House buyers spoilt for choice
| BUYING a home is a crucial investment decision that prospective
homeowners have to grapple with, hence the need for buyers to tread carefully
before taking the plunge.
South Africa now has three property-transacting models that buyers and sellers can choose from: estate agency, private selling and the new Help-U-Sell model imported from the US.
Marno Nel, a proponent of the Help-U-Sell, argues that the model offers consumers a full range of property services when buying or selling a property, but costs less and provides more than a traditional estate agency.
This has proved to be a runaway success in the US and is set to change the face of the South African property industry, asserts Nel.
He reckons that the model will account for 15% of property transactions in the next few years.
According to Nel, the main advantage of the new model is that unlike estate agents 6 to 7% commission, the Help-U-Sell charges a set fee of 1 to 2% of the average house price in an area. For example, explains Nel, on a house of R1m, a seller will pay R60 000 (6% of the purchase price) in estate agency fees.
This is in contrast to the R20 000 (2% of the price) that a buyer will pay through the Help-U-Sell model, says Nel.
Instead of taking a commission, we charge a set fee after the home is sold for our services, saving the customer a great deal of money.
He adds that the costs involved in operating a Help-U-Sell franchise are low and the savings can be passed on to the consumer.
Herschel Jawitz, CEO of Jawitz Properties, says new competition is always welcome because it is good for the market and consumers. Any service offering the same value at a reduced price benefits the consumer, adds Jawitz.
But he cautions that consumers need to be sure that they are getting value for money from all service providers.
Buyers and sellers need to ensure that the person providing the service has the right level of expertise and knowledge about the dynamics of the market, stresses Jawitz.
Nel says that Help-U-Sell has over 900 franchises throughout the US and its website showcases more than 1,5m properties for sale.
Currently valued at $100m, Help-U-Sell achieved $15bn in real estate sales last year, says Nel.
Nel also points out that Help-U-Sell is different from online property showcases (private selling) because we not only present properties but provide a marketing service and assist the client just as a regular agent would do.
They charge a fee for listing ones property on their website while we charge a fee after the property is sold, adds Nel.
Article by: Chris Nthite - www.moneyweb.co.za