RSS Syndicated Property News Feed | Chilli Property

Buying Off Plan

info@chilliproperty.co.za (Administrator) — Tue, 04 May 2010 16:27:52 GMT

Buying into a new development can be a risky business. Uncertain market conditions have closed the doors of many property developers who could no longer afford to continue building. This can have severe consequences for potential purchasers who stand to lose their deposit (if not worse). It is therefore wise to only buy from property developers who are financially stable and are able to show an excellent track record. That said, buying a new property is truly wonderful. You have the opportunity to choose your own finishes and become part of a select fortunate few who can call themselves new home owners. Developers are aware of the present market conditions and are using this to their advantage by offering purchasers some unbelievable offers. Lets take a moment to look at what you can do to make sure that you are buying into a dream that will actually materialise.

Tip #1 - Do your homework

It is your responsibility to find out about the developer and to make sure that they are reputable and have delivered on their promises in the past. The best way to do this is to ask your estate agent about projects the developer has completed in the past. If they have at least 5 developments under their belt, chances are that they will be able to produce the goods and you can buy with confidence. There is no substitute for peace of mind.

Tip #2 - Know what you want before you start looking

If you plan on buying a new development, it is always best to have your affairs in order before you start looking. It is important to know how much you can buy for and what kind of property you want. Developers offer amazing deals and therefore the properties sell quickly. If you wait, you will lose out. If you fall in love with a property, you should be able to make an offer on the spot. Know that if you don't, it could be sold by the next day. Developers cannot afford to hold on to a property for you until you have made up your mind or sell your house. It has to be a quick and informed decision.

Tip #3 - Imagination is everything

When you buy into a new development there is no physical property to inspect. All you have are artistic renderings and floor plans. You have to use your imagination to envisage how your property will look once completed. If you feel uncertain, it is always best to visit previous developments which the developer has completed to get a feel for what the end result will look like. Do not be put off by a barren construction site. Let your imagination run wild !!

Tip #4 - Ask Questions

Before you make an appointment to view the development, ask your agent for all the marketing information so that when you meet, you can ask informed questions. Ask about the size of the unit, if the complex will be pet friendly and if the unit has a garage or carport.

Tip #5 - All good things come with time

Once you have bought your property, be prepared to wait. Developers can take up to 12 months to produce the finished result. This is a worst case scenario as we have seen developers deliver within 3-4 months. It all depends on the size of the development, the phase in which you have bought and the type of property which needs to be built. it is important to be sure when your home will be completed to that you can be prepared to take occupation.

Buying Property in South Africa

info@chilliproperty.co.za (Administrator) — Tue, 04 May 2010 16:27:02 GMT

Although the South African economy can be treacherous, with interest rates hikes and banks becoming extremely conservative with regards to whom they are willing to lend money, it remains categorically true that buying a property is the best investment you will ever make. Examining the last 20 years, we have seen a constant growth in the property market of up to 30% per annum. This outweighs the return on any investment bank account, stock or share. There is no other kind of investment in South Africa which offers that kind of return. It is also important to take note of the fact that it is a buyer’s market at the moment and there are many wonderful opportunities to seize, not only for investment purposes, but also to make your dreams come true in finding the perfect home for you and your family.

Step 1: Determine your affordability

When a bank examines your bond application, they generally work on the rule of thumb that your bond repayment should not exceed one third of your income. Many of us are not able to purchase a property if it were to depend on us alone. This is why in many instances husbands & wives, family and friends purchase a property together. Jointly, they can easily meet the bank's income criteria. The key point to remember is that your bond repayment can vary depending on the interest rate. Calculate a worst case scenario and make sure that you will still be able to afford your monthly bond repayment.

Step 2: Go hunting for the perfect home

There are many wonderful properties on offer, especially new developments. However, regardless of the price, the home has to speak to you personally. After all, you will be living there for some time. Consider the area, proximity to your job and schools. Think about the kind of property you want, be it a townhouse or a freestanding cluster. Sometimes, we do dream and feel inclined to reach higher than we ought to. Relax; it’s perfectly fine to feel that way. Remember that we all have to start somewhere. If your heart is set on a freestanding cluster, but you can't afford one, then consider buying am apartment and selling it a year or two later. The proceeds from doing this will certainly put in line to buy that beautiful cluster. It is definitely worth the wait! Sometimes it can be a daunting task to find that perfect property. This is when the services of a reputable estate agent are invaluable. We at MRealty assist our clients to find a perfect match and spare no expense in delivering excellent customer service. You should expect no less from any estate agent as you are making an important decision. The best advice we can give you is that when you find that perfect property and you are ready to buy - DO NOT WAIT. Properties in South Africa are sold on a first come - first served basis. If you like the property, then make an offer to purchase.

Step 3: Sign the documents

When you are ready to buy, an estate agent will assist you to make an offer to purchase. Once you have completed this document and the seller has signed it, the document then becomes a deed of sale (which is a binding contract). This document states the terms of purchase between all the parties involved and usually expires within a few days if the seller does not accept it. Make sure that the contract you are signing is from a reputable estate agent.

Step 4: Raise a mortgage bond

This step involves applying to the banks for home loan finance. Usually it is better to work with a mortgage originator to achieve the best results. They will fight on your behalf to make sure that you get the best possible interest rate. Your estate agent can usually refer you to a professional person. It is my experience that it is best to use an originator whom your estate agent is familiar with. If any problems arise, matters can be dealt with quickly which in turn results in better service for you. When buying from a property developer, they will usually insist that you make use of their in-house mortgage originators. This is a standard practice.

Step 5: Move into your new home

Once you have received a final grant from a bank and accepted it, the documents are forwarded to an attorney who is appointed by the seller or the developer. Once the attorney is ready, they will call you and make an appointment with you to sign all the required paperwork. Once this is completed, the documents are forwarded to the deeds office and the property is registered in your name. This process can take up to 8 weeks. Many sellers will allow you to take occupation of the property before it registers in your name. Should this be the case, you will be asked to pay occupational rent which is calculated between 0.8% - 1% of the purchase price.

Selling Your Property

info@chilliproperty.co.za (Administrator) — Tue, 04 May 2010 16:26:39 GMT

The decision to sell your property, your most prized possession, seldom an easy one. People sell their properties for a variety of reasons which include financial problems, relocating, the need to upsize or downsize into a suitable home. This can prove to be a daunting task for those who are not familiar with best practices and can lead to discomfort and stress. It is for this very reason that sellers employ the services of an estate agent. There are however, many pitfalls that sellers should be aware of. Let's take a look at a few pointers to get you started in the right direction ...

Tip #1 - Never sign a sole mandate with an Estate Agent

It's a numbers game. The more agents you have working on your property, the greater chance you have of selling it. Agents may tell you that unless you sign a sole mandate with them, that they are not willing to advertise your property. We can assure you that for every one agency that takes this stance, there are ten who don't and will happily work with you on an open mandate basis.

Tip #2 - Don't fall for the cheap tricks

There are websites which encourage sellers to "do it on their own" and not use estate agents. Although this does have some merit, remember that your primary goal is not to subscribe to someone else's doctrine of "anti-agent", but to sell your property to a qualified purchaser for the price you want. Do not lose sight of this goal ! We recommend that you use all the resources at your disposal to sell your property for the right price and in the shortest possible time frame.

Tip #3 - Finding a reputable agent

Although we encourage you to use all the resources at your disposal, it is important to find one agent who you are comfortable working with and giving them priority over the others. This agent should be mindful of your requirements and willing to make a real effort in selling your property. Make sure that the agent you decide to work with has a nice attitude and treats you with respect. You are the customer and you are doing them a favour by giving them the business.

Tip #4 - Play your part

Chilli Property has a professional team of agents who are able to assist you to market your property in reaching the correct audience. We advertise on all the popular websites and qualify our purchasers before introducing them to your property. We offer excellent service and free advice to make sure that you receive the maximum benefit from us. If you are in the market to sell your property, please contact us and we will be glad to assist you. We are more than happy to advertise your property free of charge.

Remember that selling your house does require participation from you and there are a few important points to remember to make sure that everything goes according to plan. Set aside viewing times during the week and weekend, when your agent can bring clients to view your property. Keep in mind that the agent cannot force a client to buy and that many people are going to be walking in and out of your home. Selling property is no easy task and the agent requires your support to do so. Do not change your mind and raise the selling price once you have agreed on it with the agent. Do not haggle with the agent after you have agreed on the commission. Remember that agents only get paid once the property is registered and that can take up to 3 months. Agents are real people with families who require an income every month.

Good news for buyers: SA Interest rates at an all time low!

info@chilliproperty.co.za (Administrator) — Tue, 04 May 2010 16:24:51 GMT

If you are considering the purchase of a property, then now is the time to act. The prime South African interest has fallen to a low of 10.0% - the lowest prime rate since 1988! This means lower bond repayments and of course and increase in affordability. We would however like to caution over-zealous property shoppers not to purchase for the maximum amount as the interest rate will shift in the future. It is inevitable. Remember that a home loan is a form of credit and should be used responsibly. Please consult with your banker or financial planner for professional and accurate advice regarding your personal financial situation.

There are also a number of other reasons as to why this is an opportune time to purchase property. We have recently recovered from a recession. Property prices are still low and the market is dominated by those looking to purchase property. Whilst good property deals still abound, this will not be the case forever. Property prices are set to increase within the next 12 – 18 months and the good property deals available today will be difficult if not impossible to source in the future. Property remains the ultimate investment vehicle and offer returns which beat the share market almost every other legitimate financial offering. Examples of this can be seen in high value areas like Sunninghill, Paulshof and other suburbs of Sandton. I remember selling two bedroom apartment units in these areas during 2004. The prices for such units averaged between R 300 000 and R 400 000. Today, it is virtually impossible to purchase one of these units for under R 750 000 – R 850 000. I challenge anyone to demonstrate a higher return on their capital on such a short space of time.

Investing in property is very lucrative, but requires a knowledgeable buyer or the assistance of a property professional to make intelligent property purchases. It is very important to purchase a property in a good area and at a market related price, ensuring that the property is in a good state of repair. If you would like professional advice in finding a property which is a sound investment, we would be glad to assist you. Chilli Property specializes in residential sales in the areas of Sandton, Midrand, Fourways and Randburg. Call us any time for a no obligation chat. We look forward to hearing from you!

The top reasons to buy property in a new development

info@chilliproperty.co.za (Administrator) — Tue, 04 May 2010 16:08:28 GMT

New property developments have become a topic of heated debate over the last few years. We have all heard the horror stories of property developers who have gone bust, leaving an inhospitable shell for the “would be owner” of a home. Although such incidents have been very damaging to financial institutions and property buyers alike, new property developments continue to thrive. Let’s look at some of the reasons why and what you can do to ensure that your purchase in a new property development is sound.

The Top Reasons:

No legal fees and costs: A purchase in a new property development does not attract transfer duty (which is normally payable to SARS) and the developer will usually opt to pay all other legal fees and costs on your behalf. You should confirm this prior to making a purchase.
Favorable Bank Valuation: Developers usually request a pre-valuation from all the major banks. This means that when you make a purchase, you know that the bank has already found value in the proposed property. You can ask the developer to see the pre-valuation certificates to verify this.
Personalization: Many developers give you the opportunity to choose your own finishes. This is usually a selection of tiles, carpets, paint and sometimes kitchen layouts or colors. You have the opportunity to choose a home that suits your tastes.
No Renovations: A brand new property requires no repairs and those funds can safely be used to purchase that dining room table or couch you always wanted.
Return on investment: If the development you have bought in has sold out, then you have clearly identified a market where there is a demand for property. You can easily sell your unit after it has transferred into your name and make a handsome profit.
Rental Returns: Due to the saving of legal fees and costs, it is usually possible to rent your unit out for a value which closely matches your monthly bond repayment.

It is important to note the difference between a sectional title and a full title property development, especially from a “safe investment” perspective. Full title developments require you to pay as they build which represents a major risk as stated in the first paragraph of this article. However, sectional title developments require the developer to produce a finished product (which you must sign for) before the bank will release any funds. This profound safety net means that you never have to take an unnecessary risk. The bottom line for developers: No House – No Pay ! If you would like assistance in finding a property in a new development, contact one of our expert property consultants at Chilli Property. We will be happy to guide you towards a safe and sound property investment opportunity.

Expect a property boom during the world cup – Fact or Fallacy?

info@chilliproperty.co.za (Administrator) — Tue, 04 May 2010 15:15:10 GMT

There have been a number of controversial reports regarding the attendance of foreign visitors to South Africa for the 2010 soccer world cup. Many of these reports suggest much lower numbers than anticipated by organizing bodies, whilst other bolster such figures to indicate a massive response. Be that as it may, we are all very interested to know how this event will affect the prices of residential property in South Africa. Will these foreigners run amok in a property-buying frenzy or will they idly pass by the opportunities in our residential property market?

The South African Property Transfer Guide (SAPTG) suggest in their newsletter that the world cup will not entice many foreigners to invest in residential property, but rather raise the level of confidence among local South African property buyers. My personal opinion is that the previously mentioned fact along with the all time low interest rates we are presently experiencing could quite possibly see this prediction coming to pass. I would, however, like offer a word of caution to over-zealous property owners. We are presently in a buyer’s market and will continue to be for some time. Fetching top dollar for your property is not a realistic expectation and your pricing must be in line with present market value if you are to have any hope of selling your property any time soon.

If you would like assistance with discovering a realistic value for your property, we would be glad to provide you with factual information sourced from the deeds office. Chilli Property specializes in the sale of residential property in Sandton, Midrand, Randburg and Fourways. We look forward to hearing from you. Please visit our website at www.chilliproperty.co.za for further information.