Archive | February 2013

Get bond advice before you set out to buy a home

Real Estate AdvisorsA weaker rand and rising fuel prices, plus the hike in electricity charges just proposed by Eskom, could easily put paid to many families’ hopes of becoming home owners this year – unless they take steps now to counter the effects of these increases.

That’s according to Rudi Botha, CEO of leading mortgage originator BetterBond, who notes: “Some consumers are already taking on more debt just to cope with everyday expenses such as food, rent and school fees, and it is expected that wages and salaries will only rise at about half the rate of inflation this year.

“So the big cost-of-living increases that are on the way could push already-stretched household budgets past breaking point, unless consumers start immediately to prepare for them by cutting their expenses to the bone and doing everything they can to reduce their debt load.”

And this is especially urgent for those who are anxious to become home owners in the next year or two, he says.

“The reason is that the banks don’t only consider your income and credit record when deciding whether to approve a home loan, but also look closely at your regular monthly household expenses and your existing debt repayment commitments.

“They have to do this, in terms of the National Credit Act, to ensure that if you take on a monthly bond repayment commitment, it will not result in you being ‘over-indebted’ and ending up in financial trouble.”

Unfortunately, Botha says, the fact is that less than half of those currently keen to become home owners are likely to obtain a home loan now if they just apply without doing some serious financial preparation first.

“This is one of many reasons to consult a mortgage originator such as BetterBond very early in the home buying process, and certainly before making any home loan application.

“Our experts know exactly what the banks require and can advise prospective borrowers – free of charge – about what they might need to do to improve their financial profile before applying for a bond. At the same time they can suggest what price-range of homes would-be buyers should target so they don’t waste time looking at properties that are too expensive.

“Then once clients are ready to buy, we can submit their bond application to several banks at a time and negotiate the most favourable terms, which can make a significant difference to the eventual cost of their property, and their long-term financial well-being.”

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The art of selling to singles

Single home buyer

As noted in the BetterBond newsletter, families are not the same now as they used to be. Many are blended or multi-generational  for example, while others encompass a host of other variations on the traditional nuclear unit of mom, dad and 2,4 children.

But the changes don’t stop there, and agents – who have by and large been really good at dealing with all sorts of families – now also have to get to grips with the fact that a very large percentage of home buyers (and sellers) these days are not families at all, but single people, whose circumstances are just as varied.

Some have not married yet, some intend to stay single, some are divorced, some are widowed, some have children in their care, some don’t, but there is no arguing the fact that they are an important demographic in the market.

The latest US statistics show that at least 25% of new home purchases are being made by single people (two-thirds of them single women) and in SA, where 48% of households are headed by women, indications are that single buyers currently account for more than a third of all home purchases.

Consequently, we thought agents might like some pointers on how to serve such buyers better:

  • Don’t question their status. There is a real temptation in our society to regard adults who are not paired off as “strange” or to feel sorry for them. But people often have very good reasons for being and staying single – and they are none of your business. You should just ask your client about his or her goals for finding a home in the same way you would anyone else.
  • Don’t make assumptions about your clients’ lifestyle or property needs. The single person you might think of as the perfect buyer for a townhouse or an inner city loft might actually be pining for a big old house and a spacious garden. Instead just ask if there is any particular area they would prefer to live in, what type of home they have in mind, whether they need space for entertaining or for children, whether they would like a home office or a hobby room, and if there are any other special features on their wish-list –the same as you would anyone else.
  • Don’t automatically conclude they will need financial help because they only have one income coming in. Many young single buyers are helped by their parents and others may well have an existing property to sell (through you, hopefully) or a private or investment income that has nothing to do with their salary. Rather put the prospective single buyer together with your mortgage originator as soon as possible and let them work out what sort of bond the buyer is likely to qualify for, and what price range of properties he or she can afford.
  • Be kind. Bear in mind that moving from an apartment to a house, for example, is as big a lifestyle change for a single buyer as it is for a family. Others may just be getting used to living on their own, for the first time or perhaps after being divorced or widowed. So offer some practical help, like a list of reliable people they can call for repairs, insurance, and other home-related services, and an “area” guide to local shops, sports facilities, entertainment venues, places of worship and medical centres – just like you would to anyone else who bought a property through you.

Designer pieces for your home

Every dream home needs the perfect designer pieces to accompany it. We’ve compiled our favourite pieces from South African designers and fashionable retailers of designer furniture to give you some ideas to help you complete your home. From reception desks to outdoor loungers, you’re bound to see something you like.

Dream wonderful dreams as you sleep peacefully on this beautiful Oak Queen Pallet Bed. It is a stylish, simple and clean sleeping unit that retails from Weylandts for R5495. It would go well in an industrial, modern home surrounded by beige and white. The recycled pallet look is very fashionable currently, and the wheels make it easy to move (though hopefully they are sturdy, as you wouldn’t want to move around in your sleep!).

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This Tuxedo Chair from Herman Miller is exquisitely detailed. It comes either with or without arms, and the price is available on request. It has a sort of retro 70’s feel to it, and could be a nice contrast to an ultra-modern home, or would fit right in with any retro designer home.

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Build the perfect library with your very own stunning Library book shelf from Coricraft. This walnut antique-style bookshelf would be a wonderful addition to any study or lounge. The ladder gives it that ‘old Victorian home’ feel, and it would be great as a shelving unit or book shelf. The book shelf retails at R19995 from Coricraft.

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Make your outdoor area somewhere special with this stunning Voyage Outdoor Daybed by Kenneth Cobonpue. The ‘lounger’ is for sale at Weylandts, and retails from R48,500. Its stylish frame would look great in any outdoor setting, and its comfortable mattress and soft cushioning are ideal for lounging around the pool on those long lazy summer days.

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This Lampung Reception Desk with Burgundy Inlay would make a wonderful addition to any home entrance. It is simple and elegant, with several fine details added to give it the perfect finish.

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Make your move less stressful

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If you are moving to a new city, planning your move can significantly reduce the stress associated with moving house and city. Buying in an area that you know nothing about can be daunting; you may not know which neighbourhoods are good, where the best schools and universities are and your new home’s location to amenities and shopping centres.

Go online:

Research neighbourhoods online, so you know can get a feel for the sort of area you want to live in. To help this process along, try some of these tips:

  • Google the various neighbourhoods in the city you will be moving to
  • Do a search to see if there are any articles, reviews or blogs written about that area.
  • Once you have narrowed your search down, find out the location of your new neighbourhood to landmarks you may know in the city
  • If you don’t know any landmarks, look some up. This can give you an idea of where you are in relation to parks, shopping centres and other interesting places.
  • Look at what your route to work will be like; you may find the perfect neighbourhood, but you probably don’t want to drive an hour to get to work.
  • Determine house prices in various areas and see what people have to say about these areas and the facilities in them in online reviews – sites like Yelp are very helpful. You can even look at something like Trip Advisor which may have information on the neighbourhood you will be staying in.

Talk to Real Estate Agents

Agents can be a wealth of information about what a neighbourhood is really like. House prices might be great in the area you want to stay in, but is there a reason for that? Below are some tips for finding your home:

  • Find several real estate agents that you want to contact and ask them questions about the neighbourhood, crime in areas, where they would recommend looking in your price range, schools and other facilities in the area and why they would recommend it
  • If you are moving overseas, make sure you know what costs are involved with transfer fees, agent fees and any other hidden costs.

Find out about rates and costs

Different neighbourhoods often have different costs associated with living there. In London for example, people pay council tax – this can vary greatly from one side of a street to another, depending on what borough the city determines your home to be in. Similarly, in South Africa we pay rates. These can differ from city to city, and within suburbs of cities. You should therefore attempt to find out the rates of various neighbourhoods in the city, as this may be a factor in determining where you want to live.

Pick a place:

Once you have selected a neighbourhood, you can then find estate agents within that area. The estate agents you have already connected with might have a branch within the area you want to buy in, or you may have to do another search for agents in the area you want to buy in. You should interview the agents to get a sense of their personality, whether you trust them and how helpful they are. You may also be able to find reviews of the estate agents or their agencies online. Sites like hellopeter.com in South Africa are great for finding complaints or compliments about companies. Local agents also have information on your chosen area that is not readily available on the Internet, such as:

  • Recent comparable sales.
  • Average per-square-foot cost.
  • Recent crime statistics
  • Average house prices in that area

 

 

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