Archive | August 2012

Tips On Insuring Your Home

home insurance

There are a variety of different types of home insurance that you can cover yourself for. The more of your home and potential risks that you insure against, the higher your premiums will be.  It is important to cover yourself in these different ways, as the cost of not insuring your house is far greater than what you might save by not covering all eventualities.

Different insurance companies will cover different threats. The more they cover on your behalf, the more expensive the insurance premium will be. At the very least, cover the likely dangers your home is at risk of, such as flooding or earthquake cover, if you live in an area susceptible to these risks.

The amount that you cover your home for should be more than the current value of the home. It should include the cost to rebuild in the event that the home is destroyed. Most insurers no longer insure a home for more than the market value, but rather at market value plus 25% to rebuild.

Home insurance should include a liability insurance policy, such as general liability. This policy protects the homeowner from any claims of damages and personal injury by third parties who may suffer such on your property.

A home insurance policy only covers the structure of the house and any fixtures, such as garages and geysers, so it is absolutely mandatory that you insure the valuables inside your home. This covers all non-fixed possessions for the same perils as the home insurance as well as for theft.

If you own a small business (and run it from your home, for example) it is also important to think of other risks you may face. Legal insurance might be necessary, and you should insure business assets separately from your home contents insurance so as to make a clear distinction between personal and business valuables, as insurance companies probably won’t payout for your business’ assets under home contents cover.

How Big Events Like The Olympics Impact On Real Estate

Olympics thames

The London 2012 Olympic rings floating down the Thames

As the Olympics has drawn to a close and the Paralympics is on the horizon, we take a look at how big events like the Olympics and the football World Cup impact on a city’s, or a country’s, property market.

Experts agree that the Fifa World Cup was successful in terms of foreign investment on the South African real estate market, with the increase in exposure and visitors playing a vital role in the property industry. Property prices are at a premium, especially in the highly sought-after areas across the country such as Sandton, Bishops Court, Camps Bay and other key residential areas. Many celebrities are now considering SA as an area to purchase property.

In early 2010, property prices were surging again – after a few years of low growth – and this surge was thanks to the boost the World Cup provided. This growth has since slowed, with the waning of football fever, lower economic growth, rising inflation and political corruption concerns.

In London, residential property prices in parts of the East of London where the main Olympic stadium is situated have gone up by £192 (R 2,500) a week since London was awarded the Games in July 2005, according to a new study.

Lloyds TSB research reveals a mixed picture for the East London housing market. Homeowners living close to the main site for the London 2012 Olympic and Paralympic Games have seen the value of their property rise by nearly £60,000 (R784,108)on average.

The average house price in the fourteen postal districts closest to the main site for the London 2012 Olympic and Paralympic Games rose by 28%, some £58,582 (R765, 577), from £208,148 (R2,720,177) in July 2005 to £266,730 (R3,485,785) in May 2011, equivalent to a weekly increase of £192 (R2,500).

Between the 27 July and the 12 August, the number of property sales agreed by Marsh & Parsons in London rose by 23% compared to the same period last year. The number of sales agreed was also 35% higher than during the same 17-day period in 2010.

Oddly, Stratford, the home of the Olympic Stadium, saw a 13% rise in house prices over the period, less than half the average increase across East London.

In Sydney, there was substantial real estate development the private sector in the period around the Olympics – this growth was assisted by the Olympics raising the profile of this area in Sydney. However, the price of real estate property had seen growth of 10% annually in Sydney from 1993 – 1999, but then dropped dramatically after the 2000 Olympics was over.

It is clear then that the infrastructure, tourism and hype provided by big events such as the world cup undoubtedly provide a much-needed boost to an economy in the short term, and to a certain extent play a role in long-term growth, especially when considering the improved transport links and infrastructure they provide. Factors such as this add greatly to real estate demands and values. However, the short bursts of growth that have been experienced in most cities or countries that have hosted these events is not sustained, and there needs to be a restructuring in how the impact of such events can be further sustained so that growth in sectors such as real estate and tourism see greater growth and overall economic development in the long run.

Selling Your House? How to Choose an Estate Agent:

If you are trying to sell your property, it is important that you make use of the services of an informed, professional estate agent to get the best out of your deal and ensure a hassle free process.

Here are the some important tips to keep in mind when selecting your estate agent:

1. Choose a few potential estate agents based on feedback from friends and relatives, colleagues, websites etc. While making a short list, focus on the agents’ experience. Find out some information on their background, what deals they’ve closed and how they would deal with your property sale if it was not selling as hoped.

2. Interview all the short-listed estate agents and gather information about their experience and credentials. Someone who has taken the time to qualify with related qualifications and has membership of professional organisations/bodies may help you negotiate a better deal and provide a better service.

3. Are you and the agent compatible? You’ll be doing a lot of communicating with your agent and this compatibility will make the process a lot easier in the future.

4. Choose an agent you can trust. Look for enthusiasm, dedication, creativity and market savvy. All of these will translate into extra efforts and you’ll definitely stand to benefit from that.

5. Know the team. Estate agents will have employees who will be equally representing yourself and the property sale. They should also be skilled and able to converse and communicate intelligently about all the details involved in your property transaction. Make sure whoever you are dealing with respects you and your time.

6. Make sure your estate agent understands exactly what you want and that he/she is capable of achieving that. That said, also make sure your expectations are realistic. An estate agent who offers a figure lower than you had envisaged may be giving an honest appraisal and not just telling you what you want to hear.

7. Choose an estate agent that has outstanding negotiation skills, personality and charisma. A good estate agent will first look to satisfy your target price, not that of the buyer.

8. Consider estate agents that are able to offer multiple advertising opportunities (including advertising on the internet) and in-house arrangement of property inspections.

9. Remember: Higher fees do not always represent better service.

10. Examine the contract closely and fully understand what you are committing to.

Good luck finding the right estate agent for you!

Why Use a Bond Originator?

Getting a home loan these days is not an easy undertaking and can become a very stressful process. Bond Originators promise to make the process of applying for a home loan much simpler. We look at exactly what they offer.

“When we started looking to buy our first house Leigh and I were both pretty young and struggled to get banks to take us seriously or to offer us decent lending rates,” says Luke Solomon. “Working with a bond originator was a lot easier – we had one person to deal with, and I had her personal cell number. She helped explain a lot of the jargon, and what was needed to get the process moving. She applied to all the major banks for us and negotiated a very good interest rate.”

BetterBond’s CEO Rudi Botha says that one of a bond originator’s most valuable services to a client is advice.  “The moment a buyer is interested in purchasing property, they should contact BetterBond for the right advice and guidance regarding all the leading banks’ current credit rules, the process from when an application is submitted to the time it registers and the cost involved from a transfer and registration point of view.”

“Bond originators are familiar with the peculiarities of each bank’s lending criteria and documentation requirements. Thus they are able to achieve the best possible deal with the least fuss. We have found, at times, that even private banking clients are not able to secure the best deal through their own bank. This is because each bank varies in its appetite to lend in certain price ranges and areas at any point in time,” says Gareth Bailey, CEO of Re/Max Address Property Group.

Buyers should approach a bond originator for a pre-approval as soon as they have decided to buy, says Botha. “The pre-approval document plays an integral part in the buying process offering some negotiating power when signing that offer to purchase. This document gives the buyer a good indication of what he or she could qualify for, placing them in a much more favourable position when viewing properties in a specific price range.”

Each bank does things differently and the specifics required by each bank can become overwhelming for buyers. A bond originator is familiar with all of the nuances of a particular institution’s criteria and they are, therefore, able to negotiate this process for clients.  “We monitor the applications from day one and provide feedback. We are able to negotiate, on the client’s behalf, a better interest rate and loan to value, doing our utmost to secure the client the best approval and most favourable interest rate,” explains Botha. “Having the ability to submit applications to the four leading banks in South Africa gives the client peace of mind that firstly every angle has been covered from an application submission point of view.”

Is working through a bond originator popular in South Africa? “On the whole, most deals are still done through originators as, most often, they are able to get the best deal for our clients,” says Bailey. “Overall bond origination in South Africa makes up 50% of the total bond approvals on a monthly basis,” says Botha. “1 in 4 South Africans have entrusted BetterBond to secure them the best deal and we have secured over 1 million approvals for people in South Africa.”

So, what does a buyer have to pay for the convenience, advice and professional service of a bond originator? The service is completely free as bond originators are contracted to the banks.

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