As another financial year draws to a close, taxpayers will be getting their affairs in order and getting ready to submit their tax returns. Many will be assessing their financial situation and looking at the tax deductions that they will be able to claim back from the Receiver of Revenue. When it comes to tax deductions, a taxpayer is entitled to their claim; however the onus falls on them to prove that a particular amount is deductible, as well as justify the claim by showing the calculation of how they arrived at the deduction figure.

Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that although many homeowners will qualify for a tax deduction, it is sometimes a difficult task for them to establish the amount of interest on their bond that is tax deductible.  “In certain situations, however simple they may seem at first, there can be complications and queries that could possibly arise. Therefore a homeowner needs to make doubly sure that they know what they are doing, or if they are in doubt they should consult with a professional tax consultant,” advises Goslett. 

Working on a home purchased for R1 million, Goslett says that if the homeowner works from home and uses 20% of the property as a home office based on the square meterage calculation, they will be entitled to a tax deduction based on the interest charged on the remaining outstanding bond amount. “If the homeowner has paid off a portion of the bond and currently owes R800 000 and the interest on the bond is charged at 14%, they will be charged R112 000 interest for the year. Because 20% of the property is used as a home office, the homeowner would be entitled to claim 20% of the R112 000 as a tax deduction in the production of their income,” explains Goslett. 

He adds that it is important to remember that a homeowner will only qualify for a home office deduction if they are employed; working for a salary and a condition of the employment is to carry the cost of keeping a home office as the homeowner’s central business location. 

Goslett says that if the homeowner owes R800 000 on their bond and then decides to draw a further R100 000 to finance personal expenses, they will not be able to take into account the tax amount on the additional money taken, as this is not in the production of income. “Any interest that is charged on the additional R100 000 will be excluded from the calculation of deductible interest from the time it is taken, going forward for all the years that the homeowner carries the bond.  Essentially what this means is that a smaller percentage of the initial 20% of the interest reflected on the bond statement is tax deductible from then onwards,” Goslett explains.

He adds that the percentage of deductible interest will continue to change as the homeowner makes further withdrawals from their bond account for other non-income producing purposes. 

According to Goslett, on the flipside of the coin where the homeowner would like to make a substantial payment into their bond, such as an inheritance payout for example, they will not have the option to only allocate their money to the 80% private portion on the bond and not impact the other 20% that is regarded as business use. “A homeowner may want to only pay the money towards the 80% to maintain the value of the deductible portion of the bond. However this is not possible as the bond is regarded as one account that cannot be divided or proportioned into separate segments. Regardless of how the home is divided and what percentage is for personal use and what percentage is for business use, the bond is over the entire property. This means that any money that is allocated to the bond account will reduce the balance of the bond in its entirety,” explains Goslett.

He notes that for this reason, if the homeowner has any other loans that are not tax-deductible, it might be a better option from a tax planning perspective to allocate the inheritance to pay off those loans instead. 

“As a homeowner, figuring out tax deductibles can sometimes be a rather overwhelming experience. If there is ever any area of doubt, it is best to consult with a professional financial adviser or tax consultant who can provide assistance and guidance through the process,” Goslett concludes.

With residential electricity tariffs increasing annually, South Africans are encouraged to find ways to reduce their household energy consumption, especially considering the fact that households with higher consumption levels are charged more for the units of electricity that they use. 

Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that a growing number of property buyers are looking to buy homes that offer green elements to reduce their household energy consumption and the overall cost of running a property. “The term ‘green’ is not a new concept within the property market; however with electricity pricing pressure it continues to gain momentum among homebuyers. More and more buyers consider energy efficiency as an important factor when searching for the ideal property,” says Goslett. “Last year the National Association of Home Builders (NAHB) conducted a study which revealed that apart from a safe neighbourhood, the factor that influenced home-buying decisions the most was a home’s energy efficiency. Aside from the cost factor, the reason for this is a movement towards being more environmentally conscience and reducing the household’s carbon footprint.”

He adds that most homeowners who decide to introduce green elements to the home do so to reduce their utility costs and conserve energy, however going fully green can sometimes be challenging. It is important to remember though, that the homeowner can start by making small changes such as installing energy-efficient lighting. “Consistent small changes will add up and make a big difference over time. Once a few changes have been made the homeowner will be able to compare their utility bills and see a reduction of costs. This can be used by an estate agent to market the property when the homeowner decides to sell. If the property offers similar features to others in the area, but costs less to operate, it will at the very least grab buyers’ attention,” says Goslett.

He adds that there are a lot of different green products available on the market, so it is vital that homeowners carefully consider their options and make the correct decisions when selecting the green elements they use. Goslett says that when looking at green products, there are several factors that homeowners should be aware of:

• It is vital to ensure that the area where the product is being installed is appropriately insulated.

• High-efficiency windows are a better option than those that only just meet energy-efficiency standards.

• Use only low-flow water fixtures.

• Appliances are graded from ‘A’ to ‘G’ to indicate the energy consumption of the product, with the letter ‘A’ indicating that it is the most energy-efficient.

Goslett says that due to the trend of buyers specifically looking for homes with green features and many buyers prepared to pay more for these homes, the homeowner will recoup a large percentage of their cost back when they sell. “According to the NAHB, approximately 61% of homebuyers would be prepared to pay an additional R50 000 to R100 000 on a home that had features which would reduce utility costs,” says Goslett. “Adding green features can add value to the property and give the seller an added advantage in the market.”

Goslett concludes by saying that although going green will save money on utility costs and attract buyers to the home - it is not the only reason. It is also about sustainability and reducing the household’s effect on the environment and its surroundings.

With 2016 predicted to be a financially tough year, those who have aspirations to get into the property market will need to take stock of their financial position and assess whether they are on the right track to achieve their goal, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. 

“The expected interest rate hikes, along with the rising price of electricity and food will place further pressure on potential homebuyers this year. Added to this, financial institutions have already started to increase the cost of lending and reduce their risk by increasing the percentage of deposits required by bond applicants,” says Goslett. “With the more stringent requirements that are being introduced by banks, it is becoming increasingly important for would-be homeowners to prepare financially and increase their affordability ratio as much as possible. This can be done by reducing debt levels where possible and putting money aside in an interest-bearing savings account.”

According to Goslett, even a small additional payment of R100 a month can make a big difference when it comes to reducing debt levels over time and showing progress. “Setting savings aside will also create an emergency fund that will help the prospective homebuyer to stay out of potential future debt,” advises Goslett.  

He notes that financial planning and preparation doesn’t only apply to aspiring homebuyers, but to current homeowners as well. “A homeowner might want to add on to their home or renovate, which may require applying for additional finance.  Regardless of whether you are an aspiring homeowner or current homeowner, taking the time to assess your financial standing will give consumers the opportunity to introspectively examine what needs to be done to attain their financial objectives,” says Goslett.

When doing a financial review, Goslett suggests that consumers look at three aspects in particular, namely their resources, goals and priorities. Over the course of a year there could be numerous major life changes that will have an impact on the consumer’s financial situation and how they need to adjust their plan to meet their goals. “

“A major life change such as a marriage, birth of a child, a death or starting a new business venture, will definitely change the consumer’s needs and perhaps the time frame required to purchase a home. A growing family who are living in a home that no longer meets their needs will want to purchase a home as quickly as possible, which would mean that more money would need to be set aside for the deposit and other costs associated with a property transaction. Consulting with a professional financial planner will be very valuable to those who require strategies for time-sensitive objectives,” says Goslett. 

He adds that a tax consultant will also be able to guide the consumer as to how any life changes, such as marriage, may have impacted their tax status. “Having all their financial affairs in order will also make it far easier for consumers to submit an annual tax return. Having a record of receipts and financial documents will provide the consumer will valuable information regarding their spending habits and how much is spent on deductible items. This will also assist them in assessing whether they are paying too much for expenses such as insurance, flexible spending accounts, cell phone contracts and even investment fees,” says Goslett.

It is always beneficial to monitor a financial plan and have benchmarks in place in order to measure its success. “If there are performance perimeters in place it will be easy for the potential homebuyer to assess their financial plan and make adjustments if necessary. Making the required changes should be done as soon as possible, to ensure the best possible outcome in the shortest amount of time,” advises Goslett. 

He notes that consumers need to be aware of how they are spending their money and what needs to be implemented to achieve their homeownership goals. “Ideally a potential homebuyer needs to take the time to examine their life goals and determine what course of action they will need to take to attain these objectives. With the right plan in place, nothing is impossible,” Goslett concludes.

Irrespective of whether it is an investor who has found an excellent income-generating rental property or a homeowner who is renting out a cottage on their property, there is more to being a landlord than simply collecting a rental cheque each month. This is according to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who says that owning and letting out a rental property can often be an involved process that can demand a reasonable amount of time, depending on the circumstances.  

“Although the idea of becoming a landlord and earning some extra money can be an alluring endeavour, it is vital that the owner of the property be fully prepared for what being a landlord entails. Doing some research and understanding what is required as a landlord, will put the owner of the rental property in the best position to handle whatever may come their way and make for a successful venture,” says Goslett.

He provides first-time and potential landlords with five key elements to consider when entering the property rental business:

1. Property is a long-term investment

The reality is that while a rental property may pay for itself over the long term, initially the landlord will probably have to put in money to cover all the costs of owning the property. “While it does happen, it is rare that the rent amount will cover all of the costs involved in owning the property from day one. Whether it is a section of the bond repayment that is not covered by the rent amount or maintenance costs, a landlord will more than likely have to put money into the property each month,” says Goslett.

He notes that owning a rental property is not a get-rich-quick business venture, but over time as the rental amount increases and the asset appreciates in value, it can be used as a cornerstone on which to build wealth. “When it comes to seeing a profit from a rental property, it is best to view it as a marathon and not a sprint,” Goslett advises. 

2. Know the numbers

When it comes to owning a property - the bond repayment is not the only expense. Potential landlords need to consider aspects such as general maintenance, insurance, rates and taxes and possibly the services of an attorney or a professional rental agent. An attorney is a valuable asset to a landlord when it comes to drawing up lease agreements, giving sound advice regarding the landlord’s legal rights and responsibilities, and dealing with defaulting tenants. A rental agent will take care of screening and vetting tenants, collecting the monthly rental and general management of the property.

“It is advisable for landlords to set aside a contingency fund in order to deal with the upkeep of the property, along with any other unforeseen circumstances or repairs that require attention. By knowing the numbers and budgeting for expenditure, the landlord will be able to allocate money in the correct manner,” says Goslett. 

3. Have a checklist

The checklist will be used when a tenant moves in and when they move out. It will include all items that the landlord will need to go over carefully with the tenant when handing over the keys.  A checklist will ensure that nothing is overlooked and that all important aspects that need to be addressed are seen to. It is also far easier to check the property for any potential hazards or things that need to be fixed before the tenant moves in, rather than when they are already there and settled. 

Goslett says that items to add to the list could include the following:

• Check that the stove is in working order.

• Check all lights and electrical points.

• Ensure the geyser is working correctly.

• Check for any leaks or damp that needs waterproofing.

• Check that the gutters are unclogged and clear of debris.

Having a checklist will ensure that the landlord is well-organised for years to come.

4. Ensure all contracts are detailed 

To avoid any future complications or misunderstandings, all stipulations should be clearly stated upfront in a detailed contract. The more detailed the contract and the more issues that it deals with, the smoother the rental will be. According to Goslett, if all the important elements are included in the document there will be no areas that are left open for interpretation. Aspects such as acceptable tenant behaviour, breakage costs, preferred method of payment and date that the rental is payable by should be all included. 

5. Selecting the right tenants

Tenant selection will have a massive impact on the financial success of the property rental. For this reason, each tenant should be carefully vetted before they rent out the property. The landlord should enquire about details of the tenant’s previous rental history, reasons they are moving, their place of employment and income. Landlords should contact the given references in order to verify as much of the information as possible. “The tenant selection process is where the services of a rental agent will come in handy, as they will be able to professionally vet all possible tenants. While it is not legal to discriminate against any tenant, it is also not wise to simply accept tenants on a first-come-first-serve basis,” advises Goslett.  

He concludes by saying that while owning a rental property and becoming a landlord can be hard work, it is also an opportunity for the landlord to create wealth over the long term. Goslett notes that the key element to success is to always view property investment with the future in mind.

When it comes to a long term investment, there are few asset classes that have the same benefits as property, especially when it comes to building a foundation on which to grow personal wealth. 

Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that many astute property buyers who have followed the key principles of property investment have been able to reap the rewards of their actions and see good returns on their investment. “Even with the correction in the market experienced post 2007, those who got into the market at the right time and made the correct decisions at the beginning of the process, would have seen substantial growth in their investment value,” says Goslett.  

He adds that the key to unlocking investment potential is knowledge. “Regardless of the type of investment, it is always best to choose something that you understand. For property investors it is important that they research the market and understand the environment in which they are buying, or for that matter selling property. Knowledge and understanding will play a vital role in the success of any investment venture,” advises Goslett. “Investors need to know what factors have an impact on the market, along with how these aspects influence the market.  All of the fundamentals of investment should be carefully measured to ensure that an informed decision is made. It is important to consider elements such as the property’s location, the type of property, market phase and future appreciation potential. Regardless of the circumstances surrounding the transaction, these elements should always be taken into account,” advises Goslett. 

Although there will be a fee, consulting with a professional financial adviser will assist the investor to make the best possible decision. “Seeking professional advice will come at a cost – but not seeking advice could come at a greater one.  Gaining insight from a seasoned property investor or financial adviser could be the difference between a sound property investment and pouring finances into a money trap.  However, having said that, a real estate investment is far less volatile and more forgiving than many other investment vehicles such as share or equity markets,” says Goslett. 

He notes that while the share and equity markets often fluctuate over the investment period, over the long term property values appreciate far more steadily. The property market is cyclical in nature, so if the investor watches and understands the market influences they will be able to time their entry into the market. When compared with other assets, property market cycles make it far more accurate to estimate a return on investment. While other investment options need to be sold at the exact right moment to reap the maximum reward, property investors do not have to sell only when the market is at its highest to see the benefit of the investment. 

According to Goslett, a major advantage to property investment is the fact that the owner of the property has complete control over their asset. It is also one of the only forms of investment that can be financed and used as leverage. “Property can be used as collateral against itself, so banks are willing to grant property buyers finance to buy. Because the value of the property continues to grow, banks know that they will be able to largely mitigate their losses by selling the property if the buyer defaults. As a result financing property is far less risky for financial institutions than financing any other type of asset class,” says Goslett.  

An ideal investment is one that outgrows inflation, or at the very least matches it. This is known as an inflation-hedged investment, of which property is one. As the value of the property increases over time, the outstanding bond amount will decrease. There is also the addition benefit of being able to let the property out and receive a rental income, which will assist in paying for the growing asset. 

Depending on the method of investment, another benefit to South African residents is that buying property will not attract tax. While Capital Gains Tax (CGT) may be levied at the sale of the property, this will be dependent on the amount that the property is sold for.  “If the investor chooses to let out the property, any income received will be taxed as normal, however the investor will be able to claim tax deductions for maintenance, along with the interest portion of the bond on rental properties,” says Goslett.

He concludes by saying that while it is feasible for property to be the backbone of an investment portfolio, investors need to keep in mind the costs involved of owning and maintaining the property. That said, the cost of pre-emptive upkeep is less expensive than waiting until something goes wrong. Maintaining the home will also help to ensure that the value of the investment continues to grow and show potential.  

When you join the RE/MAX family, it means a lot more than just opening up a franchise. As a globally renowned real estate agency, we’re a business that promotes growth and development in our agents and franchisees. 

 

And, when you decide to open a RE/MAX franchise, you’re essentially expanding your real estate horizons and opening yourself up to a wealth of opportunities. 

 

Join the Family

 

Opening your own RE/MAX franchise means affiliating with one of the best in the business. We spend millions of Rands on brand marketing promotions in order to get everyone who shares our name the exposure required to generate quality leads. 

 

When you partner up with RE/MAX, several benefits are made available to you: 

 

 

Make it Happen

 

RE/MAX is a global brand and household name in real estate. Through employing only top area specialists and providing them and our franchisees with a wealth of opportunities, we have established ourselves as a front runner in property. 

 

Contact your nearest branch today to find out more about opening your own RE/MAX franchise. 

 

There’s no denying that when you choose to become a RE/MAX agent, you’re opening yourself up to a world of opportunities and affiliating yourself with a global industry leader. 

 

You’re offered extensive education opportunities to better your skills and transform you into a leading area specialist. 

 

Learn and Grow with Us

 

At RE/MAX, we believe in enabling you with the tools you need to educate yourself in the field of property sales. We make this possible in association with the Global Learning Centre (GLA) an online education portal that gives you in-depth training and insights into real estate. 

 

When you start a course with the GLA, you can take advantage of several benefits, such as: 

 

 

Join Our Ranks

 

We care about your future career in real estate. That's why, we want to give you, as an aspiring RE/MAX agents the opportunity to develop and grow professionally in the industry, all while having a worldwide industry leader by your side.

 

Be part of these exciting learning opportunities. 

 

Contact your nearest branch today to find out more about how to become a RE/MAX agent. 

It is said that on average, for every hour that a real estate agent spends with the homeowner of the property they are selling, they will spend around nine hours out of eyesight working on the seller’s behalf. The reason for this is fairly simple – if they don’t sell the property, they don’t get paid. 

“The majority of real estate agents work on a commission basis, meaning that they will only receive payment for their services if the property is sold. While this is a risk, it is also highly motivating and pushes them to go the extra mile to ensure that the deal is closed,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. “Unlike other professionals who bill their clients for the amount of time they spend working for them, agents run the risk of coming away empty-handed – this is simply the nature of the real estate industry.”

He notes that there is often debate regarding agent’s commission and why certain agents charge more, while others charge less. “A lot has to do with the agent’s experience and what they can offer the seller. If an agent can achieve the agreed upon selling price within the stipulated time frame, should they not be paid a fair commission?” asks Goslett. 

So what do real estate agents do behind the scenes to get the property sold?

Market the property

Added to the fact that an agent will only be paid once the home is sold, agents will actually put money into ensuring their listings receive as much exposure as possible. As part of their service to the seller an agent will market the property by taking out magazine and newspaper adverts, printing flyers and brochures, having professional photos taken of the home and ensuring that the home enjoys premium placement on property search portals. Other marketing methods include using the services of a public relations officer to engage with targeted media, posting listings on social media and holding show days. 

A fair amount of money and time is spent to ensure that the home is exposed to the right target market and sells for the highest possible price, within the shortest amount of time.  

Dealing with buyers and writing offers

Much of an agent’s time is spent talking to their network of buyers and ensuring that the buyers are matched with the right homes. The agent needs to have an in-depth knowledge of the homes that they are currently marketing, along with what each of the buyers in their network is looking for.  

Once they have matched a buyer with the right home, much of their job would then entail dealing with the offer from the buyer, as well as any counteroffers that the seller may bring to the negotiation table. This is a very important part of the property sales transaction, as the agent can either save or net the seller thousands on the sale during this stage of negotiations. 

The agent will spend a lot of time writing up offers, explaining them to the seller if necessary and showing them how to counteroffer if they wish to do so. 

Research 

Much of an agent’s time is spent researching property sales prices and data to ensure that they know their area well and have a good handle on the market. In order to accurately price a home for sale, an agent will need to complete a comparative market analysis (CMA).  Factors taken into consideration during a CMA would include the average price per square metre in the area, recent sale prices of similar homes and comparative prices of other properties that are still on the market. This information will help establish a reasonable price bracket for the property.  

Once an estate agent has the correct price bracket for the home, they will then determine what features or unique qualities could set the property apart from others in the area to give a more accurate gauge of the home’s value.

Be there during inspections

A seller might not be present during a home inspection, but a good agent should be. This will give the agent valuable information regarding the home and assist with accurately setting an asking price. 

Ensure a smooth ride

Unfortunately not every property sale will go smoothly, however as much as possible an agent will try to shield clients from any unnecessary drama, unless there is a need to inform them. An agent will work tirelessly to ensure that the property sales process is as hassle-free as possible for both the buyer and the seller. 

A property transaction can be stressful and people get emotional. A good agent will need to be a problem-solver, keep a positive approach and come up with a constructive solution to any issue. 

Networking with other agents

Many agents work for large brands or have a network of agents that they can use to find buyers. Agents spend time with others agents to help them match the right buyer with the right home by discussing listings. Often agents will refer buyers to other agents if they know that agent has the house that checks every box on their wish list. 

Goslett concludes by saying that a good agent will add value to property transaction and earn their keep. 

Often homeowners may find themselves in a situation where they have decided to place their home on the market – but the home is in need of repairs. In this instance the homeowner will have to make the tough decision of whether it is best to delay putting the property up for sale and making the necessary repairs, or taking the knock on the asking price and selling the home as it stands.

Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that it goes without saying that a home in good repair will achieve a much higher selling price than one that needs attention. However, fixing a home will cost money and will delay the sale process by the amount of time it takes to complete the repairs. 

“There are many buyers in the market that are looking for homes that have potential and are more affordable because they require some work, but at the end of the day it will be easier for a seller to find a buyer if the home is at its best. While it largely depends on the reasons that the homeowner is selling and the time frame in which they need to sell, taking the time to get the home into its best shape could pay off. This is because a visually pleasing home will attract far more attention from potential buyers than one that is not well kept,” says Goslett. 

He adds that most sellers will spend some time and money preparing for the sale of their home in the form of a fresh coat of paint and spring cleaning. Very often the home may also require just a few easily repairable issues to be sorted out before it is ready to be sold. However, what if more is required? To what extent should the seller be prepared to go before they place the property on the market?

“A fresh coat of paint and a few repairs is fairly standard, but what if there is structural damage or an entire roof that needs to be replaced? These larger elements could pose a far greater challenge for potential sellers. Most buyers will want the home to be professionally inspected before they sign the sales agreement. It is best for the seller to have the home inspected before they put it on the market to ensure they are fully aware of any potential issues that need to be addressed. The seller is morally obliged to inform their real estate agent and the potential buyer of any known defects,” advises Goslett.

Once the home has been thoroughly inspected and the homeowner has obtained a quote for all the necessary repairs required, they will have a far clearer idea of whether it is worth their while to fix before the sale or sell as is and lower their asking price.  “If the asking price of the property would decrease by as much as R100 000 or R200 000, but the repairs would only cost around R50 000, then it would make more sense to delay the sale and have the repairs done before going to market,” says Goslett. “However, if the cost of the repairs is R50 000 and the asking price of the property will only change by R50 000, then it would seem more feasible to rather put the home on the market sooner and advise potential buyers of the repairs needed.”

Very often cost is only one aspect that requires consideration, while time is another. Goslett says that major repairs will take time – a luxury that not all sellers have. If the seller has committed to another property, moving because of a job or immigrating, they may need to sell as soon as they can. This will have an impact on their final decision. 

Depending on the situation, another consideration could also be the buyer. The seller may find a buyer who would prefer to do the repairs themselves because it will give them the opportunity to change certain elements in line with their own personal taste. In a case where the repairs are cosmetic by nature, the buyer may want to make the decisions as to how the repairs are done and what materials are used.

“Irrespective of what the seller decides, it is imperative that both the seller and buyer are fully aware of all the home’s defects and are prepared to agree to the terms and conditions of the contract,” Goslett concludes.

When it comes to selling a property, it is vital for the homeowner to find a real estate professional that they can communicate with and more importantly that they trust. For most, the home they live in will be the largest financial asset they will ever own, so it is imperative that the person they choose to handle the sale of their property is from a reputable and professional real estate agency with the right attributes. 

Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that a homeowner should select an agent who has experience and specific area knowledge. “An agent who specialises in an area will know the particular factors that influence the local market, as well as the target market of buyers who are in that area. In-depth area knowledge and a targeted market plan will give the seller the best chance of selling their home at the highest possible price, within the shortest possible time frame,” says Goslett. 

He notes that sellers should meet with several agents rather than simply listing their property with the first agent that they see. “The more agents that a homeowner can interview, the better informed they will be and the better chance they will have of finding the right agent for the job. The seller should schedule listing presentations with the agents so that the can gather as much information as possible and make an informed decision,” advises Goslett.

He provides a few characteristics that sellers should consider when interviewing prospective agents:

Experience

Experience does not only relate to the number of years that the agent has been in the industry, but more specifically their record selling the type of property that the homeowner is listing. Area knowledge can also not be over emphasized. The agent should know the area and have a successful sales record within that area. 

Difference between asking price and selling price

Don’t choose an agent purely because they have given the home the highest evaluation. Some agents may overinflate the asking price to get the listing, however ask the agent the average difference between the selling price of the homes they have sold and the original listing price. While the market conditions will have an influence on the selling price, it will also reflect whether the agent can skilfully set an asking price and negotiate offers. 

Does the agent listen? 

Is the agent rushing through a generic presentation or are they interested in what the homeowner has to say? It is vital that the agent allows for questions and is focused on the seller’s needs. 

A marketing plan

The agent should present a comprehensive marketing plan outlining how they intend going about selling the property. The marketing plan should address where and how the agent intends to promote the home, whether they will hold show days and explain the reasons behind their decisions. This is where meeting with more than one agent will be beneficial - while one agent might be against holding a show day, another may be for it. The seller’s choice will be based on who they agree with more. 

Personality

It is vital that the seller and the agent can communicate effectively and both understand each other’s perspectives. The seller must feel as though they can trust the agent and that the agent cares about and understands their situation. If the channels of communication are open, an agent and seller will be able to work together to achieve the agreed upon objectives. This doesn’t mean that the agent and the seller have to be best friends, but if their personalities clash it will make it far more difficult for them to communicate with each other.

Ask for references

Ask for the contact information of the agent’s most recent three clients - and get in touch with them.

“Essentially the agent and the seller both want the same thing, which is to sell the property for a realistic price in the fastest possible time,” says Goslett. “Buyers are also looking for the right property at the right price. A professional, qualified estate agent will be able to match all of these elements to ensure a successful sale,” he concludes.

Recently re-appointed Finance Minister, Pravin Gordhan, started his address to South Africans in this year’s budget speech with a simple message: “We are strong enough, resilient enough and creative enough to manage and overcome our economic challenges,” he adds, “All of us want jobs, thriving businesses, engaged professionals, narrowing inequality, fewer in poverty.”

Throughout the speech emphasis was placed on igniting inclusive growth and taking corrective steps to ensure that South Africans do not find themselves financially worse off. Gordhan said in his speech that the government would increase the higher education expenditure by R16 Billion through the course of the year. “This increased expenditure is a key element to creating a skilled workforce and ensuring that the future generations can get onto their feet financially,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. “And with the promised support for small business there is the potential for more entrepreneurs to enter the market within the various business sectors. This in turn will create employment opportunities and assist in building a productive workforce.”

Goslett points out that it is a good thing for the economy that Gordhan will not support ongoing bailouts of state entities. This will ensure that the said state entities are held financially responsible for any mismanagement of funds. Failing state entities are to be terminated and the surplus will be transferred to the balance sheets of strong entities that have the potential to grow.

According to Goslett the R62 billion housing subsidy will be an extremely good thing for those who fall within the affordable housing market. Currently the demand for affordable housing is growing exponentially with a great number of South Africans buying properties within this sector of the market. “Another element that will positively impact the affordable housing market is the Personal Income Tax relief for low income earners. This will essentially put more money in the back pockets of these individuals and put more people in homes,” says Goslett.  

The budget will also have an impact on the other end of the market with an increase in Capital Gains Tax (CGT), the criteria of which were not disclosed but will obviously target high-net-worth individuals. The transfer duty on properties price from R10 million upwards was also increased from 11% to 13%. “This is effectively a wealth tax which will impact only a small percentage of homeowners,” says Goslett. 

The government will introduce the sharing of international tax information, which will affect citizens who have sought tax relief internationally on income generating assets and investments. Investors will have to disclose all their international investments to the government. 

Gordhan pointed out that consumers need to be responsible with their borrowing and only take what they can afford. There are still too many households which are currently struggling with high debt levels. Households were encouraged to reduce their debt levels and start saving to make provisions for the future. 

“Interest rates are expected to continue to rise over the next year,” says Goslett. “The expected rate hikes along with the fuel levy increase of 39c, will increase the financial pressure on households that have high debt levels. Those who can are encouraged to rein in their unnecessary expenditure and focus on eradicating interest-bearing debt.”

He concludes by saying that he believes that the budget is fair under the economic circumstances the country finds itself in. The message instils confidence that through a well-drafted plan, things can be turned around - it now requires action and impeccable execution.

Become a real estate agent with RE/MAX and be part of an award winning team with astronomical personal and professional growth potential. 

 

In terms of transaction sides and ends, we are known as one of the leading real estate agency in the business and have been for the past 10 years. 

 

What’s in it For You? 

 

Choosing to become a real estate agent with us means that you are not just joining a business, but a family. Your name becomes synonymous with success and award winning service. And, since we have branches in over 90 countries around the world, you affiliate yourself with a household name that has been around since 1973. 

 

Being a RE/MAX real estate agent also brings several benefits with it: 

 

Learn and earn - We grant you access to several means of real estate education, which can ultimately improve your earning potential . Through our webinars, videos, and e-Learning courses, you can become an advanced area specialist in no time. 

 

Charity opportunities - We try and be involved in as many initiatives as we can. All in all, we have donated over R7 million to charities around the world. It’s difficult not to want to be a part of a company that cares as much as RE/MAX.

 

RE/MAX University - Expand your know-how through a  wealth of educational videos, that help you improve the different aspects of your knowledge from negotiation skills to growing your client base. 

 

So Much More than Property

 

At RE/MAX, we believe we’re in the business of selling dreams to our clientele. And in order to maintain this, we want to empower our real estate agents to become the best area specialist with us. 

 

If you want to become a real estate agent with RE/MAX and want to know more about the benefits associated with it, contact us or browse our website for more information.

 

According to an MMR Strategy Group study, RE/MAX has been named the number one real estate company. For this reason, it’s advantageous to you to have a reputable name behind you when you start your RE/MAX franchise.

As we have branches in over 90 countries, becoming part of our family means extending your real estate reach on a global scale.

A Household Name

We have been in the property industry for over 40 years, meaning that we’ve established ourselves as a frontrunner in real estate sales and franchise opportunities.

In addition to being a part of our global charity initiatives, you can reap several benefits when you open your RE/MAX franchise:

Aside from being the most visited real estate website visited in South Africa, we believe in supporting and enabling our franchisees to learn and grow with us. This is done through our online education portal, RE/MAX University in an effort to ensure that you chase your dreams and get educated while doing so.

If you are interested in opening your own RE/MAX franchise, contact us today to find out how.

While there are many exciting aspects about moving to a new home, the move itself can be a very stressful process, particularly for the children. A change in routine and possible lifestyle can bring about fear and anxiety in children, especially if they are not fully prepared for what is about to happen. According to international psychological studies a child may become sullen or act out in anger, both of which could be signs of depression. 

Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that although moving can be an anxious event for children, much of the negative emotional impact can be minimized by the parents being aware of the risks to their children and dealing with the process in a positive manner.  “It is important to remember that while moving can be stressful, not all moves are bad moves. Moving can be an extremely positive experience, provided parents can keep their children’s anxiety levels as low as possible,” says Goslett. 

He notes that the reason for the move has a lot to do with how much stress is involved in the process. If the move is due to the family upgrading to a larger home or a better neighbourhood, there will be far less emotional upheaval than if the reason for the move is because of a loss of income or the loss of a family unit. “Another factor that will have an impact on the level of stress caused is the timing of the move. According to psychology studies, while very young children and older children handle moving in their own stride, children between the ages of 11 and 14 years old seem to be more affected by a move. This is largely due to the hormonal changes that this age group is dealing with,” says Goslett.

Irrespective of the reason for the move, Goslett says that there are ways that parents can make the transition easier for their children.

Leading up to the move

Communication is key – It is important that parents make children aware of the move as early into the process as possible, as this will give them time to get used to the idea. Children will have a higher level of anxiety if they feel as if something is going on and they are not fully aware of the details.

Highlight the positive aspects – Parents should focus of the positive factors around the new location.  In some instances the children might think that moving will mean leaving their favourite things behind, so parents should ensure that the children know that their beloved toys and pets are coming along.  

Focus on elements that won’t change – Children often feel most secure when they have a consistent routine and elements that remain the same regardless of the circumstances. Parents can emphasize aspects that will not change during or after the move such as play schedules, bedtimes or the fact that they have a loving family that supports them.

During the moving process

Allow the children to say goodbye – This aspect does not just relate to neighbours and their friends, but also some of their favourite local places such as the park. It might be worthwhile to tell the children that saying goodbye today does not mean goodbye forever and that they might be able to visit those friends or places at another time in the future.. 

Avoid letting the children see the moving truck – During the move it might be better for the children to be at a friend or family member. Seeing all their possessions loaded into a truck and hauled away can be an upsetting experience for some children. 

In the new home

The children’s bedroom should be top priority – Setting up the children’s bedroom first will establish an area in the home that is familiar and safe. 

Give the child time to adjust – It will take time to adjust and acclimatize to the new surroundings for both adults and the children. Take the children around the new area and explore. This is a great way to find nearby parks and activities for them to do. 

Get involved – The only way to become a part of a community is to get involved. This could be in the form of joining the local church or playgroup. Getting plugged into the community will help make it feel like home far quicker. 

Listen – This element applies to all stages of the moving process. It is very important that regardless of the child’s reaction to the move, they know that their parents are listening and pay attention to their emotions and needs. They may need to be reminded that there is no wrong or right emotion and that their feelings are valid. 

 “An important element to reducing the stress on the children is the parents supporting and helping each other to deal with the change in circumstances. As with most situations that can have a negative impact on relationships, mutual support is vital to ensure that both adults and children adjust to the move as seamlessly as possible,” Goslett concludes.

With summer in full swing, these persistent hot days are a constant reminder of the concerning water levels throughout the country. Water shortages have become a burning issue with many regions throughout South Africa currently experiencing water restrictions, to ensure that the precious resource is sustained. 

“Water is a vital commodity that we require in order to survive. Without water the environment we live in could not survive, so it is imperative that the necessary precautions are taken to ensure that this essential resource is not used carelessly,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. 

He notes that there are several ways that homeowners or tenants can save water in and around the home, which will bring down monthly water bills and more importantly, reduce water usage. Goslett provides a few tips that will assist people in lessening their impact on the national water crisis:

Inside the home:

Taps

It is important to make sure that once a tap has been used it is closed properly. While this seems like a relatively small thing to do, a tap dripping at one drip per second will waste as much as thirty litres of water in one day.  This equates to around 10 000 litres of water wasted over a period on a year, simply from one single dripping tap.

Ensure that tap washers are replaced regularly and fit aerators to restrict and spread the flow. An aerator will reduce water usage creating a no-splashing stream and often delivering a mixture of water and air. Remember to turn off the tap when brushing teeth. This will save around twenty litres of water per month. A mug of water can be used to rinse the toothbrush after use. 

Bathroom

Showering will use far less water than bathing, provided that the shower is less than 5 minutes long. If there is only the option of taking a bath, the bath should be as shallow as possible and water reused to water the garden. 

Installing a water-saving shower head will also aid in reducing water usage. Ideally when showering the water should not be at full force and it should be turned off when soaping or shaving. When opting to shave at the basin, it is best to plug the basin rather than rinsing the razor with running water. This will save approximately 45 litres of water a month. 

Much like a leaking tap, a leaking toilet can waste vast amounts of water. Installing a water-saving toilet is an option, but for those who don’t wish to spend money on the outlay, adding a brick or sealed container of sand to the cistern will reduce the amount of water used during each flush. A few drops of food colouring in the cistern will help to determine if any water is leaking from the toilet. If the colour seeps into the bowl, the system is leaking and should be fixed without delay.  

Kitchen

If possible only use washing machines and dishwashers when they are fully loaded to avoid unnecessary water usage. Rather than rinsing dishes under running water, opt to rinse items in a basin of water and then reuse the water in the garden. When waiting for dishwater to heat up, run the tap into bottles to use as drinking water. By keeping bottles of drinking water in the fridge there is no need to let lukewarm water be wasted when waiting for the tap water to cool. 

Outside the home:

Homeowners in South Africa consume an estimated 30% to 50% of water on watering and maintaining their gardens, so it seems that this is the most significant area for water to be saved. While an attractive, established garden can add considerable value to a property, a water-wise garden that takes less water to maintain but is still beautiful makes sense from both an environmental and financial view point. 

Choose the right plants

As a general rule, only indigenous plants should be used as they consume very little water and require minimal maintenance.  Certain bedding plants can drink a lot of water, however by adding mulching to the bed and water retention granules to the soil, the need for water can be substantially reduced. It is best to water the garden either before 9am in the morning or after 4pm in the afternoon – even later on really hot days. In addition, no watering should take place within 24 hours of rainfall as it should provide adequate saturation.

Reduce lawn areas

Lawns guzzle water, so assess how much is really necessary. Consider adding hardscaping features such as a paved or cobblestone footpath, which will reduce watering areas as well as add to the aesthetic appeal and overall feel of the garden.  

“With soaring temperatures and the lack of water currently being experienced, becoming water-wise is essential. It is not just about saving an important resource, but also about sustainability and of course saving money with today’s higher cost of living,” Goslett concludes.  

Regardless of whether someone is on the selling or buying end of a property transaction, it is imperative that they are familiar with all the conditions that the offer to purchase stipulates, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.

According to South African legislation, those who would like to either sell or buy a property are required by law to reduce all contractual agreements to writing. Goslett says that the aim of this is to reduce the risk of any ambiguity during the transaction and to have a clear guideline as to what each party is entitled to and what they are responsible for.  “Since the Consumer Protection Act was signed into law in 2011, contractual language has become easier to comprehend. However, that said, it is still vital that both the buyer and seller go through the offer to purchase and agree with all conditions and provisions mentioned in the contract before they sign it, especially when it deals with aspects such as occupational rent,” advises Goslett.  

He adds that the clause relating to occupational rent is vital as it protects both parties in the contract. Essentially what the clause does is ensure that the seller will be financially compensated if the purchaser moves into the home before the transfers occurs. Equally, it will also provide financial compensation if the transfer takes place and the seller is still occupying the property. 

Goslett says that the occupational clause in a sales agreement is often overlooked because the majority of buyers only plan to move into the home once transfer has happened. In most instances buyers want to avoid having to pay occupational rent and therefore wait for the property to be registered in their name before taking occupation. “However,” says Goslett, “sometimes life doesn’t always go according to plan and the buyer might find themselves in circumstances that force them to move into the property sooner than anticipated. Buyers will often have to give notice at their current residence before moving to their new home. If notice is given and the transfer of the property is delayed, they could find themselves occupying their new home while it is still owned by the previous owners.  In an instance such as this knowing what the contract says about occupational rent will become of paramount importance.”

According to Goslett, it is not only the buyer that could find themselves paying occupational rent. If the seller has sold their current property to purchase another and are waiting for the transfer to go through, they could end up staying in their current residence longer than expected. This would mean that they could end up paying occupational rent to the new owners of the property.  Although these situations are not ideal, it is in these instances that knowing and understanding the terms of the occupational rent clause that will allow the parties involved to know what is expected and not be caught unaware.  

Goslett says that in the event of either possibility happening, it is imperative that the occupational clause in the sales agreement states the amount of occupational rent that should be paid. Even if the date of occupation is listed as the date of transfer, the occupational rent amount should still be put into the agreement in writing.  This will ensure that conflict or any misunderstandings are avoided. “While the rental amount is ultimately the seller’s decision, both parties will need to decide and agree upon the occupational rent amount prior to them signing any agreement. The rental amount should be market related and should ideally be enough to cover the bond repayment,” says Goslett.

He concludes by saying that by understanding the sales agreement and its conditions, buyers and sellers can avoid any unnecessary conflict, which will make the entire process of buying or selling a home a far less daunting one.

As most economists had predicted, the Reverse Bank has announced another rate hike at today’s Monetary Policy Committee meeting, bringing the benchmark repo rate up to 6.75% and the prime lending to 10.25%. The decision was largely brought about to counter the effects of the depreciation of the rand, along with increased inflationary pressure.

The Reserve Bank had made it clear over the course of last year that we are currently in a rate hiking phase and that consumers would need to prepare themselves for this. The rate increase, along with issues such as poor economic growth, rising food prices due to drought conditions and the possibility of an increase in electricity tariffs will continue to place additional financial pressure on consumers, who will need to make the necessary financial adjustments to endure the tough times ahead. Future rate increases could be a tipping point for many South African consumers who will no longer be able to service their financial commitments.  

Many will be facing the New Year, after the holiday spending-spree, with less money in their back-pockets to pay their monthly bills. This year consumers will need to focus on preparing themselves financially and watch out for increased living expenses and factor these into their household budget. Those who are over-indebted should seek financial advice and first consolidate and pay off short-term debt. They will need to create a budget that allows them to live within their means.  If necessary, sell the second car and get rid of credit cards. Selling a home should be the last option, as property is the one long-term asset that should yield a return over time unlike cars, boats and the like.  After a consumer has gotten rid of or ring-fenced their short term debt, they should speak to their bank about the options of restructuring their bond. 

A part from other economic factors such as the interest rate and the level of inflation, South Africa’s exchange rate is one of the most vital aspects to the health of the country’s economy. Over the last few years the rand has depreciated significantly causing concern among consumers. However, is it possible that the weakening rand could be a good thing for the country? While most would look at the current exchange rate as an indication of the sad state of the country’s economy, a weakened currency can have its benefits.

Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that while a weaker rand makes imported items and overseas travel more expensive for South African consumers, the current exchange rate will be very attractive to foreign investors, provided of course that foreign sentiment towards the country remains positive. “Property within South Africa is becoming more and more affordable for buyers with currencies like dollars or pounds. This could mean that we may see higher numbers of foreign investors purchasing homes in 2016, bringing both capital and skills into the country,” says Goslett. “That said, the allure of the weaker rand could be underpinned by other economic concerns that foreigners may have about South Africa. There will only be an increase in foreign property investment if buyers perceive the country to be a feasible investment option.”

He adds that foreigners who buy property in South Africa will do so based on the fact that they have fallen in love with the country and intend to use their asset on a regular basis, rather they purely basing their decision the fact that the property is relatively affordable. 

Goslett notes that another benefit of a weaker rand is that it may address the current trade deficit and see companies looking to local suppliers rather than importing items. At the moment South Africa imports more goods than it exports, which means many local businesses have suffered. A weakened rand makes international imports more expensive, while simultaneously making South African exports more competitive in the global market. Essentially what this means is that the sales of South African products will increase on a worldwide scale. “The weakening rand will more than likely quell the demand for international goods, with many refocusing on local industry to substitute foreign investments. The higher demand for locally developed items will increase the need for workers and help to address the current high unemployment rate,” says Goslett.

He adds that there has also been a massive uptick in tourism due to the weaker currency. “More visitors and investors coming to South Africa means more revenue entering the country and more opportunity for employment,” says Goslett. “Although it will take some time, the effect of the currency devaluation will ripple through the economy and have a knock-on effect throughout the country. There will be more opportunity for small local businesses and as more people gain employment, there will be larger numbers of consumers who will be able to realise their dreams of purchasing a property for example.”

According to Goslett there are also ways that South African investors can use the weakening currency to their benefit. “If local investors look at offshore investment options with the plan to retire in South Africa, then a weaker rand will be favourable because it means that they will be getting more from their investment returns once converted from a foreign currency to rands. This could mean being able to purchase a larger or better retirement property,” says Goslett. 

He concludes by saying that while there are benefits to currency devaluation, any positive aspects will take time to play out in the economy and the benefits will be far less if it begins to occur on a regular basis, with the risk of an increased inflation rate becoming a factor if nothing is done about it. If the rand continues to fall, we will likely see the South African Reserve Bank take a stronger stance at their monetary policy committee meeting later this month, possibly pushing the interest rate up by around 50 basis points. 

While it is possible for homeowners to research certain information online, there is no programme or site available online to those outside of the real estate profession that can accurately value your property. To set the right asking price it takes specific area knowledge, market savvy and even a touch of psychology, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. 

“With the vast number of possible variants that have an impact on pricing, it is very difficult to set an asking price by merely doing some research online. While there could be other homes situated in the same area that offer similar features, there are other aspects that come into play that could place your home at a different value in the market,” Goslett explains. “This is where the services of an experienced real estate professional can be extremely important to the seller.” 

Goslett provides a few elements that real estate agents could look at when determining the right, most competitive asking price for a home:

Past sales

Often looking at the past is a gateway into looking at the future. Looking at the sales prices of homes in the area over the last six months will give the agent some insight into what buyers are prepared to pay for homes in that area.  Careful consideration will be made to how long each property sat on the market, as well as how the initial asking price differed from the eventual selling price. 

A comparative market analysis (CMA) is the accepted method to accurately determine a property’s value. Information and statistics are gathered from various sources and compiled together to determine the average price per square metre of property in the area.  By determining the square metre pricing, the agent is able to compare apples with apples. Once this base has been reached, it is far easier to give an accurate appraisal of the property, taking into consideration any other factors that might have an affect the properties exact value. These factors would include the condition of the property and its size, security features, finishes and fixtures, and any other features that could set the house apart from others in the areas. 

The market trends

While there are wider elements that will impact the property market around the country, such as interest rate hikes and access to finance, most micro markets will have unique aspects that influence the sale of homes in that particular area. These aspects could include new companies moving into the area or plans for improving local amenities such as parks or shopping malls.  The agent will look at what is affecting the market in the neighbourhood and consider the influence this will have on the perceived value of the home. Both countrywide influences and local factors will have an impact on home’s potential perceived value among buyers.

The neighbours 

The perceived value of a property has a lot to do with the area in which it is situated and the surrounding homes around the property. While a home in the same neighbourhood - approximately the same size and age - could have recently sold for a high price, if the seller’s home is surrounded by rundown homes or noisy neighbours they may not have the same fortune. Unfortunately it is largely out of the seller’s hands, but the neighbouring properties can have an influence on how the home is valued by buyers. On the flipside, while bad neighbours can bring down the home’s value, if the grass is in fact greener on the opposite side of the fence, it can have a positive impact on the value of the home. 

The Goldilocks price

Finding the asking price that is ‘just right’ from the start is crucial to selling it within the fastest time frame and for the best price. Over-pricing can chase away buyers from the start, while pricing the property too low will leave money out on the table.   A property that is inflated by around 10% above its market related value is much less likely to sell within 30 days of it being on the market, compared to one that is priced within 5% of its market value. An inflated asking-price can actually have the opposite effect to what the seller intended, especially if the over-pricing leads to the property sitting on the market for longer than it should and becoming stale. A home for sale becomes stale when potential buyers start to question why is hasn’t sold yet. “There is often a negative association with a property that has been on the market for longer than the average time, which can lead to it eventually selling for below its actual value,” says Goslett.

He concludes by saying that working with a reputable, experienced real estate agent and making sure the asking price is correct from the outset, will ultimately make all the difference in achieving the seller’s goal.

With the competitive environment surrounding today’s real estate market, some homeowners who have decided to move to another property may find themselves asking whether it is best to first sell their existing property, or find another home before they sell their current one. 

Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that with high demand and low inventory buyers need to move quickly when they find a property that they really want. For some this may mean putting in an offer while they still currently own another property. “The answer to whether homeowners should look to buy first and sell their current property later, or sell before looking at other homes will largely depend on their personal circumstances and unique situation,” says Goslett. “There are a few aspects that first need to be considered and will influence the homeowner’s decision. These factors include the financial options available to them, local market conditions and of course the homeowner’s feelings about moving more than once should they have to vacate their current home before the new home is available.” 

Goslett provides three considerations that homeowners need to bear in mind before making their decision: 

Consider - finance

Only a small percentage of buyers are able to purchase a property with cash, while most are reliant on banks to obtain the necessary finance. What this means is that homebuyers who are upgrading to a larger or more expensive home may need the equity from the sale of their current home as a deposit.  

“In the instance where the sale of the owner’s current home needs to happen first, they could sell the property and then negotiate with the new owners that they rent the property back from them until they find a new place. This will depend on how eager the new owner is to move into their new home and the previous owner will be required to pay occupational rent,” says Goslett. “Another option would be for the seller to find temporary accommodation with family members or friends or at a short-term rental. In this instance storage facilities may also become a necessity.” 

According to Goslett, sellers who would like an advance on their home equity can opt to have the money bridged before the sale of the home is concluded.  The bridging finance will be based on the equity available on the property, the seller’s credit record and the expected cash inflow.

He notes that while having the equity readily available is a pro, the con is that a temporary living arrangement could force the buyer into making a faster decision than they perhaps should. It is important that the buyer takes the time to find the right home that fits their criteria. With stock shortages a reality in today’s market, it could take more time than initially anticipated. “Perhaps the optimum decision would be for the homeowner to stay in their current home while looking for another property.  They could then make an offer to purchase their next home subject to the sale of their current home going through. This way they have time to do their research and find the perfect home that fits all their criteria before making a move,” advises Goslett. 

If the homeowner is in the rare position of not needing the equity from their current home, to obtain finance for an additional property, they still run the risk of being stuck with two properties. While this could be fine as a short-term solution, it may not work for the homeowner on a long-term basis. In this instance the homeowner will need to have a contingency plan in place.

Consider - local market conditions

While there are external factors that impact the property market in general, most areas will be uniquely affected by their individual circumstances. Aspects such as the type of home, price range and availability of other similar homes in the area will all have an impact of the sale of the property. “A real estate professional will be a valuable source of information when it comes to researching the specific factors that influence the property market in a particular area. The agent will be able to provide the homeowner with insight into how long homes are sitting on the market for on average, and how much they are selling for. This information will be vital when gauging time frames and possible equity expected from the sale,” says Goslett.

On the opposite end, from a buying perspective, the purchaser should be researching properties that are available in the areas they want to buy in, looking at all aspects of the neighbourhood and elements that may have an influence on their decision.  

Consider - risk and emotion

Regardless of whether the homeowner decides to sell first, or buy and then sell, each option brings with it an element of risk. For this reason, homeowners must ask themselves whether it would be better to sell first and possibly not have accommodation to go to or buy first and have two bonds to pay until the one home is sold. “Although there will be an emotional element that drives the answers to each of these questions, ultimately the answers should be based on the financial options available, along with the local market conditions. Either way, the homeowner will need to be prepared and have a plan in place to deal with the consequences of each scenario,” Goslett concludes.