To make sure that you realize the best returns on your investment it is imperative that you do your homework before you purchase any property. If you are looking for a good return on your investment then remember that the three factors that will have the most significant impact are firstly location then features and lastly the price. The more sought after houses are in the suburb the better chance you have of reselling at a good profit in the long term. Proximity to schools, shops and hospitals will have a direct impact on the popularity of a suburb, or area in a suburb.

With all the excitement and stress that comes with buying property people often overlook important factors that could end up making your newly acquired home a lost more expensive than what you had bargained for. People tend to place too much value on the aesthetic appeal of property and underestimate the importance of assessing the integrity of its components.

To avoid unnecessary costs there are certain common flaws that you should look out for when inspecting a property with a view to purchasing it.

• Check the state of the roof as leakages can have a major impact on various other elements of the house, including the electrical components.
• Check the drainage on both the property and the perimeter roads as poor drainage can have a detrimental impact on the foundations of the buildings.
• Check all the woodwork on the buildings, especially in areas that have been exposed to moisture, such as in kitchens and bathrooms. Door and window frames may be in need of replacement, which could prove to be costly.
• Check the gutters and downpipes to make sure that they are in a good state of repair.
• Check all railings on decks, balconies and stairways and make sure that they are not loose or broken.
• Check the space between the ceiling and the roof for proper insulation. A house that is well ventilated should have ventilation ducts in the ceiling to allow heat in this area to escape.
• Check for leaks and damaged pipes under sinks and make sure that taps and toilets are in good working condition.

These are common flaws that you as layman will be able to detect without making use of a certified property inspector. If any of the above flaws are present you may wish to walk away from the sale. Generally if homeowners have neglected their homes in one area it is more than likely that there will be other areas that have been neglected. If you do however decide to purchase the property with its defects it is advisable to call in the expertise of a professional property inspector.

The services of professional property inspectors are invaluable when its comes to ascertaining whether there are any major defects and the costs associated with the repairs thereof if any defects in the property do in fact exist. Certified property inspectors will also be able to check for any renovations or additions that have been made to the property that have not been approved by the local municipality or that are not in accordance with building regulations.

Land surveyors will be able to assist you if there is any discrepancy about the boundary lines of the property. They will be able to research the original deed and stake out the boundary lines, thereby avoiding future disputes with neighbours and there will be no confusion as to the size of the property that you are purchasing.

Buying property is probably the most expensive purchase you will ever make – it is well worth your efforts to make sure you are buying wisely.

Finally it is vital that you shop around to make sure that you get the best deal for a bond on your property. Every financial institution that is in the market for bonds has its own unique strategy and these will change according to the current exposure requirements of the institution. Should the institution require exposure in a specific region, for example, Western Cape, then they might offer preferential rates to clients from that region applying for bonds.

In conclusion, take your time to ensure that you are purchasing the most suitable property at the best price and getting the best deal for your bond. This is more than likely a lifetime investment – make sure you can reap the benefits by doing your homework.

Agents have long been viewed with suspicion and while certain misgivings are occasionally justified, it is often not the agent attempting to pull the wool over a buyer’s eyes, but rather the seller who has been sparing with the truth. The Consumer Protection Act (CPA), however, is going to change the way that agents do business. As things stand, the Act does not apply to a seller who does not ordinarily sell property for a living. Estate agents on the other hand do and if the courts find that an agent has neglected to disclose pertinent information and facts then agents can be held responsible which could, in the worst case scenario, lead to the sale being overturned. It appears that agents are no longer going to be able to take the sellers word for it and they are going to have to delve into the property’s history to ensure that everything that the seller has stated is true.

Until such time when agents are compelled to dive into the property's history, it would be wise for potential home buyers to conduct their own home inspection by making use of a professional home inspection company. 

As you can see the seller will not always disclose the information to the agent, and unless the agent conducts a thorough investigation, some defects will not be exposed. At this stage most sellers are not bound by the Consumer Protection Act, and the agent can claim that the seller did not inform his/her when a case goes to court. 

For more information about home inspections ]]> http://homeloans-sa.co.za/content/the-truth-of-the-matter.htm/feed 0 http://homeloans-sa.co.za/content/news/home-improvements-and-renovations.htm http://homeloans-sa.co.za/content/news/home-improvements-and-renovations.htm#comments Mon, 16 Jan 2012 15:01:11 +0000 Chris du Toit http://homeloans-sa.co.za/?p=1430 Home renovations and improvements need careful planning and consideration to ensure that the money you spend on home improvements is money well spent.

Before you consider doing any home improvements it is wise to ensure that your home is in a good state of repair and that if you are considering adding on to your house that you can afford the additional maintenance, insurance, bond repayments and property taxes.

Property that is not well maintained can prove to be very costly when it comes to selling your home. No matter how much bigger your home is compared to those in the neighbourhood if the property is neglected it will not attract a good selling price.

Things to consider with home improvements and renovations:

1. Unless you are a qualified builder it is not recommended that you attempt any home renovations or home improvements yourself. Make use of a qualified builder and make sure that you have proof of his credentials. If possible get references from people who have made use of the builder for similar renovations. Builders who are members of Master Builders South Africa (MBSA) should be used when extensive or complicated renovations are being made. They are generally more expensive than other builders but considering the risk of using substandard builders who could cause expensive damage that could reduce the value of your property, it is well worth the additional expense.

2. What may seem acceptable to you now may prove to be an ugly and obvious add on in years to come. A qualified architect has the ability to differentiate between what will be an aesthetically pleasing renovation and what could turn your house into a monstrosity. It is recommended that you make use of an expert with all major home improvements and renovations.

3. Don’t fool yourself into thinking that you will increase the value of your property by the amount spent on renovations. Redoing your kitchen and/or bathrooms will not necessarily increase the resale value of your property although it will most certainly make it more of a pleasure living there and will probably make it more attractive to potential buyers should you wish to sell.

4. Beware of over-capitalising on your property. As location is the most important consideration for most potential homebuyers it does not make sense to increase the value of your property way above the average price of property in your neighbourhood. Homebuyers who have the means to pay more for property will look to buy in the most expensive suburb that they can afford to buy in.

5. Remember to notify your insurance broker of the increased insured value of your property if you have chosen to add on to the size of your home. Insured value of property is calculated taking the size of the buildings into consideration and you do not want to find yourself under-insured in the event of a claim.

Although the majority of media reports deal with the implications of the CPA from the seller’s perspective, potential property buyers must be made aware of what some sellers are doing to combat their increased liability in terms of the act.

Implications for the Seller

The “voetstoots” clause has for many years offered the sellers of property some measure of protection. Most sellers of second-hand property have in the past relied on the “voetstoots” or “as is” clause to protect themselves from any claim for defects that may become apparent after the sale of the property. In terms of common law however, buyers were able to sue the seller despite the inclusion of the “voetstoots” clause if the property was defective at the time of the sale and the seller knew of the defect but failed to disclose the defect to the buyer knowing that the defect would have influenced either the price of the sale or that if the buyer was aware of the defect would not have purchased the property.

In terms of the CPA it is now required that all material facts be disclosed and any misapprehensions on the part of the consumer be corrected by suppliers of goods or property, if failure to do so could be interpreted as deception.

In terms of the act the house buyer is entitled to expect that the property being purchased complies with all relevant legal standards, is of good quality and has no undisclosed defects.
The act defines “defects” as any imperfections that render the property less acceptable than “persons would reasonably be entitled to expect in the circumstances”

In terms of Section 55(5) of the CPA “it is irrelevant whether a product failure or defect was latent or patent, or whether it could have been detected by a consumer before taking delivery of the goods.”

In other words unless a house is in an immaculate condition the chances are that the buyer will be able to claim for the repairs of any defects making it a risky business to sell your house.

Sellers and agents who wish to protect themselves from liability under the CPA can commission a home inspection report at the outset and make the findings available to any potential buyers. This way all potential buyers will be aware of all defects and the costs to have these defects repaired. In terms of Section 55(6) of the CPA the buyer waives his right to receive a property free of defects if the buyer has been informed in detail of any defects and the buyer has “expressly agreed to accept the property in that condition”.

If however any undisclosed defects are discovered within six months after the buyer has taken delivery of the property then in terms of the CPA the buyer can demand redress. In terms of Section 56(2) of the act this redress places an obligation on the seller to “repair, replace or refund” Should the seller have the defects repaired then a further three month implied warranty is applicable in terms of Section 56(3).

It should be noted that a private once-off sale by people who do not sell property in their ordinary course of business is not within the ambit of the act and these sellers may still rely on the “voetstoots” clause.

To re-cap – the CPA now offers the buyers of property the right to purchase property without any defects unless the defects have been disclosed and the buyer expressly agrees to purchase the property with full knowledge of the defects. Furthermore the buyer is granted the right to redress if any undisclosed defects are discovered within six months of taking transfer of the property.

Implications for the Buyer

Without the protection offered by the “voetstoots” clause and with the added liability that the CPA has bestowed upon the sellers it is not too surprising to hear that often buyers are being asked to sign disclosure documentation before the property has been checked by an accredited home inspector.

There are many latent defects that only a qualified building inspector or structural engineer are likely to identify. By signing off disclosure documents in respect of key areas such as geyser conditions, damp problems and roofing you may be signing away your rights to a claim for defects in these areas making them your problem.

Buyers should not sign any sales agreements before an accredited home inspection has taken place and all sales agreements should be subject to a favourable inspection report.

A professional building inspector should provide a comprehensive report on the condition of both the exterior and interior of the property, disclosing any defects and recommending repair solutions. With this report you as buyer will be in a better position to make an informed decision as to whether or not you should purchase the property.

In countries such as the US, UK and Australia it is standard practice to make use of an accredited home inspector when buying property.

The purpose of the Consumer Protection Act is not to discourage people from buying or selling property but rather to protect consumers (buyers) from unscrupulous business practices. Unfortunately there will always be some who manage to find a way to circumvent the law to protect their own interests.

In Conclusion

Whether you are wanting to buy or sell property not making use of an accredited home inspector to highlight any defects may prove to be one of the most expensive mistakes you make.

House prices within South Africa have increased greatly over the past few years yet the average house prices remain some of the lowest round the world. There is also no time difference between the UK and South Africa making it easy to do business with one country whilst remaining in another – it also means there’s no jet lag to worry about when travelling between the two.

You can find property in South Africa along the coast, deep in the countryside or in one of the lively cities and here are three reasons you should chose to invest in the South African market.

Great long term investment

Due to the turbulent political history, the area has been left with a shortage of quality housing options and this is a high priority for the government. This means there is a long term view on the property market and the government are offering more advice and support to people looking to buy than ever before. It also means as the areas continue to improve, buying a property at the current rates will mean you should see your properties value increasing in future years.

Excellent for buy to rent properties

Increased interest and inflation rates have meant more and more people are choosing to rent property rather than buying. If you can afford to buy within the South African market, there is a high demand for properties available for rent. This is a great option for people not looking to move to South Africa straight away but want to benefit for the current low prices.

Huge savings opportunities

Property developers looking to invest in this area are encouraged by the high savings they can make. A part of this savings is due to generous tax breaks and extra savings are available for renovation projects. This has led to the commercial property market being the first choice for investment over many western countries.

When considering buying a property in South Africa or any other location abroad, this is a decision that should not be taken lightly. South Africa may not be the choice for everyone but with its wonderful scenery and international links, you’ll find it tough to find a market that is growing at a similar rate, especially one with so much support from the government.

This guest post was provided by the online business site Smarta.com who offers advice for people looking to start a business at home and abroad.

Banks remain cautious in home loan lending
http://www.sacommercialpropnews.co.za/property-types/housing-residential-property/3565-banks-remain-cautious-in-home-loan-lending.html

In spite of the interest rate being at a 33 year low, banks remain very cautious in terms of granting home loans with all information submitted to them being thoroughly analysed to ensure the applicant’s affordability, says Kim Pistor, legal advisor and conveyancing manager for Rabie Property Group.

Pistor said while it was relatively straight-forward to confirm the monthly earnings of salaried individuals, the same cannot be said for those who are self-employed.  “In these cases supporting documentation is a key element to a successful mortgage application with the banks requiring a financial history of the preceding two to three years.  

“These applications usually take longer to obtain bond approval as they are often initially declined due to the various banks tight criteria related to self-employed individuals.  It is often not the client’s own bank who eventually issues an approval and it is for this reason that the services of a mortgage originator are beneficial,” says Pistor.

There could a variety of reasons, why you, the homeowner, opt for mortgage refinancing. It ranges from reducing the rate of interest, shorten or lengthen the term of the loan, shifting from an adjustable rate mortgage (ARM) to a fixed rate mortgage (FRM) and vice versa. Aside from these, you sometimes opt for mortgage refinancing so as to tap your home equity to make some big purchases and for consolidating debts that you owe. Here discuss about the various reasons to take out a refinance mortgage.

To reduce the rate of interest

One of the main reasons to opt for mortgage refinancing is that it reduces the rate of interest. In other words, your monthly repayment amount gets reduced so that the mortgage loans become more affordable to you. As a thumb rule, it is said that if the rate of interest can be lowered down by at least 2%, it makes good sense to opt for mortgage refinancing. Lower rate of interest does not only help you save money, but it also helps you build equity in your home.

To change the term of the mortgage loan

If you want to pay off the mortgage loan in a shorter span of time, you can do that through mortgage refinancing. Again, if you face difficulty in making the monthly mortgage payment, you can reduce your monthly payment amount by increasing the term of the loan. This somewhat eases the pressure of making a very steep monthly mortgage payment.

Shifting from ARM to FRM and vice versa

While the initial rate of interest associated with ARM is less than the rate of interest associated with FRM, but subsequently the rate of interest associated with ARM may rise with every rise in the market rate of interest. In this situation, if you are into ARM, it makes sense for you to switch to the stability of a FRM. On the other hand, if you are into a FRM, and find that the market rate of interest as well as the rate associated with ARM is substantially lower than the rate of interest associated with FRM, you may opt for switching to ARM. However, this is possible only through refinance mortgage.

Apart from the above mentioned reasons, you can take out a mortgage refinance for few other reasons too. If you use mortgage refinancing carefully, it can also serve as an excellent tool to contain your debt. Again, with low monthly repayment, you can build up equity in your home much quickly.

Property Transaction Kit
http://thepropertymag.co.za/industry-news/3127-new-property-transaction-kit.html

Dianne Brock, the new general manager of the Western Cape Institute of Estate Agents, has recommended a new computerised property transaction kit.

The aim of this kit is to facilitate the sale and transfer of property in compliance with the stringent criteria of the new Consumer Protection Act.

The new kit, said Brock, covers every aspect of a property deal including the valuation, the role of the conveyancing attorney, the standard sale agreement, the title deed and the Surveyor General’s diagram of the property. Also included are the body corporate and homeowners’ association rules, building plans, the zoning certificate, the house inspection report and the beetle, electrical, plumbing and gas certificates, as well as a short legal section on dispute resolution. This encourages the insertion of a mediation of arbitration clause in the sale agreement and has recommendations on how to insure against litigation costs.

Absa lends up to 100 percent home loan
http://www.property24.com/articles/absa-lends-up-to-100-percent-home-loan/13990

Absa says it is still giving 100 percent loan-to-value to would-be home buyers even in this market but only if they qualify.

According to Sifiso Shongwe, managing executive of Absa Home Loans, loans are being granted across the board to applicants who qualify - meaning they have a good credit rating.

“Since the National Credit Act came into effect, the dynamics have changed and as banks, we have to exercise responsible lending,” says Shongwe.