Real Estate News - South Africa
The property market has remained buoyant during the past three months, and although prices have remained stable in the R500 000 R1 000000 market sectors, houses have been on show for approximately 40 60 days longer than for the same period in 2004.
The annualized increase from January to June 2005 varies between 22 and 27% by suburb for properties in the areas immediately northwest of Johannesburg.
There has been no appreciable change in the accessibility of bonds and clients who qualify for approval have received approval in principle within 15 days of purchase.
However it is important for sellers to bear in mind that all bonds granted to purchasers are subject to a valuation of the property itself and that institutions must find value at the purchase price of the property. As copies of transfer registers for all areas are available to the public, it is inevitable that when the selling price of a home far outstrips that of other properties in a particular area, the property is going to be subject to an intensive inspection before a full bond is granted to the purchaser. It is therefore imperative that an agent can justify a valuation to a seller, before the seller grants a sole mandate to the agent.
Many sellers feel that testing the market is a good strategy. Unfortunately this very often rebounds on the seller and the agent. The property remains in the market for an unacceptably long period and eventually all interest dies. Active purchasers in an area are well aware of price fluctuations in properties in which they are interested and the period in which the property has been on the market. It is very often in the interests of the seller who has been testing the market to take the property off the market for a fairly long period and then re market it at an acceptable price. Professional agents too, have a real interest in upholding their credibility and are reluctant to offer over- priced homes on the market.
In an ideal transaction the seller, buyer and agent should work as a cohesive whole.
The buyer should have confidence in the agent and be satisfied that the agent is well informed, and has verifiable data and credibility with purchasers and institutions.
It is important that the buyer and agent have an easy and close working relationship and this is made very much easier for both, if the buyer has granted the agent a sole mandate for a reasonable period
It is also in the interest of the sellers that they have a current account for services and rates and taxes from the council and that they have made provision in the Johannesburg area for an upfront payment of 6 months average charges, in order that the conveyancer can obtain a clearance certificate from the council so that the property can be transferred..
If the agency is professional and is established in an area , they will have a list of prospective purchasers, and a good working relationship with them. The agents will be aware of the purchasers financial capability, their preferences, pricing and any non negotiable requirements. This means that within days of receiving a mandate from the seller the agent should be showing pre qualified purchasers the property. In an ideal sale a showhouse should be a very last resort.
As petrol and time is now at such a premium, it is critical to the seller, particularly if the sale is urgent that the agent understands how internet can work for all parties. A purchaser who is new to an area, is going to surf the internet to get an idea of prices and properties before he or she approaches an agent or physically visits houses for sale.
Good photos, and really detailed descriptions of properties make it very much easier for buyers to get a feel for where they would like to buy and to list specific properties to view.
The ideal purchaser has all his ducks in a row. He or she has already confirmed with their financial institution that they qualify for a particular price range. These purchasers knows whether or not they will qualify for a bond and costs, will have asked the agent what the transfer fees, costs and bond costs amount to and have made provision in cash for these expenses and have the money available for deposit with the agent or conveyancer within days of completion of the sale.
This wonderful purchaser will also have given the agent his non negotiable requirements as well as his preferences and will know within given parameters what he is looking for.
Sadly this is not an ideal world and some of the current pitfalls
Negotiation of agents commissions. This should be finalized at the granting of the sole mandate and non negotiable thereafter for the duration of the mandate. This ensures a trusting and professional relationship between seller and agent and the parameters of the work to be delivered by the agent and paid for by the seller are understood by both parties. There is no recommended fee for an agents commission but if there is a confident relationship between the seller and agent, and the seller is satisfied that the agent will render a professional and comprehensive service to him or her, and what this service means in terms of knowledge of the markets, and financial and legal pitfalls which can be avoided by the seller and the tax implications of the sale, the commission should not be an issue.
What the seller expects from the agent. This should be discussed and agreed in detail and incorporated into the sole mandate. This is an area where a lot of misunderstanding arises and both parties should spell out what is expected on the one hand and what can be delivered on the other.
Buyers who are testing the market. There are numerous purchasers who either through lack of information or who do not take responsibility seriously, believe that they should first look at houses and then arrange their finances. This usually ends in disaster and should be prevented by the agent who must properly qualify purchasers before listing them as serious clients.
Security of the sellers property. It is essential that the agent lists all viewers of a property and verifies their current contact details, including work telephone numbers. There should be sufficient agents present in a large property during a show day to ensure that the sellers property is secure and will remain so and that the names and telephone numbers of all viewers are listed and that the agent has a 2nd person present, where necessary. Sellers must lock their cupboards and treasured possessions up and remove the keys.
Lack of communication between all parties. The agent should be the prime communicator and must act as liaison between seller, purchaser and conveyancer until the transfer of the property is effected. It is not sufficient for the agent to instruct the conveyancers and then leave it to them to keep buyer and seller informed.
An agent who is a good communicator will make all the difference between what is inevitably a stressful experience and one which can become an unending nightmare.
We do our best to keep all the uglies at bay would be delighted to assist you further with any queries - and wish you a pleasant buying and selling experience!
Article by: ANN RAULT. mea. cea. Dipp App. - www.arprop.co.za