Buy a starter home or your forever home?Thu 08 Sep 2016

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

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

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

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

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

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

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

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

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

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

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

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

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

Distressed property a reality in today's market
Challenging economic conditions have led to an increasing number of homeowners finding themselves in financial distress. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, the rising cost of living, interest rate hikes and job losses have taken their toll on the market and have contributed to the growing number of distressed property owners.
“Many homeowners are currently battling with financial strain and are not sure whether they will continue to be able to afford the home that they live in.  A large number of South African homeowners have high debt-to-income ratios and have been struggling to make ends meet. With the ongoing food price increases and tariff hikes, these homeowners are fighting to keep their heads above water,” says Goslett. “If financially distressed homeowners don’t relook at their situation and make the necessary adjustments as soon as they can, they will find themselves in a far more dire predicament.”
According to Goslett the worst thing that a financially distressed homeowner can do is nothing – it is imperative that action be taken without delay. “Unfortunately pride stops many homeowners from admitting that they need help with their current financial situation. Often they also don’t know where to turn and who to ask for help. Ignoring the situation or pretending everything is okay will only make the matter worse. Ideally it is best to act decisively and reach out for assistance as soon as there is a problem,” advises Goslett. 
He provides homeowners with some advice on how to handle this often complicated situation:
Assess your situation
The first step for homeowners who are struggling financially is to take stock of their current situation and determine whether they will be able to continue to bond their bond or not. “If the answer to this question is no, it is best to take action as soon possible. The homeowner should contact their bank and notify them of their current financial circumstances,” advises Goslett. “Many homeowners avoid contacting their bank about their financial strain because they are worried about the house being repossessed, however this is ill advised.  Not contacting the lender and defaulting on the bond repayment will not only result in the homeowner potentially losing their property, it will also lead to a blemished credit record and black listing.” 
He adds that a negative credit record can make even renting a property difficult due to the fact that most landlords do credit checks on their potential tenants. 
Communication is key
It is in both the banks and homeowner’s best interest for the owner of the property to continue living there and paying the bond. For this reason banks will often try and assist homeowners where possible by possibly rescheduling the debt or giving financial advice.  According to Goslett, this can only happen if the bank is aware of the situation at an early enough stage and the homeowner has the means to continue to pay. “Communication between the homeowner and the bank is crucial if the homeowner wants to resolve the situation. In certain instances banks are able to renegotiate the term of the loan from 20 years to 30 years in order to decrease the amount of the monthly bond instalment. Certain financial institutions could be willing to offer the homeowner a payment holiday of between three and six months - this might be all that is needed to provide the homeowner with enough breathing room to get back on their feet,” says Goslett.   
Speak to the professionals
In the instance where the situation has moved beyond the homeowner’s own capabilities, it is advisable that they consult with a professional debt counsellor who can review the homeowner’s circumstances and provide a possible solution or guidance. Once the counsellor has assessed the homeowner’s finances they will be able to submit a repayment proposal to all the relevant creditors. An application will then be made in court to have the proposed repayment plan granted to ensure that legal action cannot be taken against the homeowner and the bank will not be able to repossess the property. “An alternative option is for the homeowner to be placed under administration rather than debt review. In this case the property can be repossessed to mitigate loss,” Goslett explains.
Sell the distressed property
Goslett says that if the homeowner is not in a position to keep their home, it may be prudent to place the home on the market. In this case, it is advisable to contact a real estate agency that has experience in dealing with distressed property sales. The banks do work hand-in-hand with reputable estate agencies to sell distressed properties at market-related prices.
“If a homeowner is in financial distress sometimes selling the property through the distressed property channel is the most effective way to recover. In the case where the homeowner has managed to build up some equity, there might be enough money to cover their outstanding bond, as well as all or some of their other debt. This option could help the homeowner to start with a clean slate and re-establish themselves and their credit record,” says Goslett, who adds that RE/MAX of Southern Africa is the only real estate company in the country that has a dedicated distressed property department.
He concludes by saying that while financial distress is a stressful and complicated situation, homeowners who are in need can make use of certified real estate professionals who have the qualifications to successfully guide them through the sale of their property during these difficult circumstances.
 
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Have elections impacted the property market?Thu 04 Aug 2016

Have elections impacted the property market?
This month South Africans around the country will exercise their right to vote in the Municipal Elections to decide which party will run their Municipal district for the next five years. Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that he has been asked on a few occasions what influence the upcoming elections have had on the property market over the last few months and what we can expect afterwards. 
“To be honest this isn’t an easy question to answer, considering who of us can truly say for certain what will happen in the future. However, I can offer my opinion on where I see the market going based on my experience working within the property industry,” says Goslett. “It would certainly seem that people have been hesitant to invest in property leading up to the elections, with many potential buyers adopting a wait-and-see approach. Many are holding back to see where things are going from a political perspective, however this is not the only factor that is having an impact.”
He adds that there are several things happening from an economic standpoint at the moment and many consumers are nervous about whether the market will experience a dip down in the near future. “That said, I think that after the elections there is likely to be resurgence in the property market and a bit of an uptick as consumer confidence returns and more buyers get ready to get back into market,” says Goslett.  
He notes that many within the real estate industry have coined the months leading up to this point as a slowdown in the market. However, Goslett says that he would prefer to look at it in another way. “While the numbers in the property market do reflect a slowdown - there are buyers in the market and there is a certain amount of available stock. Nevertheless we have reached the point where buyers are not prepared to pay the prices at which the stock is currently being marketed, putting the market in a state of flux,” he says. “Over the next few months as home prices adjust, and they will have to adjust downwards if sellers want to sell their properties, you will see the market begin to flow again. While there are issues around banks’ lending, or rumours that the banks are tightening up their lending criteria, I don’t think that is as much of an issue as buyers just not wanting to pay inflated home prices.”
Goslett believes that the market is currently in a transition period with momentum shifting towards the buyer. The shift will cause property prices to stagnant for the time being. However, opportunities often reveal themselves in times of change. While there is any number of factors that could influence the property market and its performance during the remainder of this year, the residential market continues to hold its own, despite challenging economic conditions. The crux is for buyers and sellers to understand the market conditions in which they are trading and tailor their buying and selling decisions and behaviour accordingly. 
“Interesting times lie ahead for the country and the property market. Those who are prepared and ready will be able to make the most of the times ahead,” Goslett concludes.
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Questions to ask before listing your homeMon 01 Aug 2016

Questions to ask before listing your home
Just as buyers need to do their research before taking on homeownership, those who are considering placing their home on the market also need to spend some time contemplating certain aspects before they list their property, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.  In fact, there are three questions that every homeowner should ask themselves before placing their home on the market.
Question one – Is it the right time to sell?
There are phases in the property market that will favour buyers, and there are phases that will favour sellers. It all depends on the economic environment and conditions that surround the property market. While there is generally a market trend throughout the country, there will also be certain areas that buck the trend due to specific, unique circumstances that influence a particular market. “Ideally, before listing their property, a homeowner should talk to a real estate professional with extensive working knowledge of their specific market who can analyse current sales inventory and trends,” advises Goslett. “A good agent will be able to determine whether it is the prime time to list the property to get the best possible price. In certain cases there may be all kinds of reasons to hold back on listing the home, such as a large number of homes on the market in the area that are similar to the seller’s.”
Question two – Is the price right?
According to Goslett, setting the right asking price is imperative to getting the best possible result out of the home sale. “A crucial mistake that many sellers make is overpricing the home to counteract buyer negotiations. The problem with pricing a home above its perceived fair market value is that many buyers won’t even take the time to view it. Buyers would rather look at other properties that they deem to be priced at what they consider a reasonable, market-related price. All over estimated prices will do is make properties that are priced correctly look like a bargain buy,” advises Goslett. 
He adds that a home that is priced correctly will appeal to a wider range of buyers and be sold within the shortest possible time. When a buyer is comparing properties that are in a similar area and offer similar features, price becomes the number one factor that will influence their decision making process. 
How does a seller know whether their home is priced correctly?   “An estate agent will be able to provide the seller with a comparative market analysis (CMA), which will give them an accurate indication of what other homes are selling for in their particular area. Factors that are included in a CMA would be the average price per square metre in the area, recent sale prices of similar homes and comparative prices of other properties that are still on the market. This information will help establish a reasonable price bracket for the property,” says Goslett.  
Once the agent has the correct price bracket for the home, they will then determine what features or unique qualities could set the property apart from others in the area to give a more accurate gauge of the home’s value.
Question three – What is the exit strategy?
Although it is possible to have an estimated time frame as to how long the property will be on the market, it is impossible to pinpoint the exact day the home will be sold. The seller will need to establish a plan in case it happens quickly.  “Before the home is listed it is a good idea for the seller to know where they will go if they are in between homes. They will need to decide whether they would want to stay in their current property and pay occupation rent, or move to a temporary housing situation with a friend or relative perhaps. A post-sale plan will take some of the anxiety out of selling your home,” says Goslett.
He concludes by saying that having the answers to these three questions will help to ensure that the process of selling a home is less stressful and a far easier procedure to handle.
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Bathroom budget renovationsFri 29 Jul 2016

Bathroom budget renovations
Giving a fresh new look to an outdated bathroom can modernise and add value to a home without costing too much,  says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
He adds that renovations and contemporary remodelling of bathrooms are known to boost the marketability of a home and, in addition, bathrooms and kitchens are the two areas of a home where the cost of the renovation can be largely recouped on the sale of the property. “According to statistics on average sellers can expect to get between 65% and 75% of the renovation cost back when renovating a full bathroom and approximately 65% of the cost back when adding a new bathroom,” says Goslett.
Over the past few years bathroom renovations have become extremely popular with many homeowners opting to renovate their bathrooms before any other room in the home. “This can be attributed to the fact that bathrooms and kitchens are major focal points that buyers look at before they put in an offer to purchase a property. Additionally bathrooms are generally smaller than other rooms in the home, so the cost of renovation can be managed more effectively,” says Goslett. 
While it is a good idea to use a professional contractor with the necessary qualifications for larger complex projects, homeowners will be able to complete simple updates themselves. “Depending on the project, a simple renovation can be as effective as a complete remodel. Sometimes all that a bathroom needs is modern fixtures, a tile and grout scrub and a fresh coat of paint to transform it into a completely new space. Sanitary warehouses and hardware stores are always getting new inventory, which means it is easy to for homeowners to find fixtures on sale that will suit their particular taste. It might be a matter of merely changing the tap fixtures or perhaps a bath tub. Consider changing to a double sink instead of a single one, recessed lighting, or new floor and wall tiles,” says Goslett.
According to Goslett, homeowners who are looking to do the renovations themselves can find a wealth of information on bathroom do-it-yourself projects from the local library, bookstores and of course online. There are countless books and reputable websites available that can help guide homeowners through the process, whether the primary focus is design, functionality or cost.  Homeowners can check whether their local hardware store has do-it-yourself classes or seminars that they can attend, which will provide guidance and practical examples.  Goslett says that DIY projects are a great way to add value to a home – provided the work is completed properly. If installed or completed incorrectly, the project could end up costing twice as much to fix as a professional would have charged in the first place. 
“Homeowners, who are planning on undergoing an extensive renovation project or adding another bathroom to their home, should get proper plans drawn up. If contractors are called in to do any work on the home and require the plans, keep the original and give them copies. While renovating a bathroom may cause some inconvenience, this is a small price to pay when compared to the aesthetic appeal and value that is adds to the property,” Goslett concludes.
 
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Are you covered?Wed 27 Jul 2016

Are you covered?
As consumers continue to face the ever increasing cost of living, along with the possibility of further interest hikes before the end of the year, many homeowners may be reassessing their financial situation and looking at ways to save money and cut down on costs, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. 
“One of the ways in which homeowners can save money is by taking a look at their current home insurance policies and possibly changing their cover,” says Goslett. “While insurance is a necessity for homeowners, this does not mean that it has to be a financially draining burden. Homeowners should shop around and see what options are available to them from various insurance providers.”
Goslett advises that comparing various quotes from an array of insurance companies will give homeowners insight into the options available to them and will help them choose the best cover for the best possible price. “Homeowners have the option of either phoning the insurance companies directly themselves, or using the services of a broker who can source numerous quotes for the homeowner to peruse. Having a number of quotes will give the homeowner the chance to compare apples with apples and the range of various products that each service provider offers. Doing this one thing could assist the homeowner to save money in finding a cheaper option that provides as much, or perhaps more cover,”  he explains.
Often consumers will accept the annual increase on their insurance policies without questioning or researching whether there are better and cheaper options that cater to their specific criteria. In fact statistics suggest that only half of all homeowners will investigate their insurance policies when they have been increased. “Research may take some time and effort, but it is always worthwhile to ensure that the current policy is still the best option, meeting all the requirements while offering good value for money.  In order to be competitive in the market insurance companies launch new products regularly and are consistently trying to find ways to undercut their competitors. As result it is often possible to find good insurance products at lower rates. Without putting in the effort, it is impossible to know what the best option is,” says Goslett.
Ideally homeowners should review their insurance policies as part of an annual financial assessment. Every year the value of the property as well as its contents vary, so it is imperative that the homeowner’s insurance cover is adjusted accordingly. 
With the internet at our fingertips, collecting information and quotes from various insurance providers is a relatively painless endeavour. There is very little that homeowners will not be able to find online. In fact there are centralised sites that will provide homeowners with quotes from different providers without them having to search on other portals. “We live in an age where things are far more accessible. To a large degree the work of finding comparative quotes has been taken out of the process and the procedure has been simplified and streamlined as much as possible. The homeowner will be required to load their details and insurance criteria, after which they will receive a list of all insurance companies and policies they offer which match the requirements. The list will also include the premiums that would be paid by the homeowner for each option. This will quickly paint a picture of which company can provide the best value,” says Goslett.
He provides a few basic elements that homeowners should consider when comparing policies: 
1. Check for possible liability cover. This covers any injury or damage done to other people or their property, where the homeowner is at fault.
2. Look at the cover for household contents and personal property. This pertains to all items inside the home that are not a part of the structure itself such as appliances, furniture and clothing. An inventory should be complied to assess the level of personal cover required. Peruse this clause carefully as certain items may be excluded or covered under another type of insurance.
3. Check if there are certain items that need to be specified such as jewellery and laptops/other electronic devices.
After comparing quotes and selecting the appropriate one, Goslett says that homeowners that there are still further ways to decrease the premium such as upgrading the home’s security. “Added or upgrading the home’s security can reduce the monthly premium by as much as 5% in some instances. Certain insurance companies will also reduce their rates if the client is associated with a neighbourhood watch or block watch programme,” he says.
Often preferential premium rates will also be given to homeowners with a low or no claim history. “For this reason, it is best to only make use of the insurance policy when it is absolutely necessary. If possible, it is better to pay for small incidents from a contingency fund and leave the insurance policy for when it is really needed,” advises Goslett. “Homeowners can reduce their premiums by opting for a higher excess on claims; however this would mean having the excess amount put away in savings.”
If there are elements within the insurance policy that need clarification, it is advisable for the homeowner to seek guidance from a professional financial adviser or insurance broker. 
“A home insurance policy is a vital aspect of homeownership - paying exorbitant premiums is not. Using these tips and reducing insurance premiums will ensure that homeowners can reduce their costs, while still having their property adequately covered for unexpected incidents,” Goslett concludes.
 
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The ins and outs of Capital Gains TaxTue 26 Jul 2016

The ins and outs of Capital Gains Tax
Although the large majority of property transactions will not be subject to Capital Gains Tax (CGT), it is still important for prospective sellers to understand the implications that could have on their sale, should their home be sold for more than the primary residence exclusion threshold, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
“Forming part of an individual’s income tax, CGT is part of an ongoing reform programme which was introduced in South Africa in October 2001. The tax pertains to the disposal of an asset such as an immovable property or any capital sale of assets globally, where the proceeds exceed its base cost,” Goslett explains. “The tax applies to South African resident taxpayers, trusts and companies. Non-residents are liable to pay CGT only on the sale of their immovable property in South Africa. Additionally a withholding tax applies to non-resident sellers of immovable property in terms of section 35A of the Act. The amount withheld by the buyer serves as an advance payment towards the seller’s final income tax liability.”
Goslett says that although CGT was only introduced in this country 15 years ago, it was implemented in many of the countries that South Africa trades with a few decades ago. While there are numerous capital gains or losses on the disposal of an asset that are subject to taxation, there are instances where transactions are exempt due to certain concessions. The conditions pertaining to these exclusions are found in the Eighth Schedule to the Income Tax Act, 1962 (the Act), which determines a taxable capital gain or assessed capital loss. 
With regard to the sale of a primary residence, there is exclusion on the first R2 million of any capital gain or loss. “If a property defined as a primary residence is sold for a capital gain of R2.5 million, the first R2 million will be disregarded and only the remaining R500 000 would be subject to taxation,” says Goslett.  
He notes that in terms of the Act, a primary residence is defined as any structure, boat, caravan or mobile home, which is used as a place of residence by a natural person. Either a natural person or a special trust must own an interest in the residence. The owner, their spouse or a beneficiary of the special trust, must ordinarily reside in the property as their main residence and it must predominantly be used for domestic purposes. In cases where the property has been used for business purposes, the exemption will be apportioned for those periods where the property is not used as a primary residence. 
According to Goslett, in the instance where a primary residence is jointly registered in the names of two people such as a husband and wife, each would benefit from the residential exclusion according to their interest that residence. If each spouse holds a 50% share in the property, each would qualify for a primary residence exclusion of R1 million - provided they both reside in the home together and do not own separate primary residences. No exemption will apply on capital gain realised from the sale of an individual’s second home or holiday home.
Goslett says that there certain instances where the owner of the property will be treated as having been ordinarily resident for a continuous period of up to two years, even if they have not been living in the primary residence that period, provided the following circumstances apply: 
The primary residence has been accidentally rendered uninhabitable.
The primary residence was in the process of being sold while a new primary residence was acquired or was in the process of being acquired.
The property was being built on land acquired for the purpose of erecting a primary residence.
“It is important to remember that CGT applies to the capital gain or loss during a property sale and not on the purchase price of the property. In order to determine whether the taxation is relevant, there are a number of expenses that need to be deducted,” says Goslett.
He notes that for a seller to determine the capital gain or loss made during the transaction, they need to deduct the selling price of the home from the base cost of the property. The base cost is determined by combining the original price paid for the home, along with all costs incurred acquiring and selling the property. These costs would include transfer cost, transfer duty, agent’s commission, advertising costs, VAT and any professional fees. If the seller has receipts and invoices, they will also be able to include the costs of improvements, alterations and renovations - routine maintenance, insurance and rates and taxes may not be included. “It is essential for homeowners to keep accurate records of the money they spend on their property. If they are unable to prove any costs through their records, they will not be able to deduct them from the proceeds to determine the capital gain,” says Goslett.
Once the base cost has been determined, it is then possible for SARS to calculate the CGT to be paid based on the net profit realised. Goslett says that Section 26A of the Act provides that 33.3% of the capital gain must be included in the seller’s taxable income for the years 2013 to 2015, and will be taxed according to their tax bracket. Government has proposed that the CGT inclusion rate for individuals be raised to 40% from March 1 this year. The CGT is payable when the individual’s income tax return is submitted at the end of the financial year during which the property was sold.  “All records should be kept for at least four years after the date that the income tax return reflecting the capital gain or lose is submitted,” advises Goslett.
“Property tax can be highly complicated, so it is always advisable for sellers to seek the advice of a professional tax consultant who can point them in the right direction regarding CGT,” advises Goslett. “An expert tax consultant or conveyancing attorney can offer invaluable guidance through the submission process,” he concludes.
 
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Rates remain unchanged once againFri 22 Jul 2016

Rates remain unchanged once again
South African Reserve Bank governor Lesetja Kganyago announced today at the Monetary Policy Committee (MPC) meeting that interest rates would remain where they are for now, with the repo rate currently at 7% and the prime lending rate at 10.5%. 
According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, this is good news as an increase at this stage would only serve to negatively impact the residential housing markets with consumers already facing increasing financial strain with high debt levels and the cost of living escalating. 
With slow economic growth and inflation already placing financial strain on consumers, an interest rate hike would add to the pressure and adversely affect consumer sentiment towards the property market. “Affordability is already an issue for many consumers who want to buy property, but don’t meet the necessary qualifying criteria. An interest rate hike will further widen the gap between homeownership dreams and reality,” says Goslett.   
He notes that during the first half of this year demand for property has dampened as many buyers adopt a wait-and-see approach to the market. As a result the dynamics of the property market are slowly beginning to shift with more homes entering the market and the pool of potential buyers decreasing – this weighs in buyers’ favour, with sellers having to become more competitive with their prices.
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