Sellers - How to determine an asking priceTue 09 May 2017

 Sellers - How to determine an asking price
With a mass of information at their fingertips, buyers who are seriously looking at properties to purchase will soon become very knowledgeable about what they can get within their price range. For this reason, it is ever more important that sellers set the correct asking price when placing their home on the market, advises Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. 
“It is important to keep in mind that buyers are comparing each of the properties that they view and a home that has an asking price above the competition will not compare well – especially if it offers the same perceived value. It is imperative that sellers view their home as objectively as possible, taking emotion out of the equation and looking at the facts and figures at hand,” says Goslett. “As a start, it is possible for homeowners to obtain a municipal valuation of their property from the local authority, however, this value will not take into account any upgrades that have made to the home.”
Most sellers believe that a house is worth what they paid for the property as well as the additional cost that they have spent on renovations and improvements. While this is true to some degree, it all depends on a buyer’s perception of how much value the improvements have added to the property. “Upgrades and renovations are all subjective and are often based on personal taste and requirements,” notes Goslett.
He adds that a professional valuer will be able to provide the homeowner with a valuation of their property based on several aspects such as the home’s location, size and square metre pricing for the area. “An estate agent who is a registered valuer will be able to provide sellers with an estimated value of their home by conducted a comparative market analysis. A real estate professional will have access to information that the homeowner won’t, such as the selling prices of other homes in the area over the last six months. This kind of data is very important when determining what buyers perceive as a fair market value within the current market. The agent will base their evaluation on statistics and facts, remaining objective,” says Goslett.
Even with all the information, however, there is no exact science to pricing, and the comparative market analysis won’t include all of the differential features of the property, such as the views from the property, current condition and surrounding amenities. All these aspects must be considered by the agent and seller as they will have an influence on the price of the home. A comparative market analysis is merely the starting point, while the value of the property is fundamentally subjective. 
An element that largely influences the perceived value of property, which is out of the seller’s control, is the current market conditions. “In a buyer’s market sellers will possibly have to lower their asking price to remain competitive, whereas, in a seller’s market with low inventory stocks they will have far more negotiating power. Property pricing is synonymous with demand, and the value of a property is established by the prospective buyer.  What this means is that a home’s value is largely determined by what buyers are prepared to pay for it today,” Goslett concludes.
 
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Compliance certificates explainedMon 08 May 2017

Compliance certificates explained
Putting a home up for sale takes some preparation on the seller’s part, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who notes that they need to have all of their compliance certificates in order before taking the step of listing their home on the market.
He provides some guidance as to which certificates sellers will need to obtain to ensure a smooth, hassle-free property transfer process:
Electrical Certificate of Compliance
Legislation stipulates that every homeowner is in possession of a valid Electrical Certificate of Compliance (ECOC) when selling their home. Valid for two years, an ECOC verifies that the electrical work and installation on the property are up to standard in accordance with the regulations required by the South African National Standards. Goslett says that before the transfer of ownership of a property can happen, the seller will be required to present a valid ECOC.
He notes that an electrical certificate will cover the distribution boards, all wiring as well as earthing and bonding of all metal components, which include antennae’s and satellite dishes. It will also cover the socket outlets, light switches and all isolators for fixed appliances. However, an electrical certificate will not cover any fixed appliances such as the geyser, stove, motors, fans or underfloor heating. 
“Before the home is placed on the market, the owner should have it inspected to ensure all electrical elements of the property are installed and working as they should,” advises Goslett. “Any aspect that does not meet the requirements should be removed or fixed.”
Electric Fence System of Compliance Certificate
In addition to an Electrical Certificate of Compliance, Goslett says that homeowners who’ve had electric fencing installed as a security measure will require an Electrical Fence System Compliance Certificate. It must be noted that an ECOC and Electrical Fence System Compliance Certificate are two different documents. The Electrical Machinery Regulations of 2011 issued under the Occupational Health and Safety Act 85 of 1993, places an obligation on the user of an electric fence system to have an electric fence system certificate of compliance. This requirement does not apply if the system was installed before 1 October 2012. As with an ECOC, this certificate is required where any change to the system has been made or where there is a change of ownership of the premises on which the system exists. The electric fence system must be certified by an approved installer, and the certification is valid for two years. 
Water installation 
In February 2011 the City of Cape Town introduced a new water by-law, which stipulates that a Water Installation Certificate must be provided to the municipality by sellers before transfer. According to Goslett, a Water Installation Certificate is an area-specific by-law that only applies to properties sold within Cape Town or where the City of Cape Town holds jurisdiction.  “Every time the ownership of property changes, a new certificate must be issued,” adds Goslett.
The intent of this law is to limit water wastage as much as possible, an important issue especially now with the recent water shortages and restrictions.  The by-law also protects buyers from latent defect claims and high water bills due to leakages.
This certification checks that the water installation complies with national building regulations. It also ensures that the water meter registers when a tap is open and stops completely when no water is drawn. During the inspection, the inspector will check that rain water is not flowing into the sewerage system and that there is no cross-connection between the potable water supply and any grey water or groundwater system which may be installed.
“Although people may assume that the water installation certificate covers all aspects of the plumbing - it does not. A plumbing certificate and water installation certificate differ. A water installation certificate does not cover any leaks on waste or sewer water or drainage,” Goslett explains.
Gas Certificate of Compliance
On 1 October 2009, Regulation 17 (3) of the Pressure Equipment Regulations (OHS ACT of 1993) came into effect, which states that if a liquid gas appliance has been installed on the property, a Gas Certificate of Conformity is to be issued when there is a change of ownership. This certificate is valid for five years and must be issued by an authorised person who is registered with the Liquified Petroleum Gas Safety Association of Southern Africa (LPGAS). 
The gas certificate ensures that gas components are in a safe, working condition and are leak free. It also certifies that the emergency shut-off valves have been installed in the correct positions. For the gas components to pass inspection, they must be correctly positioned in relation to electrical points, and outside cylinders must be the required distance from doors, drains, windows and electrical appliances.
Beetle Infestation Clearance Certificate 
Although it is not a mandatory requirement, it has become standard practice that a seller provides the buyer with a beetle clearance certificate. In fact, in many coastal areas, a beetle clearance certificate has become a written condition in the sales agreement. 
Beetle certificates are usually not required for sectional title properties, or where the property is situated inland where beetle/woodborer problems are less common than in coastal areas. Banks and insurance companies will request a certificate on transfer if the home is situated in an area known to be infested. 
The beetle clearance certificate is only issued once the property has been inspected for any visible signs of wood destroying insects and deemed to be free of any such insects. The certificate is valid for three to six months. 
 
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How servitude impacts property valuesFri 05 May 2017

How servitude impacts property values
What is a servitude and how can it impact the value of a property? According to property legislation, a servitude is a registered right that someone has over the immovable property owned by another person. The servitude affords the holder the right to do something with the property, even if it may infringe upon the rights of the person who owns it. 
“If a servitude is held on a property, the owner of the property will be unable to exercise their entitlement to the property in the full capacity,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. “The servitude implies that the property does not just serve the owner, but also another property or person. Because of this, the owner’s rights are somewhat diminished. An example of a servitude would be someone having the right to travel over a portion of another person’s property to get to their property. While not commonplace in metropolitan areas, servitudes are common in rural areas with farms and smallholdings.”
In principle, the holder of the servitude has priority. Essentially this means that the owner of the property may exercise all their usual rights of ownership, provided it does not impede the rights of the servitude holder. The owner cannot exercise any rights that are contrary to the servitude, or grant another servitude which infringes the existing one. While the holder of the servitude has the right to perform all acts necessary to utilise the servitude, they must do so in a manner that causes minimal inconvenience to the owner of the property. It is also vital that the burden on the property is not increased beyond the express or implied terms of the servitude.
Goslett says that while it may not be an issue for some, many buyers are turned off by the fact that a servitude is held on a property. As a result, servitude can reduce the demand for a property which in turn can have a negative impact on its perceived value in the market. 
According to Goslett, servitudes are divided into two main categories, praedial and personal. How a servitude is classified depends on whether it benefits successive owners in their personal capacity or if it favours the land itself. “Praedial servitudes are vested in the successive owners of a piece of land, known as a dominant tenement. The piece of land derives a benefit from another piece of land on which the servitude is held. If the land is sold, the servitude will be passed over to the new owner of the land,” Goslett explains. “If the owner of the property on which the servitude is held decides to sell, they are not required to get permission from the servitude holder, however, the new owner of the property will be required to honour the servitude agreement.”
He notes that a personal servitude differs in that it is in favour of one specific person and not successive owners. Once the specified individual passes away or moves on – the servitude falls away. A personal servitude cannot exist past the holder’s lifespan or be transferred to someone else. 
“Buyers who would like to find out whether there is a servitude registered over a property can do so by examining the title deed. Otherwise, they will be able to request that information from the estate agent who is marketing the property,” Goslett concludes.
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National Housing Report 2017 – Q1Thu 04 May 2017

According to Deeds Office data, 35 088 bonds were registered from January to March this year, with the average bond amount at around R1 027 000. It is interesting to note that during this same period the statistics revealed that 45 552 bonds were cancelled.
Average property prices up
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that 29 654 freehold homes have been sold since the start of 2017, with around 15 932 sectional title units sold during the same time frame. He adds that the average price of a freehold property has increased by 5.9% on the price seen during 2016. The current average price for a freehold property is R1 161 481, up from R1 096 487 last year. The average price of a sectional title unit has also improved, however by a far smaller margin of 2.2%. This year the average price of a sectional title unit is approximately R944 008, whereas last year the average price was R923 348.  Goslett says that the higher increase in the freehold property price could be a result of the higher demand for this type of property. 
Affordable housing in demand
Housing statistics from Lightstone, a property information and statistic provider, reveal that the largest amount of sales traffic in the property market was from homes priced below R400 000. This price bracket accounted for 29.60% of property sales in the first quarter of this year. “The data brings to light the high demand for affordable housing in South Africa, a sector of the market that continues to thrive,” says Goslett. 
Other pricing sectors
Properties priced between R400 000 and R800 000 accounted for 26.76% of the sales, while those priced between R800 000 and R1.5 million made up 23.89% of the country’s home sales during the first three months of the year. Homes priced from R1.5 million to R3 million represented a 14.54% share of the market, while properties with a price tag above the R3 million mark, accounted for just 5.21%. “It goes without saying that as the home price bracket increases, the target audience that would be able to afford the home decreases. As the statistics reveal only a small percentage of the population is buying homes for R3 million or more,” adds Goslett.
First-time buyers
Goslett notes that around 8.49% of property transactions in the first quarter of the year were first-time registrations, with the remaining 91.51% repeat sales.  While only a small percentage of sales are first-time buyers entering the market, consumers still hold homeownership in high regard and are eager to get their foot in the door despite challenging economic circumstances. Approximately 72 771 people purchased a home for the first-time in 2016, which was 32 941 buyers less than the previous year - proof that the higher cost of living is taking its toll on prospective homeowners. The majority of first-time buyers were between the ages of 26 and 40 years old. However, consumers over the of 70 and below the age of 20 years old purchased property for the first time in 2016. Suburbs most in demand for this demographic of the market are in Gauteng and the Western Cape, close to the respective economic hubs of Tshwane, Johannesburg and Cape Town.
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Is switching your homeloan worthwhile?Tue 02 May 2017

Is switching your homeloan worthwhile?
During the property boom years of 2006 and 2007, switching home loans from one bank to another was a fairly common practice among homeowners in South Africa. However, this has diminished over the years. Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that as banks tightened their lending criteria, it was not as easy for homeowners to switch and the trend lost some traction in the years that followed 2007. 
While not as common as it once was, Goslett says that there could be some benefit to switching one's home loan to another financial institution, provided the homeowner keeps an eye out for any hidden costs and compares apples to apples. “If another bank is willing to provide a lower interest rate, switching can be an enticing option for homeowners. Even a small reduction of 0.5% in the interest rate could save the homeowner thousands over the term of the bond. However, what homeowners need to bear in mind is that there will be costs and possibly penalties involved in switching,” advises Goslett. “Before looking at other banks, it would be advisable to speak to a home loan consultant at your current bank and see whether they would be willing to look at renegotiating the interest rate. If the response is positive, you may have saved on interest without having to pay any additional costs.”
Goslett says that if the homeowner goes ahead with switching, they will need to look at their current home loan agreement and see what clauses have been written into the contract regarding penalties and a notice period. “More than likely the financial institution will have included a penalty clause, which could result in the homeowner paying 90 days’ interest on their current home loan if cancelled before the stipulated notice period has passed.”
Apart from the possible penalty, Goslett says that there are also other costs involved in switching. These costs include attorney fees, a registration cost to register the new home loan, valuation fees and an initial administrative fee. Often the new bank will pay the legal costs of the switch, but this is subject to a minimum duration of the new bond. Essentially, what this means is that if the homeowner decides to sell their property before the minimum duration period has lapsed, they will have to pay the legal costs pertaining to the switch when they cancel the home loan. “These aspects of the switch is why it is so important to fully understand the offering that the new bank is putting on the table and goes back to comparing like with like. If the new deal saves the homeowner interest, but offers no other benefit and ends up costing more in fees, then there is no reason to switch. The only way that the homeowner will know if they are getting a better deal is if they compare all aspects of the deal with what they currently have,” warns Goslett.  
Some banks might be willing to waive certain of the costs, such as the valuation and administration fees. There is also the chance that they would be willing to pay a portion of the registration and cancellation costs involved. If this is the case, then switching would make far more sense. 
Goslett says that depending on the work volumes of the Deeds Office concerned, the transfer of the home loan will take between 60 days and three months. The homeowners will be required to provide the new bank with copies of their pay slip, bank statements, ID and all other documentation required to assess affordability. 
 
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Dealing with blacklistingWed 26 Apr 2017

Dealing with blacklisting
If a prospective homeowner has not kept up to date with their credit bureau reports, they may be in for a surprise when they apply for finance. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, a large number of potential buyers are referred by their estate agents to attorneys, if they have a blacklisting against their name that is preventing them from obtaining a bond. 
Goslett says anyone who has ever applied for credit will be listed with the various credit bureaus. Any credit provider that subscribes to a credit bureau will have access to the applicant’s credit history. The majority of companies and financial institutions assess their risk based on the information provided by the credit bureaux. If there is any negative information on the applicant’s credit history, it is highly unlikely that they will be approved to receive finance. This emphasises the importance of checking one’s credit reports on an annual basis. 
“In some instances, the buyer has already been home shopping and found the home they want to buy, only to be turned away from the bank because of a blacklisting against their name. It is possible for the buyer to rectify the situation and clear their name so that they don’t lose the property to another buyer. However, this will depend on the blacklisting against their name,” says Goslett. “Removing a blacklisting can be an arduous, drawn-out process which differs from one case to the next depending on the circumstances. How long the process will take to rectify will depend on the parties involved, type of blacklisting and possibly the courts, in the case of a judgment.”
According to Goslett, a default is a listing of a party who has failed to pay a creditor an outstanding amount. A default or adverse listing will remain on someone’s credit record for two years. If the debt has been settled, a request can be made by the creditor to the bureaus to amend the listing to reflect that the outstanding debt has been paid in full. “As a golden rule, when settling an outstanding debt with a creditor that has listed a default against you, obtain in writing that they will amend or remove the listing. It is also advisable to seek legal advice from a specialist consumer law practitioner who can provide guidance and a clearance service,” advises Goslett.
A judgment is more complex than a default listing, as it is a court order compelling the defaulting party to pay a debt. A Magistrates Court will deal with matters up to R100 000, while any debt that exceeds R100 000 will fall under the jurisdiction of the High Court. If the debt is not settled, it will remain on the credit profile for five years before it is automatically removed.  In order for the judgment to be removed from a credit profile before the five year period has lapsed, the New Credit Regulations provides that the debt must first be settled. Once settled, an attorney can then apply to have the judgment rescinded. The creditor will need to provide their consent before the judgment can be rescinded. 
Goslett says that keeping a clean credit record is less costly and time-consuming than dealing with adverse credit information. He provides prospective homebuyers with tips to avoid blacklistings:
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
If you are unable to pay your creditors, make a written arrangement to restructure the payments where possible.
 
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Purchasing a rented homeTue 25 Apr 2017

Purchasing a rented home
You have been looking for the ideal property to purchase for months and finally find it, but there is a catch, there is a tenant who is currently renting the property. What now? 
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that because the lease agreement is legally binding and was in place before, it stands - regardless if the owner of the home decides to sell. 
“The lease agreement goes with the home. Essentially this means that purchasing the home automatically makes the new owner a landlord, whether they planned to be or not. If the property is being bought as an investment or as part of a rental portfolio, the fact that the home is occupied might be seen as a drawcard. However, if the property has been purchased as a primary residence and the new owner intends to live there, it could be a problem,” says Goslett. “The new owner will only be able to take occupancy of the home once the lease agreement has expired and the tenant vacates the property. For this reason, it is best for the buyer to go over the details of the lease agreement and see how long the tenant can stay in occupation before they decide whether it is worth their while to purchase the home.”
He notes that there is also the matter of brushing up on the legal rights and responsibilities of a landlord. “There are respective obligations imposed on both the lessor and lessee in a lease agreement, so it is important for the purchaser to understand the implications of buying the home from the outset. For example, if there was a security deposit paid at the initiation of the tenancy, this will need to be refunded back to the tenant at the end of the lease. The buyer must ensure that they get this money from the seller. Otherwise, they will find themselves out of pocket,” advises Goslett. “Another aspect to check is whether the landlord is required to pay back any money that the tenant has paid for improvements to the property during the tenancy – this is money that should also be recovered from the seller during the sales process.”
If all goes according to plan, the new owner will only have to wait until the lease expires to move into their new home. However, this is provided that the tenant plays along and vacates the property when they are supposed to do so. “There are cases where the tenant has refused to move out, even once the lease agreement has run its course. Apart from having to deal with the delay, the new owner may also have to take legal action to have the tenant removed, which will cost money,” says Goslett. “If possible, before purchasing the property it is advisable to speak to the tenant and see what their intentions are, as this could save both time and money in the long run. A communicative, obliging tenant will make the process far smoother and pleasant,” he concludes. 
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Are you thinking of building?Mon 24 Apr 2017

Are you thinking of building?
Unless you have the cash saved up, constructing a home is going to require getting a loan from a financial institution called a building loan. Essentially, a building loan can be used to finance the construction of a home, additions to an existing property or renovations. 
According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, once an applicant has been approved for the finance, the loan lump sum amount is not paid to the applicant but is rather managed by the bank and paid to the contractor as required. “A loan account will be created by the bank from which they will pay the contractor as the work on the home progresses, these payments are aptly referred to as progress payments. The progress of the construction will be assessed by an assessor from the bank who will determine the amount of the loan that will be paid to the contractor,” Goslett explains. “The bank will not charge interest on the unused portion of the loan. However, interim interest will accrue on the money that has been paid out.  Applicants will need to make provision to pay the interest charged, to avoid a shortfall when the final pay-out of the loan is made.”
Goslett says that when it comes to building or renovating a home, there are always unforeseen costs that rear their head, so it is important to prepare for this in advance.  “Several aspects could have an impact on the cost of the project such as delays in the schedule caused by weather or labour strikes. It is not uncommon for a project to cost an additional  20% more than the original estimated cost of building the home,” he says. “Much like saving for a deposit to purchase an existing home, those who decide to build will need to have some cash set aside. It is also important to bear in mind that there with be an initiation fee and other costs charged on the loan itself.”
When applying for a building loan, applicants will be required to provide the bank with the following documentation:
Copy of the Offer to Purchase on the stand, along with a building contract
Schedule of planning and finishing dates
Either provisional or approved plans for the home so the bank’s assessor can determine its estimated value
Detailed quotations which include all specifications regarding materials and finishes
Copy of the builder’s National Home Builders Registration Council (NHBRC) certificate
Written waiver of the Builder’s Lien, which is the right the contractor has to retain the keys until full payment of the contract is received.  The bank becomes the preferred creditor if this right is waivered.
Goslett says that in some instances the bank may have special conditions that they require the applicant to adhere to, such as commencing or finishing the project within a certain time frame. Other conditions could be that the plans for the home comply with the bank’s minimum requirements and regulations, the builder is registered with the NHBRC  or that the stand is located within a proclaimed residential area.  “If the applicant meets the bank’s criteria and adheres to the special conditions, a building loan can provide the means for an applicant to construct and live in their ideal home,” Goslett concludes. 
 
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Tax tips for landlordsThu 20 Apr 2017

Tax tips for landlords
Owning a rental property portfolio that provides an income is much like owning a business, and as such there are tax implications and dues that need to be paid to the South Africa Revenue Service.
According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, landlords are required to declare the total amount of rental income received as gross income and they will be taxed at the marginal Income Tax Rate, applying to the owner of the home. The below table is a guideline of the personal tax rates that are currently applicable in South Africa:
Goslett notes that while landlords are required to declare the total income acquired through letting out their property, there are certain deductions that can be made, such as a non-capital expense. A landlord is obliged to incur expenses during the period that the property is let out. “Deducting the non-capital expenses from the landlord’s tax return will reduce the taxable income and possibly put the landlord in a lower tax bracket, which will be of benefit to them,” says Goslett.
He notes that examples of non-capital expenses include the following:
  • Rental agent’s commission or fees for securing a tenant
  • Advertising costs of marketing the property
  • Insurance fees, levies, municipal rates, water and electricity
  • Interest paid on the home loan if applicable
  • Cleaning costs, garden services and security
  • If the property is furnished, the depreciation of the furniture’s value can be deducted
  • Legal fees incurred from disputes with tenants – this includes the eviction of tenants
  • Repairs and maintenance costs – this does not include improvements to the property
Goslett says that expenses that are regarded to be of a capital nature cannot be deducted. These would include any expenses incurred while renovating or adding on to the property.  “If the tenant has moved out of the property and the landlord decides to make repairs to the home to sell it, these expenses cannot be deducted as they did not happen while the tenant occupied the property,” he adds.
If the total of the deductions exceeds the rental income received by the landlord and they wish to declare a net rental loss, the Income Tax Act contains a ring-fencing provision that may come into play depending on the circumstances. If the provision does apply, the landlord will not be able to offset their rental losses against income received from other sources.
Goslett warns that evading paying tax on rental income will see the landlord in deep financial water. “Rental agents are obligated to provide SARS with a record of the rental income received and paid over to the landlord. As a result, it is very easy for SARS to find any discrepancies in the landlord’s tax return. If found out evading tax after notification of an audit, the landlord could be facing a hefty penalty or worse - imprisonment,” he explains. 
In conclusion, Goslett says that all rental income should be included in the landlord’s taxable income. However, reducing it by the relevant expenditure will assist the landlord to reduce the amount of money that leaves their back pocket. 
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Tips to downsize efficientlyWed 19 Apr 2017

Tips to downsize efficiently
Making a move from a large freestanding home to a smaller, lock-up-and-go unit in a retirement estate has several advantages for consumers entering their golden years, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. “For one, a smaller home is far easier to maintain and costs less money. The homeowner can spend the time that would have been taken up by maintenance doing things that they enjoy,” he adds.
A family home with a swimming pool and large garden is perfect for homeowners who have growing children. However, as homeowners get older and their children fly the nest, there is less need for a large property. Selling and downsizing to a smaller property will give retirees more time and freedom to travel and pursue other interests. Additionally, they will enjoy the benefit of significantly reducing the monthly costs of rates and taxes, utility bills, insurance, security and repair costs.
Goslett says that while there are several advantages to downsizing, it is not without its challenges. “Downsizing will mean that not every item in the home can make the move. Over the years people will collect things and buy furniture that fits their home. Moving to a smaller space means reducing the number of items in the home and possibly purchasing smaller more appropriate furniture.”
According to Goslett, there are few tips that homeowners can utilise to assist with downsizing and preparing for the move: 
Have a plan for moving day 
As soon as the homeowner knows the date they are moving, they should start to prepare by putting a plan into action and working up until the set date. “In an ideal situation, the homeowner should give themselves around three months to prepare for the move. Three months will give the homeowner enough time to focus on one room at a time, rather than pushing to finish the entire house in a shorter time,” advises Goslett. 
Separate items into yes, no and maybe
If it is possible, it is best just to have a yes and no pile, as a maybe pile will mean dealing with certain items more than once. Rather try to deal with each item once and make a decision regarding keeping it or getting rid of it. “For those who struggle to let go this will be a difficult task as first,” says Goslett. “However, when making the decision, ask whether it is something you can’t do without and how often it gets used.”
More is less…not when downscaling
Often more is just that – more. Get rid of duplicate items and things that are being kept in case something else breaks. It is better to get rid of the duplicates than take up space for something that may never happen. The same applies to clothing - get rid of items that no longer fit or that is being held onto for ‘one day’.
Scale down collectables
“Whatever the reasoning behind it, cutting down a collection can be very upsetting, especially if it has taken years to build it up. However, limited space may require that only a few favoured items are kept. The number of items to be kept will be based on the amount of display space available in the new property,” says Goslett.
Turn unwanted goods into cash
Selling things is an excellent way to make some money to put towards the move while getting rid of unwanted items. However, it is important to stick to the three-month time frame and start early. While some items could sell rather quickly, others could take longer than expected, so it’s better to be prepared for this.
Make use of an auction house
Goslett says that homeowners who have an assortment of valuable items could consider using an auction house. An auction house is an ideal avenue to sell items such as antique furniture and artwork. An appraiser would come to the home to assess and value the items in the lot before taking the items to auction; this provides the owner with an estimate as to how much they can expect to receive on the day of the auction.
Give to the less fortunate
There are multiple charitable foundations countrywide that do amazing community work, which would benefit from a donation of household items. Most non-profit organisations cannot operate without the donations that they receive from the public. “Making a donation is a way to reduce household items and provide assistance to members of the community who are less fortunate. Knowing the items are going to people in need will make it far easier to part with them,” Goslett concludes.
 
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What role conveyancing attorneys play?Mon 10 Apr 2017

What role conveyancing attorneys play?
The change of ownership of an immovable doesn’t happen when the Offer to Purchase is signed, or even when the purchase price is paid to the seller. Rather, for ownership to change hands, the property needs to go through a registration process at the deeds office, where the home is transferred into the new owner’s name – this process requires the services of conveyancing attorneys. 
“Each time a property is sold it will go through the conveyancing process and a new title deed will be issued in the name of the new owner. Part of the process is also to remove the property from the seller’s name,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. “The title deed ensures the certainty of the owner’s title to the property that he or she has purchased.”
According to Goslett, three attorneys are used in the conveyancing process, the registering attorney, the cancellation attorney and the transferring attorney. The transferring attorney is appointed by and will represent the seller. “As the seller, there are some things that can be expected of a transferring attorney during the process. First off, the attorney should do is always protect the interest of their client, being the seller. Except for the course issues of the law, the client’s interests should be a priority.  Another thing that the attorney should do is keep the seller updated with the progress of the transaction. The attorney needs to communicate with the seller on an ongoing basis and keep them informed about the conveyancing procedure,” he adds. 
Goslett says that the conveyancer must advise the seller on the content of the Offer to Purchase, especially if the contract contains certain suspensive conditions, such as the offer being subject to the buyer’s bond approval or selling another property. With regard to the Offer to Purchase, the attorney must also keep the seller informed of their obligations to ensure that the transfer of the property is not delayed. “The attorney will meet with the seller to go over all documentation and explain anything that the seller does not fully understand. Once the seller has been informed of everything and all has been clarified, the seller will then sign the necessary documentation to conclude the transaction,” Goslett explains. “Once all the document is ready, the attorney will lodge them with the Deeds Office.”
He adds that the attorney will be in contact with the seller’s bank so will inform them once their bond has been settled and cancelled. The attorney will also be able to tell the seller whether there are any penalties or administrative charges that need to be paid, which would impact the eventual settlement balance. Certain notice periods may need to run their course before the money is paid over to the seller. “Before any guarantees are issued in respect of the transaction, the attorney must obtain the seller’s instruction,” advises Goslett.
To ensure that the process runs as smoothly and as quickly as possible, the conveyancing attorney will do everything in their power to expedite the registration of the property. Ideally, they will aim to close the transaction on the date that was agreed upon in the Offer to Purchase, provided there are no unexpected delays. Bearing in mind, they are heavily dependent on several external parties such as banks, city councils and the such - this is no mean feat.  
On the day that the property has been registered in the new owner’s name, the attorney will inform the seller. “Once everything has been concluded, and the home has been successfully registered, the attorney will account to the seller for any fees that relate to the transaction. Sellers can expect to receive this account within two days of the property’s date of registration,” Goslett concludes.
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The process of rezoning or subdividingThu 06 Apr 2017

The process of rezoning or subdividing
Homeowners who are looking to rezone their property for business use or subdivide to sell a portion of their land may be in for a longer ride than they initially expected, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
“Whether applying to rezone or subdivide a property, the application will need to follow a number of procedures before it is considered, which takes time. The application will need to be submitted to the relevant local authority and can anywhere from two months to two years to be either approved or denied. Aside from the fact that the process is time-consuming, it is also a very arduous and complicated affair. The documentation required by the local authority is complex, and the fees that need to be paid can expensive,” says Goslett. “Because of the complexity of the matter, most people that decide to go ahead use the services of an attorney or town planner to assist them through the process. The advantage here is that the application is handled by a specialist who understands all the aspects of the procedure - this will expedite the process to some degree.”
Goslett explains that zoning refers to the rights of the property, regarding what you can do with that property.  Property zoning is divided into levels of residential, business and industrial, each with its own set of rules and restrictions. When would rezoning be necessary?  Goslett answers: “If a homeowner is running a small business from their property wth only two or three staff members and the occasional client visit, there is no need for them to look into rezoning their home. However, if the home business grows to the extent that the traffic from clients and the activities on the property begin to impact the lives of the neighbours, they will need to apply for rezoning.”
He notes that subdivision and rezoning often go hand in hand because of the restrictions that come into play. “For example, if the owner of a large property of 2000m2 decides to divide his land into four separate plots, he will be required to convert from a Residential 1 zoned property with only dwelling per stand, to a property zoned for one dwelling per 500m2,” says Goslett.  
What does the process involve? Goslett says that the first thing a homeowner will need to do if they wish to rezone their property is submit a detailed report to local council motivating their reasons for wanting to rezone.  “Once the motivational report has been submitted, the homeowner will be required to advertise their application in the provisional Gazette, giving members of the public the opportunity to submit their objections,” Goslett explains. “The local town planning department will consider the consider the information that has been submitted, along with any objections that they receive. The town planning department will then refer the matter to the council committee and the provisional committee for the final decision.”
With regard to subdividing a property, Goslett says that the homeowner and their architect will be required to meet with a town planner. Plans will need to be drawn up and submitted to the city council, along with a detailed report. The homeowner is then required to inform their neighbours of their intention to subdivide via register letter, and they also need to advertise it calling for objections. Once the neighbours have given their approval, the plans will need to be approved by the council.
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Junk status and the property marketTue 04 Apr 2017

Junk status and the property market
“Pay down short-term debt and consolidate long-term debt,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
The rating agency, Standard and Poor’s downgrade of South Africa to sub-investment will have a negative impact on the housing market and consumers as a whole. “We managed to avoid a downgrade last year but were not as lucky this time around. While only one of the rating agencies at this stage, it is likely that Moody’s and Fitch will follow suit and take the same view as S&P,” says Goslett. “Homeowners with high debt levels should brace themselves for interest rate increases. They will need to focus on reducing their short-term debt as soon as possible and consolidate long-term debt by increasing repayment installments to eat into the outstanding capital debt faster.”
What does the downgrade mean for the country? Goslett answers that in simple terms the cost of credit will increase. “A junk status means that it will cost more for the government to borrow money, which in turn will have a knock-on effect on the consumer. Financial institutions will need to hold more money in reserve, which will make it more difficult to obtain credit, and the credit that is granted will come at a higher cost,” he explains. “A marginal mitigating factor is that to some degree financial institutions have already made provision and priced in the effects that a downgrade would have on credit costs.”
Needless to say that increased cost of credit will dampen consumers’ desire to purchase large-ticket items such as property and motor vehicles. “Over the last while prospective homebuyers have already been subjected to interest rate hikes, drought-driven food price inflation and rising electricity tariffs. An increased cost of credit would be too much to bear for consumers who are already struggling to deal with the growing cost of living,” says Goslett. 
Another downside to the downgrade is the fact that it will scare away foreign investment, as the country will be perceived as far too risky. Investors will shy away because of policy uncertainty and the government's policy regarding foreign investment in land being discouraged. “If demand from foreign investors dwindles, the prices of assets will depreciate, along with the currency. A fall in the rand will increase inflation and place pressure on interest rates, as well as the cost of imported goods. The result of all of this is that the country will be in a “catch 22” situation struggling to claw its way back out of junk status,” says Goslett.  “It is far easier to maintain an investment status than it is to improve the status once downgraded. The research concluded by Rand Merchant Bank reveals that on average it takes approximately seven to eight years for a country to recover from a downgrade.” 
The downgrade will slow the economy further, which will impact the government’s ability to maintain and upgrade infrastructure. The higher cost of credit will also slow the building sector as developers struggling to get the financial backing they require to initiate further projects. 
Goslett says that if there is an upside to the downgrade, it will be for consumers who have cash. “Investors with access to cash will be able to benefit from the predicted price stabilisation or decrease and will have more negotiating power in the market.  The tourism sector will also benefit from a weakening rand as travel to South Africa becomes cheaper for those with foreign currency,” says Goslett. 
He concludes by saying that South African consumers are urged to prepare themselves financially by reducing debt levels and putting away savings.
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Is buying a repossessed property worth it?Fri 31 Mar 2017

Is buying a repossessed property worth it?
While many may think that a sale of execution and a repossessed property are one in the same, they do differ, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. 
“If a homeowner can no longer pay their bond and are in substantial arrears, the bank will take legal action by serving the owner with a summons, taking judgment and eventually attaching the property. If the homeowner is still in arrears by the time the property has been attached, the bank will instruct the sheriff of the court to provide with selling the property at a public auction,” Goslett explains. “A representative from the bank is entitled to attend the auction and purchase the home if the bidding amounts are not substantial enough to cover the outstanding balance owed to the bank. The home will become a repossessed property or property in possession once it has been ‘bought back’ by the bank at the sale in execution.”
Once the bank has purchased the property at the auction, it becomes the legal registered owner. “At this stage, one of two things are likely to happen. Either the bank will sell the property to recoup their losses, or in some cases, they may allow the previous owner to rent back the property from them on a month to month lease agreement,” says Goslett. “If the bank decides to sell they will advertise the property for sale. Certain banks will also provide lists of repossessed properties to real estate companies for them to sell.”
As a buyer, there are several benefits to purchasing a repossessed home – especially if the amount owed to the bank is less than the home’s market value. “Banks are not looking to make a profit on the sale, but merely recoup their losses, so buyers could find themselves a bargain by purchasing one of these homes. Another benefit is that because the bank is a VAT vendor, there is no transfer duty payable on a repossessed property. And the bank will need to ensure that the municipal accounts are up to date, so no need to worry about taking on someone else’s municipal debt,” says Goslett. 
On the flipside, repossessed homes are often in poor condition and will require renovation. “Buyers will need to factor in the cost of the renovation on top of the purchase price to see whether they are really getting a bargain or buying a money trap. As with all property purchases, location is vital. It is best not to compromise on location just to get a perceivably good deal,” advises Goslett.
Another possible disadvantage is that if there are tenants in the property, the new owner will be responsible for vacating them. It could be as simple as giving the occupants notice, or it could entail going through the process of a legal eviction.  “While purchasing a repossessed property does have its perks, buyers need to be aware of the possible hassles and decide whether the purchase is still worth their while,” Goslett concludes.
 
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No change in interest rateThu 30 Mar 2017

No change in interest rate
Despite some economists suggesting that we might see an interest rate cut for the first time in four years, the Reserve Bank has decided to keep interest rates at their current levels with the repo rate steady at 7%, and the prime lending rate is staying at 10.5%.
“While a rate cut would have brought about some financial relief to consumers, the fact that the rate has remained steady for a year now should have helped many to sort out their financial affairs to some degree,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. “The Reserve Bank is currently at the end of its hiking cycle. However, this does not mean that consumers should see this as an opportunity to incur further debt, but rather an opportunity to reduce debt and put money aside,” he advises. 
According to Goslett, debt is financially crippling so many prospective buyers who want to get into the property market. “Too much money is spent by consumers servicing debt. Debt is a vicious cycle.  If consumers incur debt, banks incur more debt, which means the Reserve Bank has more debt, and the country has more debt. Essentially, this means that the country has less money to take care of its people and the poorer everyone gets, which results in people needing to borrow and start the cycle again. Reducing or eradicating debt will increase disposable income and improve consumer’s financial situations,” says Goslett.
He adds that for consumers who are already homeowners, proper planning when interest rates are steady or low will assist them to survive financially during hiking cycles. “Where possible homeowners should pay more than their minimum bond repayment to reduce the outstanding balance faster and save on the interest paid over the term of the loan. If the interest rates are hiked in the future, the homeowner would have benefited from their decision to pay more, and they would not feel the impact of the increase as much as those who have paid the minimum monthly instalment,” advises Goslett.  
 
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Cool itMon 27 Mar 2017

Cool it
Once an Offer to Purchase has been signed by both the buyer and seller, it immediately becomes a legal and binding Sale Agreement, warns Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. “In fact, the buyer will generally have already signed the contract before it is presented to the seller, which means that buyers need to be certain that they want to purchase the property before they sign the agreement,” he adds. 
According to Goslett, many people are under the misconception that the Consumer Protection Act (CPA) gives them a cooling-off period when entering into a Sales Agreement. However, this is only applicable in certain instances. “Sometimes buyers will sign offers on several homes in the hope that one of the sellers will accept, but if more than one offer is accepted they could find themselves in some hot water,” warns Goslett. “It is best to submit one offer at a time and work from there.”
The Alienation of Land Act states that residential property transactions of R250 000 or less are subject to a cooling-off period of five working days from the signature of the Offer to Purchase. The cooling-off period does not apply to residential homes that are sold for more than the R250 000 threshold. Considering that this provision is still in place and not impacted by the CPA, only a very small percentage of property sales will be subject to the applicable cooling-off period. 
Goslett says that regarding the CPA, a purchaser has the right to cancel the purchase of a property within five business days – only if the sale is a result of direct marketing.  Direct marketing means that the person has been approached directly either in person, by mail, or by electronic communication for the purpose of promoting or offering to supply goods or services. The cooling-off period will not apply to any sales that are a result of any other type of marketing, such as print advertising and show houses. It will also not apply if the purchase is made by a client that the estate agent is already working with. 
The Act offers consumers protection if they enter into a transaction with a supplier in the ordinary course of the supplier’s business. However, this excludes regular property sellers who do not earn a living from selling or buying property.
The CPA states that if the cooling-off period does apply, the five days do not start from the date that the offer is signed, but rather the day the property is transferred into the buyer’s name. Considering that transfer can take between three and six months after the offer is signed, cancellation of the agreement at this point could prove to be extremely problematic for all parties involved.
“If a buyer has signed an agreement, but would no longer like to purchase the property, it is best for them to be upfront with the seller and let them know as soon as possible, rather than breaching the contract. The seller might be willing to let the buyer of the hook and look for another buyer, rather than drawing out the situation longer than necessary. It is possible for the seller to pursue the matter legally, which could leave the buyer with a very expensive impulse purchase on their hands,” advises Goslett. “Buyers need to be 100% sure that they want the property before signing any contract,” he concludes.
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Why is homeowner's insurance so important?Thu 16 Mar 2017

Why is homeowner's insurance so important?
For most, their home will be the largest financial asset they will ever own, which is why homeowner’s insurance is imperative. Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that when a financial institution grants a home loan, they will require that the new homeowner has the property covered by insurance. 
“In most cases, the bank will take out the homeowner’s insurance on behalf of the new homeowner, and the monthly premium can be debited to the home loan account and paid with the monthly bond repayments. However, if the homeowner would prefer, they can take out the insurance themselves – provided they supply the bank with proof that the home is insured on an annual basis,” Goslett explains. 
He adds that it is vital that the insurance covers the property, along with all buildings on it, such as a freestanding garage, a swimming pool, the driveway, all walls and the borehole pumps. “Every part of the property needs to fall under the insurance policy and should be insured for the full current replacement value, which is why a qualified valuer should be called to assess the replacement value of the various aspects of the property,” says Goslett. 
He notes that while all features of the home will be covered, homeowner’s insurance does not cover any of the homeowner’s personal belongings, such as their furniture, jewellery, clothing or motor car. “These items will be insured under the homeowner’s household contents insurance and motor vehicle insurance. Another thing that it doesn’t cover is the balance of the home loan should the homeowner pass away or become disabled. Something like this would be covered under a home loan protection plan, which ensures the bond is taken care of in the event of either of these things happening.”
According to Goslett, there is some insurance terminology that homeowners should be aware of, such as being over insured, which means that the homeowner’s insurance is more than the replacement value of the property.  The insurance company will only pay out the replacement value - so the homeowner will be paying a higher than necessary premium.  He notes that being underinsured is where there is a shortfall between the value of the property and the amount insured. The homeowner will have to pay the shortfall amount from their pocket.  Insurance to value is the preferred status and means that the insurance cover equals the replacement value. 
If the property is within a sectional title scheme, the body corporate will be governed by the Sectional Title Act, which states that all buildings must be insured for their correct replacement value. A building is defined as a structure of permanent nature erected or to be erected and which is shown on the sectional plan as part of the scheme. 
Once the property has been paid off, the homeowner is not legally required to have homeowner’s insurance. However, this leaves the homeowner at risk of losing an asset that they have worked so hard to pay off. “Fire or flood could destroy the home leaving the homeowner with nothing if they no longer have homeowner’s insurance. Homeowner’s insurance protects of the homeowner’s most precious asset and ensures that they will have a roof over their head, even after disaster strikes,” Goslett concludes.
 
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Using a bond originatorMon 13 Mar 2017

Using a bond originator
The process of applying for a home loan can be involved and often time-consuming, which is why so many would-be homeowners choose to make use of a bond origination company to assist them, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
He adds that bond originators have several services that will help buyers navigate the bond application process more efficiently. “As experts in their field, a bond originator will be able to assess the buyer’s financial situation and level of affordability, advise them on the best way to finance their new home, along with explaining all the different banks’ home loan options and assist with the paperwork when applying for a bond. They will also liaise with all of the major banks and will negotiate the best possible deal on the buyer’s behalf. And the best part is that the service is generally free for the buyer,” says Goslett.
The estate agent will receive a commission from the bond originator for referring a buyer, and the bank that grants the home loan will pay the bond originator a fee, once the bond is registered. “The buyer receives the added service of using a professional bond origination company, without having the pay any costs. It makes sense for buyers to use the strong relationship that bond originators have with the banks to their advantage,” says Goslett. 
He adds that it must be noted, however, that while using a bond originator will simplify the process for the buyer and has several benefits, it doesn’t guarantee that a home loan will be granted. All lending by the banks will be subject to the home buyer’s affordability ratio and their willingness to repay the loan. “Regardless of whether a buyer uses a bond originator or not, they will still need to have a good credit record, have disposable income available, a deposit and additional money for the costs associated with purchasing a property,” says Goslett.
According to Goslett, there are numerous bond origination companies in the South African market, so buyers need to ensure that they choose to work with a brand that is reputable and respected in the industry, such as the BetterLife Group. “Make sure that the originator doesn’t request an administration fee, as this is not normally a fee that the home buyer would incur. Also, buyers are not obliged to sign any agreement with the bond originator. However, they will be required to provide them with all the required documentation and information as soon as possible,” he says. 
Buyers will need to provide the originator with all their personal information such as their contact details and a copy of their ID document. They will also require the buyer’s banking details, financial information and a copy of their latest salary slip or audited financials if the buyer is self-employed. The originator will complete the bond applications and will submit them to the banks on the buyer’s behalf. Once the applications have been submitted to the banks, the buyer should hear from the originator in the next three to five working days, provided the information given is correct and accepted by the banks.
“Buyers must ensure that they are kept informed throughout the entire process from signing the offer to purchase, to registration and transfer.  It is advisable to take each option the bond originator provides into consideration, taking into account the pros and cons of each of the bank’s products and the interest rate they are willing to give. There is no obligation for buyers to accept any of the offers that the bond originator comes back with,” advises Goslett. 
He concludes by saying that bond originators provide a comprehensive and valuable service that will not impact buyers’ back pockets – using a bond originator will take the hard work out of the bond application process, without costing buyers a cent.
 
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How to cancel your home loanThu 09 Mar 2017

How to cancel your home loan
In certain cases, homeowners who have paid off their home loan may have the option to keep their bond account open, which will keep the loan facility available to them. Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that the reason that a homeowner would want to keep the facility open is to ensure that the have access to money when they may need it for household improvements or repairs. 
“The advantage of keeping the account open is that the homeowner will not need to register another bond over the property and incur more registration costs. All the homeowner will have to pay is a monthly payment that covers the administration of the account and the insurance policies. They will also be able to keep their Homeowner’s Insurance and Life Assurance policies,” says Goslett.
He notes that if the homeowner decides that they would rather cancel the home loan account, there are a few procedures that they will need to follow, as it will not happen automatically. Goslett says that the homeowner will need to provide the bank with a written request asking for the home loan account to be cancelled. In the instance that the bond has been settled early, there might be a penalty or administration fee that will need to be paid by the homeowner to cancel the bond.    
“Once the bank has received the request to cancel the account, they will instruct the cancellation attorney to attend to the cancellation and provide a cancellation figure. The cancellation figure will consist of the bond settlement figure and approximately six months of Homeowner’s and Life Insurance premiums, to ensure that homeowner is covered until the transfer takes place,” Goslett explains.
He adds that once the bond has been settled, the homeowner is entitled to request that the bank provides them with the title deed to the property upon cancellation, along with any other security documentation.  If the settlement of the bond is due to the property being sold, then the bank will give the title deed to the conveyancing attorney, who will then register the buyer as the new owner of the property.  A guarantee will be issued by the registering attorney to the bank, ensuring them that there is enough money to cover the bond on the date of cancellation. The bank will then issue consent to the cancellation. 
“If the property has been sold and the bondholder still owes money to the bank, they will need to notify the bank at leats three months in advance. The homeowner also needs to stipulate how they intend to pay the outstanding owed, for example, with the proceeds of the sale of the property,” advises Goslett. “Failing to notify the bank of the cancellation within the stipulated minimum three-month period could result in additional finance charges. If the homeowner is selling one property and refinancing a new property, the bank may decide to waiver the notice period.”
If the bondholder passes away, the bank will need to be notified of the death as soon as possible. In the case of a deceased estate, the three month notice period does not apply. However, the bank will need to know to make the necessary arrangements. During the period between the death and appointment of an executor of the estate, the bond will need to continue being paid as interest will accrue on the account. 
Goslett concludes by saying that homeowners who are unsure of anything regarding the bond cancellation process should consult with their bank or financial adviser who can shed further light on the subject.
 
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Be aware of possible rental scamsWed 08 Mar 2017

Be aware of possible rental scams
While the Internet is an extremely useful tool, it has also made it easier for criminals to prey on prospective tenants – with the number of incidences on the increase. Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that unfortunately there is a criminal element who use the internet to scam potential tenants out of their hard-earned money. 
“Emotionally driven, enthusiastic tenants who are excited about the prospect of finding the ideal rental property are often more susceptible to fraudulent activity. Time is also a factor. Tenants are often eager to find the right home within a limited time frame, which can make them vulnerable targets for criminals,” says Goslett.  “Tenants move for various reasons, such as job opportunities or possibly personal issues, which could make them more desperate to find a place to stay and not be as cautious in their approach.”
How do rental scams work?
A scammer will attempt to get money from a potential tenant for a rental property that they are not in a legal position to offer for rental. The fraudster will place an advertisement for a property, usually offering a great deal to lure in a victim. Often the advertisement will include photos of the property, and in some cases, the scammer will include a copy of a fake contract which is ready to be signed. The rental property could either be real or fictitious, with the scammer possibly a landlord or impersonating the landlord or rental agent.  The scammer will request that a deposit and possibly the first month’s rent be deposited into their account to secure the property. Once the unsuspecting tenant has transferred the agreed upon amount - the scammer disappears.      
Goslett says that there are ways for vigilant tenants to lower their chances of becoming rental scam victims. He provides a few tips below:
“Even if the property is listed on a reputable website, it could still be a rental scam, so keep your guard up at all times. Crafty rental scammers are resourceful and often manage to get their listings onto search portals,” advises Goslett. “Also trust your gut. If at any stage of the process you feel there is something wrong or the whole thing is rushed with unwarranted pressure; you feel information is being withheld or it all seems too good to be true – walk away.”  
He notes that tenants should contact the numbers given by the landlord or rental agent to ensure that the office exists and is part of the brand they say they are representing. A reputable agency will be able to provide the tenant with all the information they require about the rental agent and their rental listings. 
Red flags to watch out for:
Don’t transfer money without meeting the landlord or rental and seeing the actual property.  It is best to see the property and inspect it before any money changes hands – know what you are paying for.  A red flag should be raised if the landlord expects payment purely based on website images alone. 
Landlords and rental agents will have a vetting process, which will include a credit check, before they select a tenant. Beware of landlords or rental agents who are willing to sign contracts without following the correct protocols. 
Be wary of landlords or rental agents who request excessive deposit amounts or too many months upfront or are never able to meet and show you the property in person. 
A lease agreement is an essential contract that protects both parties, so don’t trust a landlord who says there is no need for one. A landlord who doesn’t want to enter into a lease agreement may not have one to offer in the first place.
Before signing a lease agreement, have legal representation review the contract.
“Unfortunately there is no foolproof way to avoid a rental scam completely. However, potential tenants will be far more protected if they pay attention to the warning signs. It is vital for tenants to deal with rental agents from a reputable agency that they know and trust,” Goslett concludes.
 
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