in the property, it stills needs to be regularly maintained. A well-maintained home with curb appeal is evidence that the home is often visited. Not only will maintaining the home deter trespassers, but it will also make the home more attractive to prospective buyers.
Goslett concludes that while selling an uninhabited home can be a daunting task, using the above tips will help to ensure that the process is as hassle-free as possible. Using an experienced real estate professional from a reputable brand will also expedite the process and ensure a quick and seamless sale.

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Defects to look out for when buying a homeMon 14 Aug 2017

Defects to look out for when buying a home

Irrespective of whether you are an experienced property investor or a person getting into the market for the first time, purchasing a property is a major investment that should be considered carefully, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
“Buying a property can have a major impact your financial well-being, so it is vital to look past the cosmetics of the property and get down to the integrity of the components that make up the property. On the surface, a home could be stunning, but there might be underlying issues that, if overlooked, could cost you a lot to repair. Although sellers are required to provide you with a list of defects that they are aware of, it is best to be aware of certain aspects when viewing a property,” advises Goslett.
Here are a few elements to look out for:
Rotting wood
If not maintained properly, wood that is often exposed to moisture, such as in kitchens and bathrooms, will rot over time. The wood should be painted or treated with a finish that is specifically designed for this purpose. Wooden exterior features such as decks or trims should also be checked as these will be exposed to the elements.
Hazardous railings
From a safety perspective, ensure that all railings on decks, staircases and balconies are attached securely and that none are missing. Unstable or insecure railings can be very dangerous.
Ventilation
Adequate ventilation is required to ensure that any moisture in the home can evaporate. When water or moisture sits in an area for an extended time frame – it can cause issues. The space between the roof and the ceiling is an aspect that should be paid special attention, as the ventilation in this area ensures the longevity of the roof.  Weep holes and ventilation ducts will allow the intense heat in that space to escape, which will promote evaporation of the moisture and ensure that interior walls and structural elements stay dry.
Roofing issues
Look out for any old, broken or missing tiles on the roof that need to be replaced, or rust patches on metal roofs. A damaged or leaky roof will cause issues inside the home, which could be costly to fix – not to mention cost of fixing or replacing the roof.
Drainage and water control
Poor drainage systems around the exterior of the home can lead to water and damp problems in low lying areas around the property. Water logged areas could cause penetrating damp as well as compromise the foundation of the structure if it persists. Water intrusion can be one of the most destructive and expensive problems.  Ensure that all drainage areas are properly graded and direct water away from the house. Also, check that water control elements such as gutters and downspouts are well-maintained.
DIY repairs
Not always an easy thing to spot, but often homeowners who have lived in a home for an extended period will have attempted to make some repairs themselves.  Check the plumbing, and electrical areas as these are the areas where DIY repairs are most common.
“If you are not sure of anything, have a professional inspector look at the home to provide you with feedback before signing on the dotted line,” Goslett concludes.

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Financial blunders to avoid when buying a homeFri 04 Aug 2017

Financial blunders to avoid when buying a home

While setting enough money aside for a deposit for a home is in itself a financial feat of epic proportion, it is not the only financial consideration that would-be homeowners need to make when preparing to dip their feet in the market.
According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, having savings set aside is a vital element for homeownership preparation. However, there are also several financial blunders that potential buyers can make, which will complicate their prospects of being able to purchase a property. “If you want to give yourself the best possible chance of success when applying for a bond, you need to avoid certain financial missteps during your home buying journey,” Goslett adds.
He provides buyers with a few things to avoid:
Avoid letting your credit score drop
According to Goslett, there are two main reasons that a favourable credit score will help. The first is that is will improve your chances of bond approval, and the second is that it will impact on the interest rate the bank is willing to give on the loan. Any late payments on credit accounts will hurt your credit score, so it is important that all payments are made on time.
Stay away from additional debt
“During the home buying process, it is also best to avoid applying for additional credit such as store accounts or credit cards, as multiple credit enquiries will have a negative impact on your credit score. You should ideally focus on paying down any existing debt to around 30% or less of the limit and correct any errors on your credit report,” says Goslett.
Consumer debt accounts for a large percentage of a buyer’s credit score. While a late payment on any consumer debt will have a massive effect on a credit score, the type and the time since the last late payment also matter. “You should pay off any accounts that are due, before applying for a home loan,” advises Goslett.
Avoid the urge to splurge
During the home buying process, don’t go on any credit-driven retail splurges or buy any big-ticket items such as a car. Purchasing large items on credit before applying for a bond will reduce your chances of approval, as well as the amount that the bank is willing to give them.
Even if you purchase a big-ticket item with cash, it can raise flags with the lender.  Large withdrawals from your account might require an explanation during the bond approval process.
Don’t change jobs
Lenders prefer applicants who have a steady, stable income and they take the length of employment into account. “Financial institutions like it if you have a stable employment record with at least six to twelve months or more in the same job with a regular income,” says Goslett. “If you are considering a change in career and buying a new home, you should put one decision on the backburner for the time being. Either hold out of changing jobs or buying the property.”
Don’t buy to the max of your limit
While tempting to look for a property at the full limit of what the bank is willing to give, if it is not what you can comfortably afford, it is not a good idea. The home loan repayment is not the only monthly expense that needs to be taken into account. Try to stay within a price bracket where you can comfortably manage the monthly bond payment and have something left over. By looking at homes below your maximum limit, you will also be able to compete with other buyers in a multiple-offer situation.
“Avoiding these mishaps will help you to prepare for home ownership financially.  Being equipped and prepared is the first step to achieving your  goals,” Goslett concludes.

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REMAX named top Global real estate franchiseThu 03 Aug 2017

REMAX named top Global real estate franchise

RE/MAX NAMED #1 GLOBAL REAL ESTATE FRANCHISE BY ENTREPRENEUR MAGAZINE
2017 Top Global Franchises Ranks Franchisors for Worldwide Appeal
RE/MAX is once again the top real estate franchise in a survey released by Entrepreneur magazine. RE/MAX ranked 11th overall in the publication’s 2017 Top Global Franchise list of 200 brands, based on data submitted for the Franchise 500.
 “RE/MAX continues to lead other real estate brands in annual surveys compiled by Entrepreneur magazine,” said Chris Pflueger, Vice President, Business Development, RE/MAX, LLC. “From the Franchise 500 to the ‘Top Global Franchises’ list, RE/MAX outperforms its competitors. Our unmistakable business model of putting agents first enables us to grow our brand around the world strategically.”
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that the tried and tested business model of the brand continues to prove itself in regions around the world. “RE/MAX provides entrepreneurially-minded individuals with the opportunity to be in business for themselves, but not by themselves. Real estate professionals can enhance their businesses with the guidance and backing of an international powerhouse,” says Goslett.  
 Highlights of the “2017 Top Global Franchises” list:
• RE/MAX is the #1 real estate franchise
• RE/MAX ranked #11 overall
• RE/MAX ranked alongside universally known brands like #8 KFC, #9 Pizza Hut
and #10 H&R Block, and ahead of household names such as #12 Papa Johns, #15
Baskin Robbins and #17 Hilton Hotels and Resorts
The “Top Global Franchises” list is a variation of the magazine’s annual Franchise 500® survey, the oldest and most comprehensive franchise ranking in the world. For the Global rankings, the Franchise 500 formula is adjusted to give extra weight to international size and growth. Other areas evaluated include costs and fees, franchisee support, brand strength and financial strength and stability.
In January, RE/MAX once again held the top position among real estate brands in the Franchise 500, ranking #10 overall. It marked the 14th time in 18 years that RE/MAX has been the top franchisor in the real estate category.
Entrepreneur magazine also recognised RE/MAX in its “2017 Top Fastest Growing Franchises” rankings. RE/MAX was the only real estate brokerage franchise that qualified, taking the 15th spot overall. It was the fourth consecutive year RE/MAX was included in the annual list of fast-growing brands.
RE/MAX now has over 30,000 agents outside the U.S. and Canada. In 2016, the franchisor’s agent count outside the U.S. and Canada grew 16.9 percent.
With a presence in over 100 countries and territories, the RE/MAX network’s global footprint is unmatched by any other real estate brand. Nobody in the world sells more real estate than RE/MAX, as measured by residential transaction sides, and more than 110,000 agents worldwide are a part of the RE/MAX network.

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When does an offer to purchase lapse?Fri 28 Jul 2017

When does an offer to purchase lapse?

Buyers who have found the right home will be eager to know whether their offer will be accepted by the seller or whether they need to keep looking. Being in a state of limbo can be frustrating, which brings about the question - once an offer has been made, how long does it remain a valid offer before it lapses? According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, before it has been accepted, there are four scenarios in which an offer would lapse. He expands on each below:
Lapse in time
On a standard Offer to Purchase document, there is normally a blank section where the prospective buyer can state how long they are prepared to leave the offer on the table. The seller will have until the specified date to accept the offer that the buyer has presented, after which it will lapse. “However,” says Goslett, “there are instances where no date has been specified.  In these cases, the offer will lapse after what is deemed to be a ‘reasonable period’. What is considered to be reasonable will depend on the circumstances of each party within the agreement. Ambiguity could cause conflict down the line, so it is best to have a clear date specified in the document.”
The offer is revoked
Once an Offer to Purchase is signed by the seller, it immediately becomes a legally binding sales agreement. However, before the seller accepts the offer, it can be revoked by the buyer, provided it has not been stated that the offer is ‘irrevocable’ for a certain period and it must be brought to the seller’s attention within that time frame.    
The seller rejects the offer
The offer ceases to exist with immediate effect if the seller rejects it. The seller will not be able to go back on their decision and accept the offer once they have rejected it. According to Goslett, if the seller counters the buyer’s offer, it is considered to be a rejection of the buyer’s original offer. “If the seller crosses out the amount the buyer has written in the offer and writes in a higher amount and initials the change – it is considered a counter offer,” Goslett explains. “If the buyer decides that the amount is too high and does not accept the counter offer, the offer lapses. The seller will not then be able to accept the buyer’s previous offer – a new agreement will have to be drawn up.”
Death of either party
If the buyer or seller dies before the offer has been accepted, it will automatically lapse. However, in the instance where the offer has been signed and accepted, all rights and duties arising from the contract will be passed to the deceased estate.

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What agents consider when setting a priceThu 27 Jul 2017

What agents consider when setting a price

Although there is a vast amount of information available to homeowners online, there is currently no site or programme outside of the real estate profession that can accurately evaluate a property. While homeowners can draw conclusions based on the information that is available, to set the right market-related value, requires specific area knowledge, an understanding of the conditions surrounding the market and insight into the mind of buyers.
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that there several influences that affect property pricing, which is why setting a fair market price takes more than an online search. “Homes could offer similar features and be situated in the same neighbourhood, but distinguishing aspects could have one valued at a higher than the other. Determining the right asking price can only be done if all the influences are considered and weighed in,” Goslett explains. “An experienced, real estate professional who markets homes in the area will be a valuable tool in finding the right price to list the property.”
Why is the listing price so crucial? A home that is perceived to be overpriced will be overlooked by buyers and will sit on the market for longer than necessary. Studies reveal that the longer a home is on the market, the wider the gap between the original listing price -this is because the listing becomes stale and buyers start to question why it hasn’t sold. On average, a home priced at around 10% above its market-related value is much less likely to sell within its first month on the market, compared to a home priced within 5% of its market value.   
So what are the aspects that agents consider when determining the right, most competitive asking price for a home?
Past sales
Looking back is sometimes a great way to determine what is ahead. Reviewing the sales history of an area over the past six months will provide the agent with insight into what buyers are prepared to pay for homes situated there. Time homes spent on the market is a consideration, along with the gap between the initial asking price and the eventual selling price.
A comparative market analysis (CMA) is the accepted method of accurately determining a property’s value. Information and statistics are gathered from various sources and compiled together to find the average price per square metre of property in the area.  By determining the square metre pricing, the agent can compare apples with apples. Once this base is found, it is easier to give an accurate appraisal of the property, taking into consideration any other factors that might have an affect the properties exact value. These factors would include the condition of the property and its size, security features, finishes and fixtures, and any other features that could set the house apart from others in the areas.
Market trends
While certain elements such as interest rate decisions, access to finance, government policy and unemployment will impact the property market throughout the country; there are specific aspects that impact micro markets in particular areas.These aspects could include new companies moving into the area or plans for improving local amenities such as parks or shopping malls.  Agents will look at the unique elements affecting the neighbourhood and consider the influence this will have on the perceived value of property. Both the wider general influences and localised factors will have an impact on home’s potential perceived value among buyers.
The neighbours
A home’s perceived value has a lot to do with its location and the homes that surround it. While a home in the same neighbourhood - approximately the same size and age - could have recently sold for a high price, if the seller’s home is surrounded by run down homes or noisy neighbours they may not have the same fortune. Unfortunately, it is largely out of the seller’s hands, but the neighbouring properties can have an influence on how buyers value the home. Conversely, while bad neighbours can have a negative effect, if the grass is in fact greener on the opposite side of the fence, it can have a positive impact on the value of the home.
The sweet spot
Listing the home at a price that is ‘just right’ from the outset is key to selling within the fastest time frame and for the best price. Inflating the price will scare prospective buyers away while pricing too low will rob the seller of potential profit.  It all about finding the sweet spot or Goldilocks price.
Goslett concludes by saying that working with a reputable, experienced real estate agent to ensure the home is listed at the correct price from day one, will ultimately make all the difference in achieving the seller’s goal.

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Title Deeds explainedTue 25 Jul 2017

Title Deeds explained

Anyone who purchases a home will need to have the title deed transferred into their name as proof that they own the property. The document acts as proof of ownership in terms of the Deeds Registries Act 47 of 1937, with each property required to have its own separate deed. The document contains all the necessary details and important information about the property such as a comprehensive description and exact size.
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that the Title Deed also provides vital insight into to a properties history, registered owner and previous owners, the purchase price paid by the current owner and some other information elements such as the rules and restrictions surrounding the property.  “By reading the Title Deed on a property, a prospective buyer will also know if there are any conditions applicable to the zoning, use or sale of the land, along with all real rights registered in respect of the property. All of these aspects can have an impact on the value of the property and should be considered. Before signing any Offer to Purchase on a home, buyers should carefully read through the Title Deed to ensure that they are fully aware of all the details pertaining to the property,” adds Goslett.
The owner of an immovable property will only receive the original Title Deed once they have paid off the home in full. However, if there is a bond registered on the property, the bank keeps the Title Deed in their custody until the home loan is paid off.  “If the purchase of a home was financed by a bank, they are legally entitled to keep the Title Deed because it is their money that bought the home and they have a vested interest in the property,” says Goslett.
He notes that while the bank that holds the bond over the property will have the original Title Deed in their possession, the homeowner or agent marketing the home should have a copy that the buyer can read through. Alternatively, buyers can access the information directly by obtaining a copy from the Deeds Office. There are several Deeds Offices throughout the country, each handling a particular area of jurisdiction. A copy of each Title Deed is held in a Deeds Registry at the Deeds Office within the closest proximity to where the property is located. The Deeds Registry is open to any member of the public who requires access to information. However, each enquiry will come at a nominal cost.  
Goslett says that most real estate professionals will have access to deeds information through a computer-linked facility at their office called Deedsweb, which is the National Department of Rural Development and Land Reform’s official site for the supply of deeds registration information. Every Deeds Registry is connected to the network which contains all Title Deeds registered from 1980.

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Some light at the end of the tunnelThu 20 Jul 2017

Some light at the end of the tunnel

While the Reserve Bank had said it had come to an end of its hiking cycle, few would have predicted a cut in the rates this year.  In fact, a cutting cycle was only expected in 2018 However, South African Reserve Bank governor Lesetja Kganyago, announced today that the interest rate would decrease by 25 basis points, bringing the repo rate down to 6.75% and the prime rate down to 10.25%.
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that the decision to lower the rates will bring much-needed relief to homeowners and consumers who are still coming to terms with the continued rising cost of living. However, whether the rate cut will stimulate the property market will remain to be seen. He notes that uncertain policy and the recent credit downgrades have negatively impacted consumer confidence which has slowed the market in most areas throughout the country. Goslett says that a slower economy and rising unemployment rate has also played a role in the property sector, resulting in the decline of freehold property prices.
“During the second quarter of the year, the average price of freehold property declined from R1 161 481 to R1 139 604. The muted inflation of freehold homes can be largely attributed to the slower South African economy and rising unemployment rate. The unemployment rate in South Africa is currently at 27.7%, the highest it has been since 2008. The struggling economy and significant unemployment rate poses a threat to household income growth and erodes affordability. In turn, demand for property is constrained which negatively affected property prices,” says Goslett.

 

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Tools that every homeowner needsTue 18 Jul 2017

Tools that every homeowner needs

Becoming a homeowner is a milestone that many aspire to, however owning a property comes with a few additional responsibilities, like home maintenance. Why is maintaining a home so important? “For two reasons,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, “the first reason is to protect the value of the home, and the second reason is to ensure that the occupants of the home remain safe. Staying on top of things with minor fixes will help you to avoid big problems further down the line.”
He adds that while home maintenance is a necessary element of owning property, it does not have to cost the homeowner a lot of money, especially if they have a reasonable amount of know-how and some basic but vital tools around the house. “There are some tools that are an absolute necessity in every household. Tools that will assist homeowners in taking care of general, basic maintenance jobs that might be required of them,” says Goslett.
Here is a list of some very helpful tools that should be kept in the home:
Screwdrivers
Whether tightening a loose fixture, removing a light covering, assembling a new piece of furniture or replacing a light bulb – new homeowners will soon find out that there are very few maintenance tasks that don’t require a screwdriver. At some stage, every homeowner will need to use a screwdriver, making it an essential household tool. Ideally, homeowners should have an array of different sizes of both flathead and Philips-head screwdrivers. While a reasonably inexpensive tool, it will soon be regarded as a must-have item that the homeowner can't do without. 
Hammer
Another staple in a homeowner’s maintenance arsenal is the hammer. A good hammer will come in handy when hanging picture frames or photos. When considering purchasing a hammer, the best and most versatile option is one with a claw head and anti-vibration rubber grip.
A spirit or wall level
It is far easier to hang a shelf or artwork on a level plane with a spirit level as a guide. While an experienced eye will be able to hang items fairly well, a wall level takes the guesswork out of the job and ensures that the piece of art or shelf is perfectly even on the first try.
A utility knife
Also known as a Stanley knife or box cutter, a utility knife is great for moving home and opening well taped-up boxes. Most utility knives will have a retractable blade so that they can be stored or carried safely.
A putty knife is another excellent knife to have in the house, as it is the ideal tool for replacing a broken window pane – an absolute necessity for families with small boys.
Measuring tape
Often homeowners need to know how big a certain area in the home is before they purchase an appliance or item of furniture. Having an accurate way to measure the space will save a lot of frustration. A measuring tape is an ideal tool to make sure that homeowners don’t purchase an item that doesn’t fit in the intended space.
Measuring tapes come in various lengths from three metres upwards. While a 3-metre tape is perfect for most jobs around the home, a 5-metre or 8-metre measuring tape will allow homeowners to measure larger spaces in a shorter time.
Flashlight
Whether it's dealing with a power cut or trying to find something that has fallen into a dark space, a durable, good-quality flashlight, as well as extra batteries, is a must for every household. If not finding your way around the house during load shedding, a flashlight is also extremely handy when working on repairs in tighter and darker areas around the home. While more expensive from the outset, hybrid flashlights that use solar power or are rechargeable will save the homeowner on batteries over the long term.
An adjustable wrench and pliers
Owning an adjustable wrench means being able to tackle several maintenance jobs with only one tool. Pliers are also a must-have for every homeowner – the best option is a pair that has serrated jaws offering a better grip.
Toolbox
Lastly, a homeowner will require somewhere to keep the tools, such as an easy-to-carry toolbox. Keeping all the most-commonly-used tools in one place makes them easier to find and store.
Goslett concludes by saying that being prepared and owning the right tools, will make any maintenance job far easier to handle.

 

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Tenants - Are you creditworthy?Mon 17 Jul 2017

Tenants - Are you creditworthy?

In South Africa’s highly competitive rental market properties are in high demand and short supply. With economic uncertainty and the rising cost of living placing pressure on consumers, many have put their homeownership aspirations on the backburner and are opting to remain in the rental market for the meanwhile. As a result, demand in the rental market has continued to increase, making it more and more difficult for tenants to find a suitable rental property.

Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that the competition for rental property coupled with changes in legislation has led to landlords and rental agents scrutinising each potential tenant, which has also made it harder for tenants to find a rental property.  “The Prevention of Illegal Eviction and Unlawful Occupation of Land Act 19 of 1998 (PIE) and the Consumer Protection Act 68 of 2008 (CPA) have made it more difficult to evict tenants, even those who default on the rental payment. As a result, landlords and management agents have introduced more stringent screening criteria to ensure they select the right tenant from the start. In today’s market, the creditworthiness of a tenant has become more important with landlords starting to check credit reports to establish whether the potential tenant has a clean credit history,” says Goslett.

While once reserved for those looking to purchase a home, being creditworthy is just as important to tenants in the current market. “Much like a bank will run credit checks before they approve a bond, landlords and letting agents are also running checks because they want to make sure that the tenant they select is both willing and able to time their bills on time,” says Goslett. “Regardless of whether the tenant has a high income and the money to pay the required deposit – a clear credit record is a must.”

According to Goslett, a favourable credit score and clean credit record is a valuable asset when applying for a rental property. Each year consumers can obtain a free credit report from the credit bureaus within the country to assess their financial position. He notes that it is advisable for tenants to know your credit score and check your credit record for any inaccuracies.  

“Any missed, or slow payments will have a negative impact on a consumer’s credit score. However, it is also important to be mindful of the less obvious credit infractions such as opening too many accounts, numerous credit enquiries, co-signing for a third party or only paying the minimum required payment. All of these things will impair your records and could scare off landlords,” Goslett explains.

He provides prospective tenants with tips to avoid adverse information on their credit history:

  • Read all clauses before signing a contract with a creditor
  • Make regular payments to creditor by the 7th of each month
  • Keep a list of all creditors, the basis of credit and amount to be paid
  • Keep a record of all payments made to creditors
  • If you relocate, notify all creditors of the change of address
  • Attend to all correspondence from creditors or their legal representation

Tenants can get a free credit report from the following sites:

www.transunion.co.za

www.experion.co.za

www.xds.co.za

www.compusan.co.za

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The four don'ts of listing your homeTue 11 Jul 2017

The four don'ts of listing your home

Just as most people require assistance when navigating the property purchasing process, the same can be said about those who find themselves listing their first property. “There is a lot to consider,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, “which is why it is best to bring on board an experienced real estate professional who can assist with pricing the home correctly and marketing it to the right target audience. Together with an agent, sellers can work through the process of listing their home and achieving the best possible price in the shortest possible time frame.”
He adds that as sellers tick off items on their property listing to-do list, it is also important for them to consider the things they should avoid when placing their home on the market.  Goslett provides four things in particular that sellers should avoid when listing their home:
Don’t make too many improvements
Preparing the home for sale and ensuring that it is in good condition will improve the seller’s chance of selling the property and increase their possible return on investment. Updating certain aspects and replacing anything that is broken is a great idea. However, it is important not to over improve or make improvements that are extremely specific to a certain taste. Not everyone wants a home gym or built-in bar. It is best to stay neutral and make improvements that will appeal to the greatest number of people.  
Avoid over-decorating
When it comes to decorating – less is more. Much like over-improving, over-decorating should be avoided. Stick to a simple decorating style that is universally palatable. Steer clear of adding too many items to a room, as it will make a space appear smaller and cramped. If the home is not cluttered, it leaves the focus on what’s important – the home’s features.
Leave the showing to the agent
If the agent calls to say they are bringing a prospective buyer to view the property, while not always possible, it is best to be out of the home. Buyers want to imagine themselves living in a home; this isn’t easy if they are constantly confronted with the seller.  Having the seller and their family at home can make it uncomfortable for buyers to view the home. If getting out of the house isn’t possible for whatever reason, at least sit outside to give buyers the opportunity to envision themselves living in the space.
It’s not personal
After living in a home for some time, it is natural to be emotionally attached. It is easy to get wrapped up in the fact that many memories have been built up in the home, however, while these are heartfelt stories, they will not win over buyers. It is important to bear in mind that buyers won’t be viewing the property with the same emotional response. While it can be difficult at times, it is best not to take things personally.
“Avoiding these don’ts will help to ensure that the process of listing a home is less stressful and a far easier procedure to handle,” Goslett concludes.

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Pros and cons of solar panelsMon 10 Jul 2017

Pros and cons of solar panels

As residential electricity tariffs continue to increase and place financial pressure on South African households, many are looking at alternate power sources, such as solar panels, in an attempt to reduce their household electricity consumption.
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that the more electricity a household uses, the more it is charged per unit of electricity. Because of this, there is a growing trend of households introducing energy-efficient elements to curb their energy usage and overall cost of running the home. “While the concept of ‘green energy’ is not new, the growing cost of electricity has led to consumers becoming more conscious of the energy they use. A study conducted by the National Association of Home Builders (NAHB) revealed that apart from a safe neighbourhood, the factor that influenced home-buying decisions the most was a home’s energy efficiency,” says Goslett.
He notes that elements such as solar panels have become increasingly more popular with the energy-efficient movement gaining momentum. However, Goslett says that there are a few pros and cons that homeowners should consider before they go ahead with adding solar panels to their home:
Pro – Reduce utility bill
It goes without saying that using power generated from the sun will reduce the amount of electricity used from the main power grid, which will reduce the household’s utility bill. In most cases, solar panel systems save between 50% and 75% of an electricity bill. The money saved can go towards paying the solar panels off or other household expenses.
Con – The upfront cost
Even though solar panels have become more affordable over the years, the initial upfront cost of installation can be expensive, and it could take some time for the system to pay itself off – typically around seven years.
Pro – Increases value of the home
Energy-efficient elements add value to a home, and a large percentage of the initial outlay of such elements is recouped when the property is sold. “According to the NAHB, approximately 61% of homebuyers would be prepared to pay an additional R50 000 to R100 000 on a home that had features which would reduce utility costs,” says Goslett.
Con – Won’t work on every roof
There are some roofing materials, particularly in older homes, that make it difficult to install solar panels such as slate tiles. There is also the matter of available space on the roof, many homes have limited clear space to fit the solar panels.
Pro – Reduced carbon footprint
Although going green will save money on utility costs and add value to the home – the financial aspect it is not the only reason. It is also about sustainability and reducing the household’s effect on the environment and its surroundings. Generating energy from fossil fuels emits harmful carbon dioxide and methane which contributes to global warming – using solar panels for power does not. Solar power also doesn’t require water to process, while other energy sources do.
Con – Maintenance
As with all household elements, solar panels require upkeep and maintenance, which come at an additional cost. The solar panels will need to be cleaned, repaired when necessary and insured.  
“For the right home, installing solar panels could provide a sustainable method of reducing both their energy cost and impact on the environment,” Goslett concludes.

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Landlord is selling - what are my options?Fri 07 Jul 2017

Landlord is selling - what are my options?

If a landlord decides that they would like to sell their rental property, do tenants have to move out? According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, the law does not prevent a homeowner from selling their property while it is being rented out to a third party. However, the lease agreement precedes the sale. “Essentially this means that the tenant can remain in occupation of the rental property until the lease agreement lapses,” he adds.
While there is no obligation for the tenant to move out of the property, the change in ownership could bring about anxious feelings at the prospect of having to deal with another landlord or the renewal terms of the lease with the new owner. There is also the matter of the new owner's intentions. If the home was not purchased as an investment property, but rather a primary residence, the new owner will not want to renew the lease as they will want to take occupation as soon as possible.
“Instead of waiting out the lease, some tenants may want to find alternative accommodation sooner rather than later. If this is the case, they will need to read through the lease agreement to see what it says about early termination. It is possible for there to be a sales provision made in the agreement for such a situation,” says Goslett. “If agreed upon at the signing of the lease, there might be a stipulation giving the tenant the right to cancel the contract should the property be sold.  If these are the terms and there is mutual consent, the tenant is absolved from any penalties that may arise due to a breach of the agreement.”
If no such sale stipulation exists, then all terms and conditions of the lease before the sale of the property will be carried over to the new owner, making it far more difficult to get out of for the tenant. The lease agreement will remain in effect under the new landlord, and the tenant will be obligated by law to respect the stipulated terms, as will the new landlord.
If the tenant decides to leave before the lease ends, they will be regarded as being in breach of the contract and could face paying a penalty of some kind. “An investment buyer may have purchased the property with the intention of retaining the tenant. In this situation, they will be less likely to release the tenant from the lease agreement,” says Goslett.
Regarding the Consumer Protection Act (CPA), a fixed term contract within the fixed term can be terminated early on the condition that the new owner is a supplier who lets property in the ordinary course of their business. Section 14 of the Act regulates these matters.  In these circumstances, a tenant can give a 20 business day notice period during the term of the lease. However, they would then be liable for the notice month and possibly a reasonable penalty fee. It is important to bear in mind that if the landlord and tenant are both juristic persons, the CPA cannot be applied.
“Before making any decisions regarding cancelling the lease agreement, tenants should discuss the matter with the new landlord. Communicating will ensure that both parties are on the same page and will help put certain issues to rest. There could be little or no need for concern. The sale of the property might only take place after the lease agreement has expired, or the new landlord may be better than the current one,” Goslett concludes.

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How to get over the one that got awayThu 06 Jul 2017

How to get over the one that got away

You finally find the ideal home that you have been looking for, complete with all the features you have always wanted, from the right kind of countertops to the right size garden and everything in between. You envisage all the good times you are going to have in your new home while signing an offer to purchase - but fate intervenes. Whether it’s a more attractive offer from a competing buyer or a seller that changes their mind and decides to stay – the deal falls through.  What now? How do you recover?
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says just because a buyer may have missed out on one home it doesn’t mean that they should give up hope and stop trying. “If a home is well looked after and priced correctly – it will attract attention from multiple interested parties. While this is great for sellers, only one buyer will be successful in securing the deal, which may mean many walking away disappointed. If buyers are persistent and patient, they will have more chances of finding a home that suits their needs,” says Goslett.
He provides buyers with a few tips to deal with the disappointment and keeping going:
Get back in the game
If you are going to sit around and think about the one that got away, don’t do it for too long. Perhaps a quick toast to what could have been, and then get straight back to the search. Things move fast in today’s property market, so there is no time to waste on something that will never be. While you are sitting on the sidelines, opportunities at finding an even better hope are passing by.
Don’t dwell on one dwelling
We all know the adage - “there are more fish in the sea.” The saying rings true in the housing market. Don’t dwell on just one dwelling – remove the listing that got away and move forward. Delete any photos you took of the property during the viewing and do your best to not compare new homes with the one you lost. There are many homes out there with lots of new possibilities, so keep an open mind.
Don’t rush in and settle
Don’t let being despondent and frustrated push you into a rushed property purchase. Some buyers may be inclined to buy the next available property within their budget just to get the process over with, which is not advised. Rather stay true to your list of wants and needs. While certain elements could be compromised on, it is not good to completely abandon your idea of the ideal home.
Relook at the budget
Take a step back and re-evaluate your budget. Is there a difference between what you can afford to spend and what the homes you have been looking at are selling for? Perhaps you need to save up a bit more to be more competitive when making an offer? Alternatively, it might be a matter of looking at a less expensive neighbourhood to find a home that has everything you want. Either way, this is a great time to reflect and regroup.
Talk to your real estate agent
Your agent will be able to provide some valuable advice on surviving the highs and lows of your real estate journey.

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National Housing Report 2017 – Q2Wed 05 Jul 2017



Deeds Office statistics reveal that in the second quarter of this year, 35 637 bonds were registered, with an average bond amount of approximately R1 033 000. The number of bonds registered increased by 549, while the average bond amount increased by R6 000 when compared with last quarter's figures. Approximately 51 515 bonds were cancelled during the same time frame.
Average freehold price softens
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that while the average price of a sectional title unit increased from R944 008 to R948 176 during Q2, the average price of freehold property declined from R1 161 481 to R1 139 604. He adds that the muted inflation of freehold homes can be attributed to the slower South African economy and rising unemployment rate which is impacting the property market.  According to Stats SA’s Quarterly Labour Force Survey (QLFS),  during the first quarter of the year, unemployment rose to 27.7%, the highest it has been since 2008. Goslett says that the struggling economy and significant unemployment rate poses a threat to household income growth and erodes affordability. In turn, demand for property is restricted which negatively affected property prices.
Goslett says that since the beginning of April up until the end of June, around 28 127 freehold homes have been sold, of which 4 086 are first-time registrations, with the remaining 24 041 repeat sales. During this time frame, 14 807 sectional title units were sold, as well as 6 260 homes within estates. Regarding sectional title sales, only 136 transactions were first-time registrations.


Affordable housing continues to lead the market
Once again data from Lightstone, a property information and statistic provider, revealed that the largest amount of sales traffic in the property market was from homes priced below R400 000. Based on developed home sales, this price bracket accounted for 26.52% of property sales in the second quarter of this year. “With a large percentage of the population falling into the affordable housing market, transaction volumes within this segment of the market continue to outperform all other sectors,” says Goslett.
Other pricing sectors
Properties priced between R400 000 and R800 000 accounted for 25.42% of the sales, while those priced between R800 000 and R1.5 million made up 26.13% of the country’s home sales in the last three months. Homes priced from R1.5 million to R3 million represented a 16.17% share of the market, while properties with a price tag above the R3 million mark, accounted for just 5.76%.
Homeowners downscaling
Goslett says that a trend developing in the market is that many high-end property owners are selling their luxury homes to purchase smaller more affordable properties – possibly another reason for the decline in the average freehold price. Lightstone recently reported that over the last 12 months house price inflation in the luxury band, which is considered homes with a selling price of R1.5 million or higher, has declined.  In contrast, the mid-value segment (R250 000 to R700 000) of the market saw an increase in inflation from 4.67% to 7.07% within the same period.  “The irony is that as the demand for higher-end properties decreases, so will their prices. Likewise, the increased demand for mid-value properties will push up the prices, making them more expensive,” says Goslett. 

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Security a driving factor in rental marketTue 27 Jun 2017

Security a driving factor in rental market

Security has been a major influence in property buying decisions, with South Africans among the most security-conscience home buyers in the world. However, what about the rental market, is security as important?
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that due to financial and various other reasons, a large portion of the population remains in the rental market. Just because they do not own the property they are living in, does it means that safety will be any less of a factor?  “Of course not,” he says, “whether a tenant or owner, security is a top consideration which is impacting both sectors of the market.”
He adds that where the challenge comes in is that while rental properties can be more cost effective and are less responsibility than owning, tenants are restricted in what they can do to the property themselves. “Because of this, tenants should inquire about the security features a property has before they commit to signing a lease agreement. It might be difficult for tenants to get the landlord to upgrade the security after the fact,” says Goslett.
He notes that while landlords have a responsibility to ensure that the property is in good condition and well-maintained with reasonable security precautions such as door and window locks, landlords are not required to provide any additional security. “If there is a particular property that the tenant would like to rent, they could request permission in writing to install additional security features at their own cost. It is possible that the landlord may pay a portion of the upgrade, as it will increase the value of the home, along with the future potential rental income,” says Goslett.
Before searching for a property to rent, tenants should have an idea about their security criteria and type of property they want. “While sectional title properties are perceived to be a safer than stand-alone homes, they are not untouched by criminal activity.  Security goes beyond the property itself,” says Goslett.  He adds that if the rental property is within a sectional title complex, the tenant should find out about the security features of the complex as a whole, such as access control, security guards on site or patrols. There might be cameras or surveillance of some kind, which will vastly increase the security of the development.
Goslett says that tenants should ask whether access codes or door locks are changed once tenants move out of the rental property. Another aspect to consider is the lighting surrounding the property - dark areas make it easier for intruders to approach and gain access unnoticed.  Outdoor floodlights can mitigate the risk to some degree, and motion-sensor models are a value-for-money, effective option. The exterior is not the only place that requires good lighting. Goslett notes that a lighting timer for inside the home can create the illusion of someone being home even when the tenant is travelling.
As an extra safety precaution, tenants should check whether there are fire extinguishers and where the fire escape stairs and exits are.  Another important aspect to consider is the parking area and access from the property to where the car is parked - check whether the area is well-lit and if there is a garage to park the car in.
In conclusion, Goslett says that tenants should only sign a lease agreement and move into a rental property once all their security criteria have been sufficiently met - feeling safe is an important part of feeling at home.

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Deadly sins of property investmentMon 26 Jun 2017

Deadly sins of property investment

While purchasing investment property can be risky, it can also be a gateway to a future free from financial worry if the right principles are applied, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
“Seasoned real estate investors will have a fairly wide understanding of the market and the property investment game, however, many first-time investors are likely to make the wrong and often costly decisions cutting their teeth. While there are lucrative investment opportunities in every market, investors need to be aware of and steer clear of certain pitfalls that will negatively influence the return on their investment,” says Goslett.
He provides seven deadly sins that property investors should avoid at all costs:
Patience is key – don’t rush in
Property investment takes time and research. It is never a good idea to rush into any property deal without giving it the consideration it deserves. “A hasty decision can cost an investor down the line. Doing research will empower investors with the knowledge they need to make an informed decision. It will provide them with a greater understanding of the market and assist them in recognised an opportunity when it presents itself,” says Goslett.
It is best to shop around and take the time to compare properties in a particular area and then see what other are available on the market. Look at the price of a property and compare this to the value. An estate agent will also be able to provide a comparative market analysis of the area.
Never underestimate location
All property experts agree that location is of prime importance. The reason for this is that location will largely determine a property’s appreciation potential. No matter how amazing a property is, if it is situated in a bad location – it will never fetch a premium price. “Demand drives property pricing, and prime locations are in high demand, which consistently pushes prices up.Therefore, choosing a property is the right location is essential to the success of the investment,” advises Goslett.
He adds that investors should look for areas that are in proximity to a good range of amenities. Areas that consistently show steady growth in value are those that are near to business nodes, transport routes, good schools and shopping centres. While rental income is important, the primary goal should be capital growth.
Don’t assume
Sellers are required to provide a list of defects that they are aware of; however, it is advisable to have a professional home inspector take a look at the property. They will be able to find problems that may otherwise go unnoticed, such as the structural integrity of the property. It may cost money to hire an inspector, but this could save a lot more money for repairs in the long run.
Get help, don’t go it alone
If possible, why not learn from others mistakes, instead of making your own. “Ideally, it is best to find an experienced, successful investor who is willing to be a mentor.  A savvy property investor that has been in the game for some time will be able to show a new investor the ropes and guide them through the process,” says Goslett.
Never forget the budget
Losing track of finances and debt could be one of the deadest investment sins. It is imperative that investors do in-depth budget and cash flow analysis to determine their financial position accurately.  “Investors must know what they can afford and what they can’t, which can be measured by completing a personal cash flow statement,” says Goslett.
He adds investors should compare financing deals from different banks before deciding to secure a home loan, as the even a small variant in the interest rate charged will have a big impact on the investment over the long term.  It is also important to bear in mind that most banks still require a deposit of between 10% and 30% of the purchase price.
Don’t neglect maintenance
Regardless of whether it is a primary residence or part of a rental portfolio, keeping the property well maintained is an essential element of ensuring a good return on that investment.  “Maintenance costs should form part of the investor’s budget and plan. They will also need to ensure they have the time or capacity to manage and maintain the property. With a rental property, a management agent can be hired to ensure all repairs and general management is taken care of,” says Goslett.
Remember to diversify
According to Goslett, when purchasing property specifically for investment purposes, it is imperative to diversify your portfolio as it will minimise exposure to risk. Rather than putting all eggs in one basket, investors should try to buy different kinds of properties in various areas.
He concludes by saying that property investors should learn as much as possible about the environment they are trading in, consult various experts and make use of reputable and knowledgeable real estate professionals to assist them in their investment endeavours.

 

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Listing photos - Make sure they are goodThu 22 Jun 2017

Listing photos - Make sure they are good

According to research, most buyers will start looking for property online before they go to any other source. What this means is that the first impression buyers will have of a home is its online listing photo. Adrian Goslett, Regional Director and CEO of REMAX of Southern Africa, says that this shows the importance of using listings photos that highlight the home’s top features to entice buyers to want to look further.
“An attractive, highly marketable home can be overlooked by buyers if the listing images are poor quality or don’t showcase the property’s selling points. For this reason, it is imperative that listing photos are high-quality images that draw in buyers’ attention and provide them with insight into what the property has to offer.  Buyers are not going to take the time to see the home in person if the are not interested in what the images portray online. Sellers should ensure that they are completely satisfied with the images that the agent uses to market their home,” advises Goslett.
It goes without saying that not every seller will have professional photographic expertise, but most will be able to discern whether a photo is good or bad. Sellers need to look at the photos from a buyers perspective and be as objective as possible. “Ask yourself, if you saw this photo and nothing else, would you want to see more? Are the images enticing or would you scan over it and move onto the next home?”
While the task of taking the photos can be left up to the agent or a professional photographer, Goslett says sellers should ensure that they prepare and get their home ready before it is photographed. He provides a few pointers that seller can use to ensure the images of the home convey the right message:
Ensure the home is clean and tidy
Sellers should look at the photoshoot as a show day and prepare the home accordingly.  Pack away items that are not in use, ensure the beds are made and that there are no dirty dishes in the sink. These things will detract from what’s important and will draw the attention away from the home’s features. If the photos are in high resolution, which is advisable, the photos could reflect evidence of dirt, so the home should be cleaned beforehand. Pay particular attention to reflective surfaces, as these can easily show marks and streaks.
Get rid of clutter
A simple, minimalistic look will keep the focus on the home’s features and not on the seller’s style. Less is more, so if it is possible, remove clutter and any bulky pieces of furniture that can make an area appear smaller than it is.
Take a few test shots
With the advent of digital cameras, sellers can take as many photographs as they need to get the right ones. A good idea would be to take a photo, review it, and then make adjustments if need be.
Pay attention to the interior and exterior
When preparing the home for a photo shoot, don’t just focus all the effort on the inside. Mow the lawn and ensure that the garden is clear of refuse. Pack away any garden tools and toys that may be outside. If possible, it is best if there aren’t any vehicles in the pictures.
The weather and time of day
The ideal time to take a photo of the property would be either early in the morning or late in the afternoon on a clear sunny day. These times of day will ensure that the home is sufficiently lit without having the harsh glare of the midday hours. If the light is too bright, the photos could appear flat or colourless.  If the weather is overcast and rainy, there is the chance that the home could appear very dark and uninviting. Irrespective of whether photos are being taken of the inside or the outside of the home, ensure that the lights on as this will provide extra lighting and enhance the details seen in the photos.
Ideally, use a professional
Although photos taken by the seller or agent can suffice, it is best to get the expertise of a professional photographer.
“Because photos play such a pivotal role in the successful marketing of the property, it’s  worth making sure that the images are of a high quality and standard.  Through the eyes of potential buyers, the photos can impact how the property is perceived and whether they would be willing to take the next step of viewing the property in person. Taking the time and effort to get the images right will pay off and will help the seller achieve their goal of attracting buyers,” Goslett concludes.

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The role of the EAABTue 20 Jun 2017

The role of the EAAB

According to a Homeowner Insights study conducted by Absa and Columinate in 2016, only 16% of people selling their properties trusted their estate agents. Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that a possible reason for this statistic is that there is a lack of proper expectations that are being set out from the beginning of the homeowner’s interaction with the estate agent.
“Estate agents need to be upfront with their clients and from the outset give realistic guidelines and information as to what they can expect from the agent and the sales process.  Also, it is important to take into consideration that of the approximate 40 000 real estate agents operating in South Africa - not everyone can be considered to be a full-time professional agent regardless of their qualifications. The property sales process is complex, and it should be handled by a professional who has the necessary experience to deal the many facets involved,” advises Goslett.
How can estate agents change the perception in the market and build trust with their clients? “It takes a long time to build trust – it is not something that happens overnight. It takes time to build trust, but only one act to break it. For agents to change the perception of them in the market, they need to do what they say they are going to do. If expectations have been established, the agent needs to follow through to ensure that the expectations are met to their client's satisfaction. Agents build up a metaphoric ‘trust bank’ with their clients, making deposits by being trustworthy and a person that sticks to their word,” says Goslett.  
Even if an agent has the right qualification to sell a property, it does not mean that they are trustworthy or reputable. “The agent may be qualified to deal with the complexity of a property sales transaction, but this will not give the seller any insight into whether they are ethical in their business practices. Essentially the only way that a seller will be able to know whether they are dealing with an ethical agent is by contacting their previous clients and references.  As with most services or professionals, the best agent is a referral from a trusted source such as a family member or friend,” advises Goslett.
He adds that while it is essentially the individual agent who needs to ensure that they conduct themselves in an honourable manner, there are measures in place to ensure that their clients are not without recourse if the dealings sour. “Buyers and sellers should only deal with estate agents who hold a Fidelity Fund Certificate, issued by the Estate Agents Affairs Board (EAAB). The EAAB aims to regulate the industry and ensure that consumers are protected in their dealings with real estate agents,” advises Goslett. “The EAAB manages and controls the Estate Agents Affairs Fund, which exists to reimburse someone who, under certain circumstances, has suffered a loss due to their dealings with an estate agent, such as mishandling money that has been entrusted to them.”
If a dispute arises between an agent and their client, depending on the circumstances, the EAAB will set up a mediation to ensure that the matter gets resolved. Many of the agreements that estate agents use when entering into a contract with their client will have a clause that deals with disputes and the procedure that needs to be followed should one occur.  Goslett concludes by saying that if the matter is not resolved by the EAAB, the client still has the option of contacting an attorney and taking legal action.

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Property - Asset or expense?Mon 19 Jun 2017

Property - Asset or expense?

Is property an asset or expense? At first glance, the question seems to be simple to answer, of course, property is an asset. However, there is more to it than initially meets the eye.
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says when looking at a primary residence, the home being an asset will be determined by whether the value of the property is appreciating or depreciating. He notes that there are several factors that will have an influence on the property’s value such as the market, growth in the area and the demand for property in the area. Regarding a second or investment property, whether or not it is an asset will be based on whether it is generating a profit from the income it receives.
“While some people may perceive higher end homes as assets, it is less about price and more about growth in value. Regardless of what end of the scale the home is on if the value of the home is showing growth – it is an asset,” says Goslett.
So how can property buyers ensure that they are purchasing an asset and not an expense? According to Goslett, buyers need to do their research and make the right decision upfront. When selecting a property, there are some aspects that need to be taken into consideration, such as location, which is a key element in the home’s potential for growth in value. “Buyers also need to look at the price of homes in the area and how they have grown over the last few years, as well as any future development plans that may be happening in the area that could have an impact on the property’s value,” he adds.
Goslett says that a great way to assess an area’s potential for future appreciation is by looking at the past and the history of the area. “By looking back, it is possible to some degree to look ahead. Useless there are big changes happening in the area, it is a fairly safe bet to gauge the future appreciation potential of an area based on its past performance,” Goslett explains.
He adds that upgrades to infrastructure or the development of new amenities will positively impact the appreciation potential of the homes in an area. “While it depends on the facility, the introduction of a mall can boost property values in an area as it offers convenience to the residents. However, the shopping mall will only add value to an area if it is a well-run establishment that attracts the right kind of foot traffic,” says Goslett. “That said, I would say schools have a greater influence on property values than shopping malls. Many potential buyers look for a property with education in mind, whether they currently have children or not. Again, how the school impacts on the area is based on the school and its reputation. A good school that offers an exceptional education will increase demand for property surrounding it, which will push property prices up.”
The success of a property investment is based on the decisions made at the start of the purchasing process – not when the property is sold. “To purchase an asset that grows in value over time, buyers need to do their homework and an make informed decision before they put pen to paper,” Goslett concludes.

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