To all homeowners who are thinking of selling

 

We have recently conducted some in-depth research on property prices in the Summerstrand house market and we thought you may be interested to see what is currently happening in this area.


THESE ARE THE FACTS

  • During 2017, 23houses were sold for over R3m.
  • Around 38houses are for sale in Summerstrand over R3m on Property 24.
  • 22 of these have been on the market for over 3 months with many listed by multiple agencies.
  • Older listings generally achieve lower prices.
  • Open mandates mean no commitment by agents – The property becomes everyone’s listing and no one’s responsibility.
  • In 2018 (year to date) the average sold price for freehold houses in this suburb is R2 000 000.


WHAT IS MARKET VALUE?

A seller can only ever expect an agent to achieve MARKET VALUE for their Property.

Market value is the price a willing and able buyer will pay to a seller at any given point in time, in a free and open market.

Buyers buy by comparison.  They will view many properties (sometimes 14 plus) before making their decision.  Buyers are well informed about prices, value for money and make comparisons before making their decision.

BANK VALUATORS MUST STILL FIND VALUE FOR A BONDABLE SALE TO SUCCEED

Most buyers need bond finance to purchase.  Part of this process involves the bank sending out qualified valuators to the property, to advise if the property is worth the price being accepted by the seller.  Should they not find value, the bond will not be granted and the sale will not proceed.

Bear in mind that for a buyer to qualify for a R3million bond, they would need to earn in excess of R90 000!

PLEASE CONSIDER THE FOLLOWING IF YOUR PROPERTY IS ON THE MARKET AND NOT SELLING

  • How did your Agent arrive at this Price?We provide our clients with detailed market comparisons based on what has SOLD in the area.
  • Does your property offer the best value for money in the Summerstrand area? If not, it will not sell.
  • What resources does your Agent have to Market your home?
  • Does your Agent have a growing database of buyers, as a result of the fact that they specialise in the area and have regular show houses?
  • Does your Agent have experience selling in Summerstrand? We have specialised in the Beachfront area for over 20 years
  • Does your Agent have a proven track record of sales (not listings) in the Beachfront area?We sell our sole mandates in 28 days and achieve an average of a 5% variance between listing and selling price. Our last two sales achieved 100% of asking price.

 

COMMON MISTAKES SELLERS MAKE

  • To choose an agent who prices their home the highest, rather than based on their track record or ability to market and sell.
  • Price their home above market value in the initial, most crucial marketing period.
  • Neglect to ask for a marketing plan from the agents they interview.
  • Neglect to check out other properties for sale in the area (the competition)
  • Place the home on the market before it is in the best condition.
  • Fail to give proper viewing and show house access.

Has your Agent over-inflated the price of your property and lowered their commission just to get the Mandate?

 This will most certainly cost you more in the end and cause damage at the initial, most crucial stage of marketing.

If you need to sell and would like an honest, facts-based, market-related valuation, call the Beachfront specialists on 041 583 4034.

Humewood House Prices

TO ALL PROPERTY OWNERS

We have recently conducted some in-depth research on property prices in the Humewood house market and we thought you may be interested to see what we have found.

THESE ARE THE FACTS
• According to Lightstone deeds office information, since 1 Oct 16, only 5 houses were sold in Humewood for R2.8m or more. 4 of these were guesthouses and 1 was a newly built, modern home.
• There are currently in excess of 25 Humewood houses for sale over R3m on the Private Property website. Many of these are stale listings (older listings generally fetch below market value) and have been listed with multiple agencies. Open mandates mean no commitment by the agents – The property becomes everyone’s listing and no one’s responsibility.
• The average sold price for freehold houses is R2 325 000 (during Jan – May 18).

Market value is the price a willing and able buyer will pay to a seller at any given point in time, in a free and open market.

Buyers buy by comparison. They will view many properties (sometimes more than 14) before making their decision. Buyers are well informed about prices, value for money and make comparisons between the different properties before making their decision.

BANK VALUATORS MUST STILL FIND VALUE FOR A BONDABLE SALE TO SUCCEED

Most buyers will need bond finance for their purchase. Part of this process involves the bank sending out their valuators to the property, to advise if the property is worth the price being accepted by the seller. Should they not find value, the bond will not be granted and the sale will not proceed.

Bear in mind that for a buyer to qualify for a R3million bond, they would need to earn in excess of R90 000! The average household income range in Humewood is between R35 000 – R45 000 (source: Lightstone)

PLEASE CONSIDER THE FOLLOWING WHEN YOU INTERVIEW AGENTS TO SELL YOUR HOME
• How did your Agent arrive at the Price?
• Has your Agent discussed the comparable list of recently sold properties in your area with the prices achieved?
• Does your property offer the best value for money in the Humewood area? If not, it will not sell.
• What resources does your Agent have to Market your home?
• Does your Agent have a growing database of buyers, as a result of the fact that they specialise in the area and have regular showhouses?
• Does your Agent have experience selling in Humewood?
• Does your Agent have a proven track record of sales (not listings) in the Beachfront area?

COMMON MISTAKES SELLERS MAKE
• To choose an agent who prices their home the highest, rather than based on their track record or ability to market and sell.
• Price their home above market value in the initial marketing period – which is the most critical time to price it right.
• Neglect to ask for a marketing plan from the agents they interview.
• Neglect to check out other properties for sale in the area (the competition).
• Place the home on the market before it is in the best condition.

  • Fail to give proper viewing opportunities and show house access.

Don’t let your Agent over-inflate the price and lower their commission just to get the Mandate.  This will most certainly cost you more in the end.

If you need to sell and would like an honest, facts-based, market-related valuation, call the Beachfront specialists.
Kind Regards,

Nikki Strooh
Harcourts Beachfront
Mobile: 072 245 6037
Office: 041 583 4034
Email: nikki.strooh@harcourts.co.za

Calendar Events

 

1 Nov 2018 – Tourism Networking Expo – St Margaret’s Church Hall – marketing@pembba.co.za

3 Nov 2018 – Despatch Festival – Bothasrus Despatch – 082 608 5970

4 Nov 2018 – Donkin Street Festival – Heritage Cafe Central – 078 683 5274

9 Nov 2018 – Theuns Jordaan – The Barn – 083 760 0609

10 Nov 2018 – Ruan Josh & Franja du Plessis in Port Elizabeth – The Barn Greenbushes – 083 760 0609

24 Nov 2018 – Imibala Arts Festival – 076 967 7363

24 Nov 2018 – Christmas in the Park – Mount Pleasant – 079 129 9889

24 Nov 2018 – Donkin Reserve – 041 373 1796

2 Dec 2018 – Donkin Street Festival – Heritage Cafe – 078 683 5274

9 Dec 2018 – The Color Run – Port Elizabeth Harbour – 041 484 7860

 

 

WHAT EXACTLY IS COVERED BY AN ELECTRICAL WIRING CERTIFICATE?

Upon selling a property, the seller is responsible for providing a valid Electrical Certificate of Compliance by a qualified and certified Electrician.  What exactly does this include?

In a nutshell, it covers The Electrical Installation, also known as the Wiring (or even fixed wiring) between the MAIN SWITCH (point of control) and the supply terminals of appliances (point of consumption) or socket outlets.

This certificate does NOT cover appliances (ie kettle, oven, stove), however in the case where appliances are being sold with the property, it will be wise to have them checked to ensure they are functional.

Before appointing an electrician, make sure they are members of the ECA 041 363 1990.  That way you have peace of mind and added protection.

SOURCE:  ELECTRICAL CONTRACTORS ASSOCIATION (SA)

TRUST ISSUES IN REAL ESTATE

Selling a property is a big decision – it is more often than not, the biggest asset a seller owns.  It goes without saying then that it is crucial for the sale to be handled properly – Trust plays a critical aspect here.

A seller needs to have complete trust in the agent they appoint.  They need to believe that their agent is being transparent and working for them, not against them.  This is best achieved by giving a sole mandate – the agent will have a legal and contractual obligation to work in the best interests of the seller.  We at Harcourts Beachfront commit in writing, to a list of activities for our sole mandates.

When you interview agents, try to determine if they are able to substantiate their claims.  On what do they base their appraisal value?  Is it factual, or a lie to get your listing?  Do they commit to their marketing plan – and it is in writing?  What kind of service do they promise you – and is their service promise in writing?  What sort of track record and testimonials do they have?  Be sure that you are completely comfortable with their proposal and that they are committed to work for you, not against you.

Trust is something that is hard to find in today’s competitive business world.  And yet there are professional and ethical people that are an absolute pleasure to work with.  Work with the right people and value the trust that others have in you.

SOURCE:  HARCOURTS PLATINUM

CO-OWNING A PROPERTY AND THE BOND

Whether for financial or other reasons, people often invest in property as co-owners, whereby each owns an undivided share in the property. It would be prudent in these instances, to draw up a co-ownership agreement.

Buyers in this situation should not forget that no matter what they agree to with regards to split in shares in the property, maintenance, occupation or income from the property, their agreement will not bind third parties such as banks or municipalities.

For example, the bank that grants the home loan will generally insist that both (or all co-owners) agree to be ‘jointly and severally’ liable to repay that loan. This means that the bank may recover the debt from all of the debtors in proportion to their shares or, if necessary, to recover the whole amount from any one of them. So, if one co-owner should fall on hard times or stop paying for any reason, the others will be required to make up the difference.

SOURCE:  OOBA, EXPERTS IN HOME FINANCE

BUYERS ARE BUYING, BUT ARE PRUDENT

More properties are coming onto the market as property owners decide to access the equity in their property or reduce their debt.  This leaves buyers with more properties to choose from, however they are shopping wisely and are very aware of what properties are worth.  They react only to properties that represent the best value.

Our research shows that buyers generally respond to properties that are listed within 2-5% of their actual market value.  That means that if a property is listed outside this range, buyers may see it advertised but won’t respond to it.

It’s no surprise then that there may be a decrease in the number of enquiries on properties, and in many cases, properties may go weeks without enquiries or viewings.  That’s a sure sign the list price isn’t close enough to current market value – and that something needs to be done in order to attract buyers.

It’s important to realise that, if you’re a buyer who is upgrading, what you lose on the swings you gain on the roundabouts.  If you sell low, you will also buy low.  So, if you’ve made the decision to sell, then listen to the market and get your home sold.  Your ability to negotiate improves significantly once you have sold your existing property.  For more information, please contact your Harcourts Beachfront sales consultant on 041 583 4034.

SOURCE:  HARCOURTS PLATINUM

 

 

Will Technology Replace the Real Estate Agent? by Harcourts Platinum

When you look at some other industries, such as the Travel Industry, technology has had a significant impact on their viability.  I travel extensively and I haven’t used a travel agent for many years.  Does this mean that real estate agents will perhaps be replaced by technology in the near future?

If you think about it, buyers now have access to most property listings through the property portals – much in the same way that a traveller can access flight and hotel prices online.  Wouldn’t it be possible for a buyer to purchase a property online and cut the agent out altogether?  Technically it’s possible – but is this good for a seller?

The short answer, I believe, is “no”. It’s not good for a seller and therefore technology won’t replace the skilled estate agent.  But what it will do is ensure that estate agents need to demonstrate their value to the seller in order to survive.

When an airline sells their seats they do so on price.  That’s the price and you either pay it or choose another flight offering you better value.  There is no negotiation.

In real estate, there is a very real negotiation between the seller and various buyers that show interest – and the way this negotiation is handled will make a significant difference to the price the seller will get.  Technology cannot replace the skilled estate agent in this process.

Every seller wants to sell his property for the maximum market value.  In order to achieve this, marketing and selling strategies need to be employed to attract maximum buyer interest.  This is where technology does play a large role – and it’s important that skilled agents use the technologies available to ensure a listing is exposed so as to appeal to a wide buyer pool.

The agent then needs to work that interest to the point where buyers make written offers to purchase a property.  There are many components to an offer that can be negotiated until both buyer and seller agree: price, terms, and timing.  A lower offer with better terms and timing could be much more attractive to a seller than a slightly higher offer with onerous conditions.

Additionally, a seller would need to know from their agent what other potential interest there may be before accepting an offer.  Could there be other pending offers?  Could the agent get the buyers to compete for the property?

It’s not uncommon for a skilled agent to sell a property at more than the list price.  We recently closed a sale at 12% above list price, much to the delight of the seller.  Technology would not be able to achieve the same result and the human element that manages the negotiation is critical to the result.

That doesn’t mean that all agents are indispensable.  Only those who demonstrate their ability to use technology and their marketing strategies to create buyer competition, and who have strong negotiation skills, will add real value to the seller.

If you would like to know what your Harcourts Beachfront agent can do for you, give us a call on 041 583 4034.

SOURCE:  HARCOURTS PLATINUM

8 things to check before renting an apartment

Finding a new apartment to rent can be an exciting and promising time for any tenant, whether you’re new to the rental game or an experienced player. But jumping head first into a new lease without first carrying out an in-depth walk through could leave you with a fair amount of unnecessary woe to deal with.

Tenants should always insist on viewing a property before signing on the dotted line. Besides being able to spot potential issues, you will avoid the risk of falling for rental scams. Not only is signing a lease without viewing the apartment ill-advised, tenants often run the risk of falling for rental scams when doing so.

Below is a list of things to pay close attention to while viewing a potential apartment:

1. Doors and windows

Be sure to check that all the doors and windows open and close easily, especially sliding doors! Also make sure that the doorknobs aren’t wobbly and that the locks work. If any locks are broken or missing, be sure to bring this to the landlord’s attention so that you feel safe should you choose to move in. It’s also worth taking note of any draughts or sealing issues as this could make a difference to your electricity bill when it comes to heating or cooling the apartment.

2. Walls and floors

While a small crack in the wall isn’t anything to be too concerned about, any crack that you can slide a 50c coin into could be a sign of bad structural integrity. In fact, spotting any structural flaws should serve as a warning to rather set your sights elsewhere.

Also, be on the lookout for any water damage or watermarks near the floorboards, on ceilings, and on the walls. Water damage indicates that something is leaking somewhere, which means that mould, mildew, or rot could set in if it hasn’t already. This could pose a serious health risk especially for those prone to allergies or respiratory infections.

3. Appliances

Although most apartments in South Africa come unfurnished, it is worthwhile checking that all supplied appliances are in good working order.

Check that the stove plates and/or gas hobs work and that the oven heats up and is free of grease or cooking build-up. Also, be sure to check that the fridge is cold, if one is provided, and if there’s a washing machine and tumble dryer, look inside to make sure that these too have been well maintained.

4. Consider your furniture

A common mistake tenants make is signing the lease on an apartment before checking if their furniture will fit in come moving day. One sure way to avoid this is to measure all big-ticket items like beds and couches before viewing the apartment so that you have an idea of whether it can fit as well as how things can potentially be configured should you choose to move in. It may even be worthwhile taking along a tape measure to measure the floor space for even greater accuracy.

5. Cellphone signal

It might sound unlikely in this day and age, but some areas still don’t have the best cellphone reception. With this in mind, take a moment to check your phone’s signal and connectivity during your walk through. If the lease includes WiFi, ask the landlord to demonstrate that it works and that it is currently connected with a strong signal.

6. Crime

Living in a country where crime is an everyday concern means that it’s important to get to know the area you could end up living in. Check the security features of the apartment i.e. is the property access controlled by a guard or does it have an alarm system. It’s also worthwhile finding out where the local police station is and asking them, or even existing tenants, what crime is like in the area. If they are unable to assist, a simple Google search might help give you a good idea of any crime statistics and reports.

7. Parking

If you own a car, parking arrangements should definitely be on your list of things to check out. In many neighbourhoods – especially in the city – street parking can be hard to find or unsafe for both you and your vehicle. Finding an apartment with a garage and/or an inside parking bay is therefore a necessity. Remember to ask whether the apartment comes with allocated parking and whether there is an additional cost for this.

8. Noise levels

Before leaving, take a moment to listen to the neighbourhood and surrounding noise levels. Note how loud the traffic is, whether there are barking dogs or how easy it is to hear your neighbours. If you really like the apartment, try visit more than once and spend some time in the surrounding neighbourhood during the day and night. You may find that it’s much noisier at night, for example, so this will give you a better idea of what you’re in for.

While these are just some factors to be aware of when flat-hunting, there are many others – like checking for signs of pests, making a note of how easy the apartment was to find, looking at the upkeep of communal areas etc. Considering these factors when viewing potential apartments can help you find the right apartment and ensure that you aren’t caught off-guard later.

Once the lease is signed, you’re in it for the long haul so make sure that the apartment you choose doesn’t have any major issues that will make lead to renter’s regret.

Tough Market Calls for Different Strategies

Yes, the market isn’t what most sellers would like it to be.  Difficult economic times are definitely impacting buyer demand.  Inflation is increasing, incomes are not, and many businesses are taking strain under the conditions.  The result is that buyer demand has decreased.  It’s a reality, and there is nothing that any agent or seller can do about the state of the market and the economy.

 

But that doesn’t mean that, if you’re selling, you can’t achieve a good result.  In order to do so, your selling strategies will need to change.

 

As with all markets, when demand decreases and supply increases there is usually downward pressure on pricing.  We’re seeing the same happen in the local property market.  Volumes of sales are down by about 50% in most price ranges.

 

There is no need to panic.  It doesn’t mean that property prices are drastically falling.  What it does mean is that buyers now have more properties to choose from and they are only reacting to properties that represent the best value.

 

We sometimes have sellers suggest to us that the price on their property has no bearing on buyer enquiry.  Nothing could be further from the truth.  Price creates interest.  That’s why shops have “sales”.  It doesn’t matter how much you want a product. If the price doesn’t reflect the fair value you won’t be purchasing it.

 

The facts clearly show that we’re in a very different market to the one we’ve become used to in the last few years.  It’s hard to believe that many agents haven’t adjusted their strategies to cater to this very different market.  The result is that properties will sit on the market with few viewings and no offers.

 

So what needs to change to get a result?  For one thing, the approach to pricing needs to change.  If there are 50 properties on the market with a similar offering, buyers won’t view them all.  They will view the listings that seem to represent the best value.  Their shortlist won’t include overpriced properties.

 

Our research shows that buyers react to properties that are listed at less than 5% above market value in this type of market.  If you’re 15% overpriced you simply won’t attract the right buyers.  Despite this, we see many agents overpricing properties by as much as 35% in order to “buy” a listing.

 

This practice of overpricing isn’t only unethical, but it will cost a seller dearly when they have to sell for less than market value after many months on the market.  Don’t’ fall into this trap.  More than ever, your pricing is critical to you attracting the right buyers and selling for fair market value.

 

In addition to pricing, there are other strategies that need to be implemented in order to achieve a sale in a tough market.  If you have a property to sell, select an agent who can demonstrate what they are doing differently in the current market to get you the result that you deserve.

 

Steve Caradoc-Davies

Principal, Harcourts Platinum