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I Issue: October
2003 I Editor: Berry Everitt I |
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Your Area Specialist:
Chas Everitt International
sales agents have all the latest market information
regarding local property values at their fingertips
– and are committed to the highest standards of
personal service when it comes to selling your home.
In addition, the Chas Everitt International property
group offers you, the homeowner, the best possible exposure
for your property in both national and international
markets. So if you are thinking of selling your home,
call your nearest Chas Everitt International office
today for the name of your local area specialist - or
visit www.chaseveritt.com
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Every month the Property
Signpost Newsletter will be issued to all our
subscribers, filled with real estate information to
help you make an informed decision, whether you are
buying or selling a property.
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Contents
1. Welcome By Publisher
2. If You Really Want to Sell, Award a
Mandate
3. Now There's
More Than Price to the Choice of Location
4. Get That Loan - With Accurate Info
5. When Two Hearts Don't Beat
As One…
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1.
Welcome By Publisher
Chas Everitt International
rocks! With the opening of three more major franchises
this month - in Nelspruit, Pretoria East and on the
Atlantic Seaboard - we're on top of the world as we
watch our national expansion plans come together.
We've also just staged exhibitions of SA properties
in Cologne, Frankfurt and Munich during the German
Oktoberfest, which attracts thousands of visitors
from all over Europe, and had the pleasure of observing
again the real and growing interest in SA property
among people from all walks of life. In fact, we will
be bringing more than 250 European buyers to SA in
the near future as a direct spin-off of these shows.
Meanwhile, the summer sales season here is in full
swing, and we thought we'd use this issue of Property
Signpost to illustrate the value of working with our
superbly trained and very experienced agents, especially
when the market is busy, the weather is hot and the
last thing home sellers and buyers really want to
do is worry about a contract.
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2.
If You Really
Want to Sell, Award a Mandate
If you really want to
sell, award a mandate.
As the shortage of residential property for sale in
many parts of certain areas worsens, increasing numbers
of hopeful buyers are trying to get round the problem
by commissioning estate agents to go out and find
them suitable properties.
And there's nothing wrong with that, of course, but
it can pose certain risks for home sellers. Without
a prior mandate from the seller, the estate agent
who introduces a buyer in such circumstances is actually
acting for that buyer, and has a primary duty to protect
the buyer's interests - which may well include the
responsibility to try to secure the property at the
best price for the buyer.
He or she could thus hardly be expected to advise
the seller not to accept an offer from the buyer because
the price is too low.
Sellers need to be aware that neither an agreement
to pay an agent's commission nor a willingness to
allow an agent to introduce potential buyers to their
property constitute a genuine mandate which would
require the agent to put the interests of the seller
first.
Another risk for sellers lies in accepting an offer
negotiated by an unmandated agent who is scouting
properties for buyers when they have already given
a genuine mandate to one or more agents to sell their
property.
This could quite easily give rise to a "double commission"
claim - which can only be avoided by obtaining a written
indemnity from the agent or agents who hold legitimate
mandates.
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3.
Now There's
More Than Price to the Choice of Location
Recent developments
in the property market, such as the rising popularity
of out-of-town estates and the increasing use of home
offices might appear to have undermine the three basic
requirements for successful property investment - position,
position and position.
Taking that view would, however, be an over-simplification
of a complex subject.
There used to be a relatively simple trade-off between
affordability and returns, with buyers who could afford
to buy in older, well-maintained suburbs able to look
forward to bigger and faster increases in home values
than those who bought properties in other areas. And
this held true even when the properties themselves were
comparable.
These days, things are much more complicated, because
there are more factors in play, and some of these now
carry more weight with potential buyers than the reputation
of the area or the possible future increase in the value
of a property.
For example, proximity to a highly-rated school will
add more value than it would have done just a few years
ago, and a clear route to an airport is more important
in today's highly mobile world. Soaring transport costs
and increased road congestion will make property near
the workplace much more valuable for many people.
Security is an ever-rising concern, and a home in a
secure complex with controlled entry and 24-hour patrols
will command a higher price than a similar, or even
bigger, home without these safeguards.
So, although the prime principle that position is critical
remains intact, the wise investor must be aware of changing
trends and demand patterns if they hope to enjoy the
best return on their money.
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4.
Get That
Loan - With Accurate Info
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Failing
to qualify for the loan you need to buy your dream
home can leave you feeling heartsick - but such disappointment
can often be avoided simply by giving your loan consultant
more accurate information.
To start with, when asked how much you make a month,
you need to provide the gross income figure, not the
amount you take home after tax and deductions.
Second, when asked to list your current debt commitments,
you should only include things like car and furniture
instalments, personal or student loans and credit
card debt - not your monthly expenditure on things
like groceries, school fees or municipal services.
And third, if you are paid by the week rather than
the month, remember that the 52 weeks in a year actually
equate to 13 months of income - not 12.
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5. When
Two Hearts Don't Beat As One…
A couple
married in community of property must both sign all
the relevant documents - especially the offer to purchase
- to ensure a valid sale.
However one spouse does not need the consent of the
other to award a mandate to an estate agent, even if
the property forms part of a joint estate.
And the other spouse cannot award a similar mandate
to another agent, or contest the rate of sales commission
agreed to in the original mandate.
This is just another twist in the complex legal framework
that governs the sale and purchase of residential property
in South Africa - and good reason for buyers to be ultra-cautious
in situations where there seems to be disagreement between
a couple about selling their property.
Working with an inexperienced agent who fails to ensure
that both husband and wife married in community of property
sign all documents could cost them dearly.
If a deal falls through, for example, because the second
spouse actually refuses to sign the sale agreement,
the buyer could lose out on interest that could have
been earned on a deposit, or on the purchase of another
suitable property where the sellers were not at odds.
And even if there is just a delay while the second signature
is sought, it might mean that the buyer incurs extra
holding costs on his own property, or has to pay rent
instead of starting to pay off his new home loan.
A properly trained and experienced estate agent, however,
will be aware of the potential pitfalls, and is unlikely
to have accepted a mandate signed by only one spouse
married in community of property in the first place.
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