Considering letting out your property?Thu 15 Jun 2017

Considering letting out your property?
While the thought of owning and letting out property is an appealing financial venture to many, there is more to being a landlord than collecting the rent each month, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. 
“Depending on the circumstances, owning a rental property can be fairly time consuming and involved, especially if you decide to manage the property yourself,” says Goslett. “It is possible for the endeavour to be financially rewarding, but it is vital to be fully aware of what it entails before taking the leap. Understanding what is involved and doing some research on the matter will put you in the best position to handle whatever may come your way and increase the chance of making it a success.”
Here are five aspects that all potential landlords should think about when considering getting into the property rental business:
1. You are in it for the long haul
Property should be considered a long-term investment - it takes time for property to appreciate in value and build equity. A rental property will likely get to the stage that it is paying for itself, or ideally making a profit – but this will take time.  “While possible, it is rare that the rental will cover all the costs from the outset. Whether part of the bond repayment or merely maintenance of the property, it is likely that you will need to carry some of the monthly costs in the beginning. However, the rental amount will increase over time, reducing the amount of money you as the landlord will need to cover. Eventually, it will get to the point where the rental covers all costs, and there is a profit generated. Getting to this tipping point won’t happen overnight, it can be a drawn-out process that requires patience and resolve to see it through,” says Goslett.
2. The bond won’t be the only expense
Consider all the costs involved with owning property, not just the bond. Landlords need to know the numbers.  Aspects to take into account include general maintenance, insurance, rates and taxes and possibly the services of an attorney or a professional rental agent. An attorney is a valuable asset when it comes to drawing up lease agreements, as well as providing sound legal advice regarding your rights and responsibilities. There is also the matter of dealing with defaulting tenants should it be necessary. A rental agent will take care of screening and vetting tenants, collecting the monthly rental and general management of the property.
“Provision should be made for the upkeep of the property, along with any other unforeseen circumstances or repairs that require attention. Setting money aside in a contingency fund must form part of a landlord’s monthly budget.  Knowing the numbers and budgeting for expenditure will ensure that money is allocated to where it needs to go,” says Goslett. 
3. Have a checklist
Having a checklist that includes all items you need to go over when a tenant moves in and again when they move out, will ensure that nothing is overlooked. It will help you to assess the property and ensure that it is in a good condition when handing over the keys. The same checklist can be used when the tenant moves out, to compare the condition of the home to its state before the tenant took occupancy. 
Items that should appear on the checklist 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.
4. Make sure contracts include all details
All stipulations should be clearly stated upfront in a detailed contract to avoid any future complications or misunderstandings. The more detailed the contract the better, as there is less chance of any ambiguity. If aspects of the tenancy are dealt with in the contract,  there will be no areas left open for interpretation. Factors such as acceptable tenant behaviour, breakage costs, preferred method of payment and date that the rental is payable by should be all included in the document. 
5. Vetting and selecting the right tenants
The financial success of a rental property is largely determined by tenant selection. Prospective tenants must be carefully vetted before a rental agreement is concluded. If possible, obtain details of the tenant’s previous rental history, reasons they are moving, their place of employment and income. References should be contacted to verify as much of the information as possible. “The tenant vetting process is where the services of a rental agent will be a valuable asset. While discrimination against tenants is illegal, it is not wise to simply accept the first tenant who applys for the property,” advises Goslett.  
While not for everyone, owning a rental property can be a vehicle for wealth creation over the long term - the key element to success is to always view property investment with the future in mind.
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Avoid these moving mistakesWed 14 Jun 2017

Avoid these moving mistakes

At least once in their lifetime, the majority of the population will move from one home to another. While some may have a reasonably pleasant experience with few hassles, others may never want to move again after going through it once. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, moving can be a very stressful endeavour, in fact, according to psychological research, it is among the top major life stressors. However, if people avoid a few key mistakes, the process can be less daunting and a far smoother process.
Employing an unreliable moving company
It may require some research and a bit of time, but using a reliable, professional moving company will relief much of the stress. Often the best way to find the right mover is through a referral from a friend or family member who has used them before. “No two moving experiences are alike, but using a mover that has been referred by a trusted source will to some degree ensure that you know they do a good job,” says Goslett.  “If no-one can provide a referral, there is a lot of information available on the Internet and other forms of public information. Most companies will have websites that list their services, service history, areas they operate in and a rough estimate as to how much it will cost.”
Online searches are great for compiling information and making a list of possible choices. An additional advantage of looking at websites is that they should provide contact information, which allows you to ask questions and obtain a written response. Beware of any companies who do not provide a local address or information about licensing or insurance.
Goslett says that social media is also an excellent platform to garner information. “Social media gives consumers an avenue in which to share their opinions and knowledge, which goes back to finding a referral from someone who has already used a mover and has been impressed by their service,” he adds.
Not shopping around
Shopping around and getting several quotes will provide you with a better idea of whether or not you are getting good value for money from your moving company. Contact a few different providers and get quotes in writing. “During this process, remember that it is very difficult for a moving company to provide an accurate estimate over the phone without conducting an on-site inventory of the goods. The moving company must be prepared to come to the home to provide a written quote,” advises Goslett. “If they insist on a signed contract or deposit before they are willing to provide a quote - rather look elsewhere.”
Taking too many unnecessary things
Moving is a great time to go through all the items in the home and decide what to keep and what can be thrown away. If an item hasn’t been worn, seen or used during the past year, then you probably don’t need it. If you are not keeping it for sentimental reasons, why not give it to someone who will get some use out of it. Evaluating your possessions before you move, will ensure that only the items you want and need go to your new home.
Failing to schedule your move well in advance
Preparation is a key ingredient to a smooth and hassle-free move – so prepare well in advance, rather than leaving it to the last minute and rushing to get everything done. “If the move is scheduled weeks or even months before it happens, it will give you some breathing room and allow time to get everything packed, organised and ready to go,” says Goslett.
Not packing ahead of time
Starting the packing process well before the move will relieve some of the stress. Start by boxing non-essentials, which can be packed ahead of time and put out of the way. “Anything that is not used on a daily basis or essential up until the move can be packed in a box and ready to go.  If the move is in the warmer months, pack away winter clothes and heavy jackets, and duplicate items can be pared down to only the bare essentials,” says Goslett.
Moving will be a far more bearable endeavour if you prepare ahead of time and avoid the avoid mistakes. If you are as organised as possible, it will make the process smoother and something to look forward to.

 

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The benefits of home inspectionsTue 13 Jun 2017

The benefits of home inspections

Whether a first-time buyer or seasoned investor, purchasing a property is a substantial commitment that needs to be fully considered, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
“Because buying a property is such a big decision that can have a massive impact on your financial well-being, it is best to go into each transaction fully aware of what you are getting yourself into. Before putting in an offer on any home, consider having the property inspected by a professional who can provide you with a comprehensive list of all the home’s underlying flaws. While a home might be aesthetically pleasing on the surface,  it is important to look past that and check the integrity of the components that make up the property to ensure that the purchase won’t end up costing more in the long run,” warns Goslett.
The Consumer Protection Act will not have an effect on the voetstoots clause used in agreements of sale in an ordinary property transaction, making the need to inspect a property thoroughly ever more important. In certain circumstances, you are protected if severe defects are found after transfer, but it is difficult to determine whether the seller deliberately concealed the defect or genuinely wasn’t aware of them.
While sellers are obliged to provide a list of all the defects they are aware of, what about the defects they aren’t. Common law states sellers are responsible for all defects in the property for three years from the date of discovery of the defect.  However, the voetstoots clause protects the seller against all defects – including defects that he does not know about. In the instance that a seller is aware of a defect and conceals it, you will be able to take action against the seller, provided you can prove that the seller deliberately hid it – not an easy task.
It is often very difficult to identify any structural problems the house may have if it is not your area of expertise.  Having the home inspected will provide you with an estimated cost of any repair that is necessary before committing to the sale. Knowing whether or not there are any underlying problems with the house will provide you with the opportunity of making a more informed decision.
Home inspections don’t just benefit buyers – they can assist sellers as well. “Having your property inspected by a professional before placing it on the market will provide you with insight into what needs to be done to the home before listing. It also offers potential buyers the peace of mind that there are no major issues with the home.  A home in good repair will attract a greater number of buyers when listed and will attain a higher sales price than a home in the same area that is in need of repair,” says Goslett.
He adds that even if you are not selling your home, a professional home inspection can assist you in maintaining your greatest investment to ensure future appreciation. “Inspecting the home at least once a year will ensure that minor issues don’t become major problems. An inspector can check for damage to the foundation of the home, any faulty or outdated wiring and electrical problems, damaged plumbing or water leaks and anything else that, if left unchecked and unrepaired, could lead to a costly repair in the future,” says Goslett.
Having the home inspected is not just about maintaining your investment, but also about the safety of those who live in it. Faulty electrical systems can potentially be extremely dangerous and cause breaker tripping or, in some cases, even fire.  Unstable or insecure railings on staircases or balconies are also not safe. If these features of the home are not checked and maintained, accidents could occur,” Goslett concludes.

 

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Tips to save energy during winterMon 12 Jun 2017

Tips to save energy during winter

As we head into the cold winter months, household energy consumption will start to increase as people turn up the heat to stay warm, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
“Keeping warm during winter usually means using more energy and paying higher utility costs each month. Finding ways to reduce household energy usage will assist homeowners to keep warm without electricity bills becoming excessive,” says Goslett.
He provides a few tips that will help save energy this winter:
Regulate the geyser
The most energy-hungry appliance in the home is the geyser, so start there. According to statistical data, geysers account for as much as 40% of the electricity bill on a monthly basis. Goslett says that one solution is to switch off the geyser during the day when no-one is home and then turn it on for a set number of hours in the evening. He notes an alternative solution is to have the geyser automated so that it can be controlled remotely.
“There are several automation products available to homeowners in this country, that allow them to control the geyser’s thermostat remotely. The homeowner has the option of setting the times the geyser will be on and at what temperature – automatically,” says Goslett.  
During winter the cold piping also cools the water down as it travels through it, essentially making it necessary to use more hot water to bath or shower which uses more energy. Insulating the pipes leading out of the geyser will reduce the amount of energy needed to maintain the water’s temperature. Ideally, the entire length of all hot water pipes should be insulated to reduce heat loss, however insulating at least three to five metres from the geyser will make a difference.
Also, a geyser blanket can also add further insulation keeping the water inside the geyser hotter for longer. A geyser blanket typically consists of a 50mm layer of glass fibre insulation with reflective foil sheeting on one side. A good geyser blanket will considerably reduce the rate at which the water cools.
Although costly at the outset, installing solar panels can reduce the amount of water that the geyser needs to heat up, which can dramatically reduce electricity costs over the long term.
Energy-efficient light bulbs
Compact fluorescent light bulbs (CFL) and light-emitting diodes (LED) use at least 75% less energy than a traditional incandescent bulb and can last a lot longer. “While it depends on the type of bulb, certain energy efficient bulbs can last between 10 and 35 times longer than a regular bulb, which means that costs are saved on electricity as well as the replacement of bulbs,” says Goslett.
Energy-efficient bulbs use less wattage but are still able to create the same amount of light as a conventional bulb.  A 3-watt LED, for example, would be equivalent to a 45-watt incandescent bulb. Using less energy means that they do not get hot when used over long periods of time, and this makes them especially effective in areas where lights are kept on for longer than three hours. Not only do energy efficient bulbs reduce costs, but they also reduce the household pollutant output in the environment by creating less heat.
Frequently used household appliances
The energy output of appliances such as the refrigerator can be reduced by regulating the temperature gauge. Ideally, the temperature should range between three to five degrees Celsius.
“Check other appliances around the house as well, such as the washing machine. Around 40% of the energy used to wash clothing can be reduced by setting the machine to 30 degrees. Also, don’t use the washing machine or dishwasher when they are half full, rather wait for a full load.  Keeping the frequency of use to a minimum will reduce energy usage. While these larger items should be full, the kettle should only have the required amount of water in it, as this will reduce the time taken for the water to reach boiling point,” advises Goslett.
Opting to hang clothes on an outside line to dry rather than using a tumble dryer will also use less electricity.
Unplug unnecessary appliances
If left plugged in on stand mode, items such as laptops and other household appliances will continue to use power, so rather turn them off completely or simply unplug them. A computer or laptop, for example, can use around 20% as much power as it would if it was in full use. Unless it is necessary to have an appliance plugged in at all times, it is far more energy efficient to unplug them - this also serves as protection against lightning strikes and power surges.
Insulating the home
Heat can escape through areas in the home that are poorly insulated, such as a window that doesn’t close properly. Around 50% and 80% of the home’s warmth escapes through the ceiling. Goslett says that homeowners can reduce this to around 3% by installing proper ceiling insulation, which will also mean that far less energy is required to heat the home.
“The rising cost of electricity and worldwide depletion of resources has made it all the more vital to find ways kerb costs and reduce carbon emissions. Choosing energy efficient options and investments now will have a massive impact on our energy and resource consumption in the future,” Goslett concludes.

 

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Homeowners' associationsFri 09 Jun 2017

Homeowners' associations

With security a factor that is influencing home-buying decisions in South Africa, many are choosing to purchase homes within boomed off areas or secure lifestyle estates, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. As a homeowner in an estate or boomed off area, the buyer may be required to join a Homeowners’ Association (HOA), which means adhering to numerous rules and regulations stipulated by the HOA.
Unlike a body corporate which manages a sectional title development, in a Homeowners’ Association, each member owns the house and the erf or plot on which the home is situated. Usually established by the residents within a community, an HOA is formed to ensure that the infrastructure of an area is maintained. Another major role of an HOA is ensuring the safety of those who live within the community.
According to Goslett, the rules and regulations laid out by an HOA can address numerous aspects such as the colour that a homeowner is allowed to paint their home or whether pets are allowed on the premises. “The stipulations can be restrictive, which is why those who are wanting to buy a home within a community that is governed by an HOA should ensure that the regulations don’t conflict with their lifestyle,” he says.
Before purchasing such property, buyers need to do their research and delve into the details of the HOA regulations.  Goslett provides a few aspects to consider about HOA’s:
Are members required to pay a fee?
It is not uncommon for members of an HOA to pay a monthly premium or levy towards the association. Compare how the monthly fees match up against other similar developments in the surrounding suburbs.
How are the fees allocated?
Is is important for homeowners to know where their money is being used and allocated. Most of the time, HOA fees are allocated to the maintenance of common areas and amenities such as the outdoor landscaping, swimming pool and the gym or clubhouse. Potential buyers should find out what is included in the fee and what is not.
Have rates been hiked recently?
While doing their homework on the HOA, buyers should get the history of how much and how often the rates have increased over the last ten year period. Looking at the past will provide a window into what to expect in the future. Another important aspect to enquire about is whether any additional fees have been charged to homeowners when the HOA lacks the reserves to cover a big project.
What are the community’s priorities?
Reading the minutes of the last few HOA Annual General Meetings will give potential homeowners a clear idea of the community’s priorities and what issues and topics keep rearing their heads.
Pay attention to the fine print
Don’t neglect any aspect of the document and read through all regulations, restrictions and conditions before committing to buying the home. It will take some time to read the documentation in its entirety, but it is better to do it beforehand than move in and find out that you are unable to park a second car outside the property or store a caravan in the garden. Rather know up front, than be caught unaware with little recourse.
Penalties
What are the consequences if the regulations are not adhered to? It is essential for buyers to be aware of the penalties for non-compliance.
Goslett concludes by saying that before purchasing any property, governed by an HOA or not, it is vital that the buyer understands all aspects of the purchase and knows what they are getting themselves into. Having a clear idea of the regulations and rules an HOA has in place will provide some insight when choosing to buy a home to in a particular estate.

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Online search tips: Finding the ideal homeThu 08 Jun 2017

Online search tips: Finding the ideal home

With access to technology becoming increasingly more attainable, it has become easier than ever to start looking for a home online. However, the volume of listings available on property search portals can be rather overwhelming, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
Statistics reveal that nine out of every ten prospective homebuyers will look to the internet before making use of any other type of resource when starting their home buying journey.  “Potential buyers are choosing the internet as the resource of choice because of the convenience it provides. Users can access massive volumes of information at the click of a button without leaving the comfort of their home or office. However, while access to the vast amounts of information is why many start their search online, exposure to such high volumes of property listings could make the search harder if you don’t have a way of narrowing down your search criteria,” says Goslett.
He provides a few tips to help filter down search results and make it easier to streamline the list of homes you would like to see in person:
Price
Before looking at any homes online or otherwise, know what you can afford. “It is best to start the home buying journey by assessing your finances and getting pre-approval on home loan finance. Contacting a bank or bond origination company such as BetterLife will assist in determining what you can afford and what price range of homes to start searching in,” advises Goslett. “Bear in mind that it is best to leave a bit of cushioning in the budget. It is important to remain within a price range that doesn’t stretch the budget to the absolute high-end of the scale. When entering search criteria online be sure to choose a price range that fits comfortably into the budget’s limits.”
Searching for homes that fit comfortably within the budget will provide you with some room to negotiate should you find yourself in a multiple offer situation. “It provides the flexibility to be competitive in the market, and submit a counter offer if necessary. You will be able to put in a higher offer on a home without it putting you under too much financial strain.”
Check the map
Don’t get caught up with the images of the property and forget to look at its location. A home might have been newly renovated and is picture perfect, but where it is located will determine its potential for appreciation in value over time. You can change a home, but not its location. “Look at the map to see where the home is situated and how that ties in with your requirements. Before contacting the listing agent, consider the property’s proximity to work, good schools and amenities,” says Goslett.
Narrow down your top neighbourhoods
Each neighbourhood or suburb within a city will have a different sub-culture and feel.  “While all part of the same city, different neighbourhoods will cater to different kinds of buyers and lifestyles. While family buyers may want to live in the quieter suburbs that are close to schools, younger buyers may prefer to be in fast-paced hubs. Searching for specific neighbourhoods will greatly filter down the property search,” says Goslett.
Remember to balance character with upkeep
An older home may fit your criteria regarding features, but it could come at the cost of updating or fixing certain elements of the home. “Newer homes are often smaller but will require less maintenance from the start. It is important to find the balance between a home’s character and its upkeep,” says Goslett.
Photos and videos only focus on certain aspects
Even though technology has reached the point where one can take a virtual tour of a home, viewing a property in this way is still restrictive to a degree. “An online search is an ideal method to narrow down a property search, but seeing a home in person will give you a much better feel for the home,” says Goslett. “Walking through a home in person will clear up any uncertainties you may have and will help you to decide whether or not you can see yourself living in the property,” he concludes.

 

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Saving water is essentialThu 01 Jun 2017

Saving water is essential

With the Western Cape’s water supply at critically low levels, the City of Cape Town has escalated water restrictions to Level 4, which limits residents to 100L of water per day. Effective from 1 June, residents will not be allowed to use municipal water for outside or non-essential use.
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, who is a resident of Cape Town, says that if the water crisis continues along its currents path, the city could decide to takes matter even further by implementing Level 4B in the next two months. “While water usage levels have dropped, they are still not aligned with the daily goal of 500 million litres. Households are urged to be vigilant with their water usage, as the resource continues to dwindle to dangerously low levels. Where possible Cape Town residents need to reduce their household water consumption to try to sustain the little water we have,” says Goslett.
He notes that there are several ways that homeowners or tenants can save water in and around the home, which reduces water usage. Goslett provides a few tips that will assist people in lessening their impact on the water crisis:
Taps
It is important to make sure that after a tap is used, it is closed properly. While this seems like a relatively small thing to do, a tap dripping at one drop per second will waste as much as thirty litres of water in one day, which equates to around 10 000 litres of water a year.  That is a lot of water 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 delivering a mixture of water and air. Remember to turn off the tap when brushing teeth, as 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 short. Cut shower time to two minutes or less. 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, flush the toilet or wash the car. Installing a water-saving shower head will also aid in reducing water usage. Ideally when showering the water should not be in 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 elsewhere. When running 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. Move food from the freezer to the fridge to defrost naturally, rather than placing it under running water.
“Water is a vital commodity that we require to survive. Without water, the environment we live in could not survive. With the lack of water in Cape Town becoming water-wise in the household is essential,” Goslett concludes.

 

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Tools for the tradeWed 31 May 2017

Tools for the trade
So you’ve decided you would like to buy a property or maybe sell the house you are in, where to now?  With all the resources available to both buyers and sellers, it doesn’t have to be a daunting task, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
Below are some of the tools available to assist in smoothing the way to buying or selling a home:
Internet intelligence
Gone are the days of wading through mountains of archaic print ads with a highlighter circling possible options and trying desperately to find the one property that matches all of your criteria.  With the availability and access to technology that consumers have today, it comes as no surprise that nine out of ten property searches start online. The internet has a wealth of property-related information that can be accessed by a click of a button, which has made the web the go-to-tool for sellers and buyers alike. Searching online will cut down the viewing time and research aspect involved in buying and selling a property dramatically. 
“Buyers can simply set their specific search parameters and filter through thousands of property listings in a short time frame.  Property search portals have all kinds of information and statistics on the top areas in which to buy and the average prices per area.  Most sites will also have bond calculators to help you work out what you can expect to pay. This means that you will already have a good idea of what properties you can afford and will want to view before you have even left the front door,” says Goslett. “Online search portals also cut down on the amount of time you will spend driving around to show houses, as you can develop a list of the top properties that suit your requirements and only visit those.”
He says that for sellers, the advent of internet property listings gives each home a much greater exposure to a targeted audience of potential buyers, and therefore, a much greater chance of attracting a serious buyer.
Funding and finance
For the prospective buyer, partnering with a bond origination company such as BetterLife will help to ensure that the bond application process goes smoothly. Originators act as an intermediary between you and the banks, ensuring that you get the optimum deal on your home loan. 
Originators provide value to sellers too, in that they can assist agents in qualifying buyers before they view a property. Their expertise in assisting buyers to obtain finance will lessen the chance of the sale falling through.
“Bond originators provide excellent advice and have extensive knowledge of the various bank products and their loan criteria. Originators handle the application and paperwork, along with the motivation for finance for the buyer. Because they have relationships with the banks, they know their systems and can achieve results faster,” says Goslett.   He adds that bond originators offer their service free of charge to the consumer, so it just wouldn’t make sense not to use this invaluable tool. 
Professional service
“A real estate professional will give valuable advice on current market trends, as well as the changes in the laws that directly affect the buying and selling of residential property. With a large amount of money involved in a property sale, it is comforting to have someone who is familiar will all the different aspects involved in the transaction to assist you with the process,” says Goslett.
An estate agent will prepare a marketing plan for the home, which will involve several aspects such as taking photos, listing the property in print and online media, arranging viewings and show days and managing offers.   
He concludes by saying that ultimately sellers are looking to have their property sold for the highest possible price within the fastest possible time. And buyers are looking for the right property at the right price that suits their individual requirements. These tools will assist both buyers and sellers in matching all of these elements and ensuring a successful sale.
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Safety while showing homesFri 26 May 2017

Safety while showing homes
Sounds of the door shuffling on its hinges echo through the house. You look around but see no one, just shadows. As panic washes over you the first thoughts that run through your head are run, get out as fast as you can. Are you safe?
Irrespective of whether you are a real estate agent, seller or potential buyer, this scenario can be very uncomfortable and downright unnerving. The sad truth is that because show homes are often vulnerable targets, many real estate agents, sellers and buyers have been in a rather precarious and potentially dangerous situation. 
Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, provides a few simple guidelines and tips to showing a home safely:
Let people know where you will be
“Have a primary group of people, either family or colleagues that know where you are going and who you are meeting. In today’s technological age there is no reason to be living in a cavalier way. Most people have a smartphone at their disposal and are easily contactable through the course of the day – use this resource,” says Goslett. 
He notes that there are also several apps that can be downloaded for free to help keep you safe.  These include GPS trackers to lead people to your location or automatic video recordings to capture proof of criminal activity. While an app does not have the power to stop a senseless attack or incident from happening, it might just give you the tools to alert the right people and get help faster.  “One example of such an app is bSafe, in which you create a network of ‘guardians’ who can follow you via a GPS trace. The app also has an alarm function that can be used in an emergency situation. Pressing the alarm alerts your guardians of your exact location while recording audio and video which can be presented to the police later,” Goslett explains.
Meet and greet in a public space
If you have received a call or message from someone who is interested in viewing a property, be sure to vet the person before taking them to the home. “Ideally the first time an agent meets a new potential client, it should not be at the property of interest. While meeting at another secure location may not be the most convenient method - is convenience worth the potential risk to either the agent or the seller? Your safety should always be a top priority. 
It is not only children that should be aware of stranger danger. Anyone you have not previously met or engaged with could be a potential threat or be alert and vigilant,” warns Goslett. “Take the time to meet the person at the brokerage or public space such as a local coffee shop. An additional advantage would be to take the person to a meeting place that has a surveillance camera that both of you can be seen.” 
Use social media as a verification tool
There is a wealth of information that can be found through social media – use it to get to know a bit about the person you are meeting. With a name, phone number and email address it is possible to have access to a person’s entire social media profile. Spend some time exploring various posts to get a feel for the potential client from both a safety standpoint and relationship building vantage point. Exchanging business cards with a potential client is a relatively easy, non-invasive way to get their information and to see whether they are who they say they are. 
Be conscious of your cyber activity and information
Despite firewalls and security packages, cyber privacy breaches are still a possibility. Unsecured emails shouldn’t contain confidential information no matter who the sender or receiver is. Also never transfer any funds to accounts that have not been phonically verified with the party.
“During a show day, ensure that there are no account or identification numbers on display. All vital documents and sensitive information should be packed away in a lockable drawer or cupboard. A prospective homebuyer should not be able to walk into a home office or study with unlocked cupboards and drawers that contain either business or personal account information,” Goslett advises.
Report it
It is best to err on the side of caution and report anything strange or risky that you encounter, be it verbal, online or in person. Rather than adopting a wait-and-see approach, think safety first and report any suspicious behaviour to either the local security company or local law enforcement. “Spreading the news will help keep other in the neighbourhood safer,” Goslett concludes.
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Interest rates remain at their current levelThu 25 May 2017

Interest rates remain at their current level
The Monetary Policy Committee announced today at its third meeting of the year that the interest rates would remain unchanged once again. This means that the repo rate will stay at 7%, and the prime lending rate remains stable at 10.5%. The rates have stayed at their current figures for well over a year now, having been raised in March last year. Reserve Bank Governor, Lesetja Kganyago, said earlier in the year that the key to keeping interest rates low is to bring inflation down. For the first time since August last year, inflation fell within the target rate of between 3% and 6% last month. The consumer price index (CPI) eased to 5.3% in April, down from the 6.1% in seen March.
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that while many cash-strapped households would have been happy to see the rates cut, there are still benefits to a stable interest rate. “With the country currently in the midst of economy instability, households should see the stable rates as an opportunity to get their finances in order and build up cash reserves where possible. While building financial reserves may be easier said than done with the cost of living increasing consistently, it is advisable for consumers to use this time to cut back on unnecessary spending and put money aside,” he says. 
According to Goslett, the stable interest rate will assist potential homebuyers to assess their affordability levels and financial readiness to the enter the property market. “It is fair to say that the interest rates will probably stay where they are for the remainder of the year, with a possible cut next year.  The steady rates, along with the recent change in the transfer duty exemption to R900 000 should act as a catalyst in boosting the property market within the affordable housing sector – a sector that already outperforms all other sectors,” says Goslett. 
He adds that 56.36% of properties sold during the first quarter of this year were priced at R800 000 or below. “The statistics bring to light the high demand for housing within the more affordable pricing brackets,” Goslett concludes.
 
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What makes a valid contract?Wed 24 May 2017

What makes a valid contract?
What are the basic requirements for an agreement to be considered binding? According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, for an agreement to be considered a legal binding document, there are some key aspects that need to be in place, such as the fact that it needs to be a written document that is signed by both parties.
He notes that the agreement also needs to be made between two parties who have the legal contractual capacity to enter into such agreements. “The parties involved, which in the case of an Offer to Purchase is the buyer and seller, need to reach consensus to enter into the agreement. The agreement must also contain the name of each party, the agreed-upon purchase price and the subject of the sale, which would be the immovable property in a property transaction,” says Goslett. 
It is not necessary for the contract of sale to be embodied in one document – it can compile of two, namely the written, signed offer and the written, signed acceptance. However, if the contract has been slip into two documents, each document must make reference to the other.
According to Goslett, a letter from a seller stating they would like to buy a property for a certain price does not constitute a valid offer. For the offer to be valid, an Offer to Purchase document must be signed by the buyer and brought to the seller’s attention, either personally, telephonically, by fax or by post. Goslett says that all blank spaces on the document must either be filled out correctly or deleted if they are not applicable to the deal. He adds that if there are material elements of the proposal that still need to be discussed and agreed upon, it is not a complete offer, even if the seller accepts it.  However, if the parties agree that the matters that still need to be talked over are immaterial to the deal, the contract can be created. Unless stated as irrevocable for a certain period, the buyer can withdraw their offer anytime before the seller accepts it.
“As with the offer, the acceptance must also be in writing and signed by either the seller or the real estate professional who is acting on his or her written authority. No-one else may accept the offer on the seller’s behalf. The language of document must be easy understand and not left up for interpretation. To conclude a valid contract the seller’s acceptance of the offer will need to be communicated to the seller. Once the seller has signed the Offer to Purchase document it will be considered a legal and binding document,” says Goslett. “If the seller decides to reject the offer for whatever reason, the offer ceases to exist immediately and cannot be accepted at a later stage. If the seller counters the buyers offer – it is considered as a rejection of the buyer’s initial offer. 
According to South African legislation, once the buyer and seller have signed an agreement to purchase a property, the seller cannot accept a competing offer from another buyer before registration takes place. “However, if the current offer becomes null and void due to non-compliance with the clauses laid out in the contract, the seller will be able to enter into another agreement with another buyer,” says Goslett. 
A valid contract provides protection to both the seller and the buyer.  Having a written contract in place ensures that each party understands what is expected of them and reduces the chance of disputes or misunderstandings further down the road.
 
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Costs to consider when investing in propertyThu 18 May 2017

Costs to consider when investing in property
Purchasing an investment property can offer great financial rewards over the long term. However, it is important to bear in mind that when buying an investment home there is more to consider financially than just the purchase price. Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, says that property investors need to take into account the significant costs involved in purchasing an investment property before they decide that it is a financially viable option for them. 
“If a property is purchased as an investment, the primary objective is for the investor is to get as great a return on their investment as possible. For an investor to achieve their goal, they need to consider all of the costs involved in the process of buying, and at a later stage, selling their investment property,” says Goslett. 
He lists a few costs, apart from the purchase price, that will have an impact on investors’ return on investment:
Transfer duty – this is defined by the South African Revenue Service (SARS) as a tax levied on the value of any property acquired by any person by way of a transaction or in any other way.  Transfer duty is due to be paid within six months from the date of acquisition of the property. If it is not paid within this time, interest will accrue at 10% per annum for each complete month. 
“Something to consider as an investor is that any property purchased on or after 1 March 2017 for R900 000 or less will be exempt from transfer duty. Not having to pay transfer duty on a property will put the investor ahead of the curve right from the get-go,” says Goslett. “Also, the Transfer Duty Act exempts the acquisition of property that falls into the category of goods supplied subject to VAT. In the instance where the seller is a VAT vendor, the payment of the VAT takes precedence over transfer duty. Developers with often market properties by pointing out that buyers will not pay transfer duty. Instead, buyers will pay 14% VAT, which has already been included in the asking price.”
Transfer costs – not to be confused with transfer duty. While transfer duty is a tax paid to the government, transfer costs are the fees paid to an attorney for the work they do in the transfer process. A conveyancing attorney will be required to effect the transfer of a property and attend to the matter of transferring the property from the seller’s name into the buyer’s. The amount that investors will pay for transfer costs is set out in a tariff guideline and varies depending on the value of the property. 
Bond registration costs – the large majority of the population is loan dependent when it comes to purchasing a property. The financial institution that provides the funds to purchase the property will require some form of security, which is usually a bond registered over the property.  The investor will be required to pay bond registration costs, which includes a bank initiation fee. The bond registration costs payable will be based on the size of the bond registered over the property. The costs will be paid to a conveyancing attorney who will attend to the necessary paperwork and get the bond registered with the deeds office. 
The cost of ownership – aside from the costs involved in the actual purchase of the property, there are also the ongoing monthly costs involved with owning property, such as home insurance, household insurance, levies, rates and taxes, water and electricity, and so on. There is also the matter of maintaining and repairing the property when necessary. 
“Invariably an investment property will be let out by the investor, which means that they will have to ensure that the property remains in a well-maintained, habitable state. In fact, depending on the initial condition of the property, some money may need to be spent renovating and fixing up the property before a tenant moves in, which will also need to be taken into account.  Ongoing maintenance of the property will keep the tenant happy while protecting the investment,” advises Goslett. 
He concludes by saying that understanding the full cost of an investment property purchase will give investors insight into the level of risk they are taking, and help them to discern whether they are making the right decision.
 
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Get approval before buildingWed 17 May 2017

Get approval before building
Building from scratch or adding on to an existing property can give homeowners the opportunity to own the home they truly want, but they need to ensure that the correct procedures are followed before breaking ground. This is according to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who says that moving ahead with a building project without adhering to the necessary protocols will only make the process far more complicated and costly. 
“Anyone who wants to undertake a construction project that does not fall under the category of minor work will need to follow procedures and submit building plans for approval before construction starts,” says Goslett.
So what exactly is defined as minor work? According to the Section 13 of the National Building Regulations and Building Standards Act 103 of 1977, the following projects will be considered to be minor work:
Any tool shed, poultry house, private swimming pool change room or fuel store no bigger than 10m2
A private swimming pool
Children’s playhouse or cycle shed no bigger than 5m2
An aviary no bigger than 20m2
A greenhouse smaller than 15m2
Open-sided car-port, caravan or boat shelter a maximum of 40m2
A pergola of any sort
The replacement of a roof or part thereof
Any free-standing wall not exceeding 1.8m in height
A removing a wall or creating a wall opening that does not affect the structure’s integrity
Converting a door to a window or vice versa, as long as the width of the opening is not increased
Installing a solar water heater which doesn’t exceed 6m2 
Goslett says that for all other building projects, homeowners will be required to obtain approval. He notes that a certified copy of the approved plans will need to be available at the site until construction is complete and the homeowner receives a certificate of occupancy from their local authority. 
According to Goslett, there are several elements that homeowners will require before they apply for approval, such as layout drawings, a site plan, a fire installation drawing, a drainage installation drawing and any other applicable certificates that may be stipulated in the Regulations for the particular project. If there are existing buildings on the property that will need to be demolished before the project starts, the particulars of the buildings and method of demolition will also be required.    
“While following the correct channels could prove to be cumbersome and will take a little extra time, it will benefit homeowners in the long run. If a homeowner decides to go ahead with a building project without approval, it could affect the resale value of the property when a potential buyer asks to see the approved plans,” says Goslett. “A worse scenario is if a building inspector orders construction of an unapproved project to be stopped and obtains a court order to have the project demolished at the homeowner’s expense. The homeowner will also be liable for any legal costs incurred during the process.”
Goslett adds that aside from possibly having to pay for demolition and legal fees, the homeowner will also be out of pocket for all the money they spent on building materials and labour. In extreme situations, homeowners could also face a fine or potentially jail time. “At the end of the day, it is in homeowners’ best interest to following the right procedure and only start a construction project once they have obtained approval to do so,” he concludes.
 
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REMAX Coats and Cans gets underwayMon 15 May 2017

REMAX Coats and Cans gets underway
With winter firmly on its way and temperatures dropping, the RE/MAX Foundation is getting ready for its annual Coats and Cans initiative which will run from 15 May up until the 30 June 2017. Those who wish to contribute any blankets, winter woollies and non-perishable food items to the campaign will be able to drop off their donations at any of the participating RE/MAX offices. 
“The colder months are extremely challenging for many South Africans living in impoverished conditions. There are people in our country who cannot afford to feed their families on a daily basis, never mind purchasing additional warm clothing to get them through the harsher winter season,” says Adrian Goslett, Director of the RE/MAX Foundation and CEO of RE/MAX of Southern Africa. “The Coats and Cans initiative is an opportunity for us as a brand to get involved with our local communities and make a difference where it is needed most. The amazing response and support we receive from the public each year are inspiring, and it has helped us have a positive impact in underprivileged communities and make people's lives a little more comfortable.”
He adds that although the campaign is organised and run by the RE/MAX Foundation, the success and reach that the initiative has enjoyed over the past few years can be solely attributed to the participation of those in the local communities.  The more people who contribute to the cause, the more people we have been able to help. “As the saying goes, many hands make light work. Small contributions from a lot of people can make a significant impact on the community. As a company, we are a link in a chain and can only do so much. However, when people come together to contribute towards a common goal, big things happen, and lives change in a positive way,” says Goslett. 
To ensure that the collected items benefit the local community in which the RE/MAX office is situated - each office will nominate a charity or organisation in their area that will receive the goods. Goslett explains that the reasoning behind this concept is that the brand wants the donations received from the public to impact their local community and make a difference to the people in that specific area. “When one lives and works within a community, they will have some insight into which organisations would benefit the most from the donations.”
The public is urged to once again get involved and visit their local RE/MAX office to donate some much-needed items. “Often a warm meal and winter coat is taken for granted, but for many, it is a luxury that they simply cannot afford.  Every donation will have a positive impact on those who receive it,” Goslett concludes.
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The role of the Rental Housing TribunalWed 10 May 2017

The role of the Rental Housing Tribunal
Established during 2001, the Rental Housing Tribunal (RHT) assists in resolving disputes that arise between landlords and tenants. Made up of members with housing management, development and rental housing experience, who have been appointed by the Provincial Minister of Housing, the RHT is also tasked with implementing the Rental Housing Act.
“The primary function of the Rental Housing Tribunal is to mediate and settle disputes that tenants and landlords cannot resolve themselves in an amicable manner. Ideally, the RHT’s aim is to ensure that there is stability and harmony in the rental housing sector of the market,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. “The RHT will inform landlords and tenants of both their rights and obligations with regard to the Rental Housing Act, and will then investigate and mediate the situation at hand to reach a resolution by making recommendations to the relevant parties.”
Mediation is an informal, confidential meeting where the landlord and tenant will meet to discuss their issues in the presence of a trained, experienced mediator. The mediator will remain impartial and will assist the parties to come to a mutually acceptable solution to their problem. The landlord and tenant will be the ones who make the final decision with regards to mediation agreement – not the mediator. Once the parties have reached an agreement, it is possible for the agreement to be made an order of the court.   
 According to Goslett, the RHT deals with all aspects relating to a tenancy, such as verbal or written lease agreement disputes, the rights and duties of each party, deposit refunds, rental defaults, damage to the rental property, utilities, eviction and house rules, to name a few. 
Goslett says that anyone who has a vested interest in a rental property may lodge a complaint with the RHT. He adds that the service that the RHT provides is free to landlords and tenants and the parties may represent themselves in the matter, so there is no need to incur legal costs. 
“To lodge a complaint, the petitioner must make contact with the relevant RHT office that has authority in the area in which the home is situated. Legislation dictates that the complaint must be in writing. The provincial offices each have different complaint forms on which the complaints can be lodged,” says Goslett. “The complaints can be lodged by either registered mail or fax. It is advisable that once the complaint has been submitted, the complainant follows up to ensure that it reached the right person.”
A case is opened, and a reference number will be allocated to the matter before a preliminary investigation is conducted. The investigation will be to determine whether the complaint relates to a dispute in respect of a matter which may constitute an unfair practice, which must be determined within 30 days of receiving the complaint. To define this, the RHT may require additional information from either the complainant or respondent.  In certain instances, an inspector may be appointed to inspect the property in question and compile a report on the complaint.  
“Once the investigation has concluded, and the does relate to such a dispute, all parties will be informed in writing that the case has been opened and a date and time has been set for mediation. If no agreement is reached at the informal mediation, the matter will be referred to a formal hearing for the ruling,” Goslett concludes.
 
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Sellers - How to determine an asking priceTue 09 May 2017

 Sellers - How to determine an asking price
With a mass of information at their fingertips, buyers who are seriously looking at properties to purchase will soon become very knowledgeable about what they can get within their price range. For this reason, it is ever more important that sellers set the correct asking price when placing their home on the market, advises Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. 
“It is important to keep in mind that buyers are comparing each of the properties that they view and a home that has an asking price above the competition will not compare well – especially if it offers the same perceived value. It is imperative that sellers view their home as objectively as possible, taking emotion out of the equation and looking at the facts and figures at hand,” says Goslett. “As a start, it is possible for homeowners to obtain a municipal valuation of their property from the local authority, however, this value will not take into account any upgrades that have made to the home.”
Most sellers believe that a house is worth what they paid for the property as well as the additional cost that they have spent on renovations and improvements. While this is true to some degree, it all depends on a buyer’s perception of how much value the improvements have added to the property. “Upgrades and renovations are all subjective and are often based on personal taste and requirements,” notes Goslett.
He adds that a professional valuer will be able to provide the homeowner with a valuation of their property based on several aspects such as the home’s location, size and square metre pricing for the area. “An estate agent who is a registered valuer will be able to provide sellers with an estimated value of their home by conducted a comparative market analysis. A real estate professional will have access to information that the homeowner won’t, such as the selling prices of other homes in the area over the last six months. This kind of data is very important when determining what buyers perceive as a fair market value within the current market. The agent will base their evaluation on statistics and facts, remaining objective,” says Goslett.
Even with all the information, however, there is no exact science to pricing, and the comparative market analysis won’t include all of the differential features of the property, such as the views from the property, current condition and surrounding amenities. All these aspects must be considered by the agent and seller as they will have an influence on the price of the home. A comparative market analysis is merely the starting point, while the value of the property is fundamentally subjective. 
An element that largely influences the perceived value of property, which is out of the seller’s control, is the current market conditions. “In a buyer’s market sellers will possibly have to lower their asking price to remain competitive, whereas, in a seller’s market with low inventory stocks they will have far more negotiating power. Property pricing is synonymous with demand, and the value of a property is established by the prospective buyer.  What this means is that a home’s value is largely determined by what buyers are prepared to pay for it today,” Goslett concludes.
 
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Compliance certificates explainedMon 08 May 2017

Compliance certificates explained
Putting a home up for sale takes some preparation on the seller’s part, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who notes that they need to have all of their compliance certificates in order before taking the step of listing their home on the market.
He provides some guidance as to which certificates sellers will need to obtain to ensure a smooth, hassle-free property transfer process:
Electrical Certificate of Compliance
Legislation stipulates that every homeowner is in possession of a valid Electrical Certificate of Compliance (ECOC) when selling their home. Valid for two years, an ECOC verifies that the electrical work and installation on the property are up to standard in accordance with the regulations required by the South African National Standards. Goslett says that before the transfer of ownership of a property can happen, the seller will be required to present a valid ECOC.
He notes that an electrical certificate will cover the distribution boards, all wiring as well as earthing and bonding of all metal components, which include antennae’s and satellite dishes. It will also cover the socket outlets, light switches and all isolators for fixed appliances. However, an electrical certificate will not cover any fixed appliances such as the geyser, stove, motors, fans or underfloor heating. 
“Before the home is placed on the market, the owner should have it inspected to ensure all electrical elements of the property are installed and working as they should,” advises Goslett. “Any aspect that does not meet the requirements should be removed or fixed.”
Electric Fence System of Compliance Certificate
In addition to an Electrical Certificate of Compliance, Goslett says that homeowners who’ve had electric fencing installed as a security measure will require an Electrical Fence System Compliance Certificate. It must be noted that an ECOC and Electrical Fence System Compliance Certificate are two different documents. The Electrical Machinery Regulations of 2011 issued under the Occupational Health and Safety Act 85 of 1993, places an obligation on the user of an electric fence system to have an electric fence system certificate of compliance. This requirement does not apply if the system was installed before 1 October 2012. As with an ECOC, this certificate is required where any change to the system has been made or where there is a change of ownership of the premises on which the system exists. The electric fence system must be certified by an approved installer, and the certification is valid for two years. 
Water installation 
In February 2011 the City of Cape Town introduced a new water by-law, which stipulates that a Water Installation Certificate must be provided to the municipality by sellers before transfer. According to Goslett, a Water Installation Certificate is an area-specific by-law that only applies to properties sold within Cape Town or where the City of Cape Town holds jurisdiction.  “Every time the ownership of property changes, a new certificate must be issued,” adds Goslett.
The intent of this law is to limit water wastage as much as possible, an important issue especially now with the recent water shortages and restrictions.  The by-law also protects buyers from latent defect claims and high water bills due to leakages.
This certification checks that the water installation complies with national building regulations. It also ensures that the water meter registers when a tap is open and stops completely when no water is drawn. During the inspection, the inspector will check that rain water is not flowing into the sewerage system and that there is no cross-connection between the potable water supply and any grey water or groundwater system which may be installed.
“Although people may assume that the water installation certificate covers all aspects of the plumbing - it does not. A plumbing certificate and water installation certificate differ. A water installation certificate does not cover any leaks on waste or sewer water or drainage,” Goslett explains.
Gas Certificate of Compliance
On 1 October 2009, Regulation 17 (3) of the Pressure Equipment Regulations (OHS ACT of 1993) came into effect, which states that if a liquid gas appliance has been installed on the property, a Gas Certificate of Conformity is to be issued when there is a change of ownership. This certificate is valid for five years and must be issued by an authorised person who is registered with the Liquified Petroleum Gas Safety Association of Southern Africa (LPGAS). 
The gas certificate ensures that gas components are in a safe, working condition and are leak free. It also certifies that the emergency shut-off valves have been installed in the correct positions. For the gas components to pass inspection, they must be correctly positioned in relation to electrical points, and outside cylinders must be the required distance from doors, drains, windows and electrical appliances.
Beetle Infestation Clearance Certificate 
Although it is not a mandatory requirement, it has become standard practice that a seller provides the buyer with a beetle clearance certificate. In fact, in many coastal areas, a beetle clearance certificate has become a written condition in the sales agreement. 
Beetle certificates are usually not required for sectional title properties, or where the property is situated inland where beetle/woodborer problems are less common than in coastal areas. Banks and insurance companies will request a certificate on transfer if the home is situated in an area known to be infested. 
The beetle clearance certificate is only issued once the property has been inspected for any visible signs of wood destroying insects and deemed to be free of any such insects. The certificate is valid for three to six months. 
 
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How servitude impacts property valuesFri 05 May 2017

How servitude impacts property values
What is a servitude and how can it impact the value of a property? According to property legislation, a servitude is a registered right that someone has over the immovable property owned by another person. The servitude affords the holder the right to do something with the property, even if it may infringe upon the rights of the person who owns it. 
“If a servitude is held on a property, the owner of the property will be unable to exercise their entitlement to the property in the full capacity,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa. “The servitude implies that the property does not just serve the owner, but also another property or person. Because of this, the owner’s rights are somewhat diminished. An example of a servitude would be someone having the right to travel over a portion of another person’s property to get to their property. While not commonplace in metropolitan areas, servitudes are common in rural areas with farms and smallholdings.”
In principle, the holder of the servitude has priority. Essentially this means that the owner of the property may exercise all their usual rights of ownership, provided it does not impede the rights of the servitude holder. The owner cannot exercise any rights that are contrary to the servitude, or grant another servitude which infringes the existing one. While the holder of the servitude has the right to perform all acts necessary to utilise the servitude, they must do so in a manner that causes minimal inconvenience to the owner of the property. It is also vital that the burden on the property is not increased beyond the express or implied terms of the servitude.
Goslett says that while it may not be an issue for some, many buyers are turned off by the fact that a servitude is held on a property. As a result, servitude can reduce the demand for a property which in turn can have a negative impact on its perceived value in the market. 
According to Goslett, servitudes are divided into two main categories, praedial and personal. How a servitude is classified depends on whether it benefits successive owners in their personal capacity or if it favours the land itself. “Praedial servitudes are vested in the successive owners of a piece of land, known as a dominant tenement. The piece of land derives a benefit from another piece of land on which the servitude is held. If the land is sold, the servitude will be passed over to the new owner of the land,” Goslett explains. “If the owner of the property on which the servitude is held decides to sell, they are not required to get permission from the servitude holder, however, the new owner of the property will be required to honour the servitude agreement.”
He notes that a personal servitude differs in that it is in favour of one specific person and not successive owners. Once the specified individual passes away or moves on – the servitude falls away. A personal servitude cannot exist past the holder’s lifespan or be transferred to someone else. 
“Buyers who would like to find out whether there is a servitude registered over a property can do so by examining the title deed. Otherwise, they will be able to request that information from the estate agent who is marketing the property,” Goslett concludes.
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National Housing Report 2017 – Q1Thu 04 May 2017

According to Deeds Office data, 35 088 bonds were registered from January to March this year, with the average bond amount at around R1 027 000. It is interesting to note that during this same period the statistics revealed that 45 552 bonds were cancelled.
Average property prices up
Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that 29 654 freehold homes have been sold since the start of 2017, with around 15 932 sectional title units sold during the same time frame. He adds that the average price of a freehold property has increased by 5.9% on the price seen during 2016. The current average price for a freehold property is R1 161 481, up from R1 096 487 last year. The average price of a sectional title unit has also improved, however by a far smaller margin of 2.2%. This year the average price of a sectional title unit is approximately R944 008, whereas last year the average price was R923 348.  Goslett says that the higher increase in the freehold property price could be a result of the higher demand for this type of property. 
Affordable housing in demand
Housing statistics from Lightstone, a property information and statistic provider, reveal that the largest amount of sales traffic in the property market was from homes priced below R400 000. This price bracket accounted for 29.60% of property sales in the first quarter of this year. “The data brings to light the high demand for affordable housing in South Africa, a sector of the market that continues to thrive,” says Goslett. 
Other pricing sectors
Properties priced between R400 000 and R800 000 accounted for 26.76% of the sales, while those priced between R800 000 and R1.5 million made up 23.89% of the country’s home sales during the first three months of the year. Homes priced from R1.5 million to R3 million represented a 14.54% share of the market, while properties with a price tag above the R3 million mark, accounted for just 5.21%. “It goes without saying that as the home price bracket increases, the target audience that would be able to afford the home decreases. As the statistics reveal only a small percentage of the population is buying homes for R3 million or more,” adds Goslett.
First-time buyers
Goslett notes that around 8.49% of property transactions in the first quarter of the year were first-time registrations, with the remaining 91.51% repeat sales.  While only a small percentage of sales are first-time buyers entering the market, consumers still hold homeownership in high regard and are eager to get their foot in the door despite challenging economic circumstances. Approximately 72 771 people purchased a home for the first-time in 2016, which was 32 941 buyers less than the previous year - proof that the higher cost of living is taking its toll on prospective homeowners. The majority of first-time buyers were between the ages of 26 and 40 years old. However, consumers over the of 70 and below the age of 20 years old purchased property for the first time in 2016. Suburbs most in demand for this demographic of the market are in Gauteng and the Western Cape, close to the respective economic hubs of Tshwane, Johannesburg and Cape Town.
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Is switching your homeloan worthwhile?Tue 02 May 2017

Is switching your homeloan worthwhile?
During the property boom years of 2006 and 2007, switching home loans from one bank to another was a fairly common practice among homeowners in South Africa. However, this has diminished over the years. Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, says that as banks tightened their lending criteria, it was not as easy for homeowners to switch and the trend lost some traction in the years that followed 2007. 
While not as common as it once was, Goslett says that there could be some benefit to switching one's home loan to another financial institution, provided the homeowner keeps an eye out for any hidden costs and compares apples to apples. “If another bank is willing to provide a lower interest rate, switching can be an enticing option for homeowners. Even a small reduction of 0.5% in the interest rate could save the homeowner thousands over the term of the bond. However, what homeowners need to bear in mind is that there will be costs and possibly penalties involved in switching,” advises Goslett. “Before looking at other banks, it would be advisable to speak to a home loan consultant at your current bank and see whether they would be willing to look at renegotiating the interest rate. If the response is positive, you may have saved on interest without having to pay any additional costs.”
Goslett says that if the homeowner goes ahead with switching, they will need to look at their current home loan agreement and see what clauses have been written into the contract regarding penalties and a notice period. “More than likely the financial institution will have included a penalty clause, which could result in the homeowner paying 90 days’ interest on their current home loan if cancelled before the stipulated notice period has passed.”
Apart from the possible penalty, Goslett says that there are also other costs involved in switching. These costs include attorney fees, a registration cost to register the new home loan, valuation fees and an initial administrative fee. Often the new bank will pay the legal costs of the switch, but this is subject to a minimum duration of the new bond. Essentially, what this means is that if the homeowner decides to sell their property before the minimum duration period has lapsed, they will have to pay the legal costs pertaining to the switch when they cancel the home loan. “These aspects of the switch is why it is so important to fully understand the offering that the new bank is putting on the table and goes back to comparing like with like. If the new deal saves the homeowner interest, but offers no other benefit and ends up costing more in fees, then there is no reason to switch. The only way that the homeowner will know if they are getting a better deal is if they compare all aspects of the deal with what they currently have,” warns Goslett.  
Some banks might be willing to waive certain of the costs, such as the valuation and administration fees. There is also the chance that they would be willing to pay a portion of the registration and cancellation costs involved. If this is the case, then switching would make far more sense. 
Goslett says that depending on the work volumes of the Deeds Office concerned, the transfer of the home loan will take between 60 days and three months. The homeowners will be required to provide the new bank with copies of their pay slip, bank statements, ID and all other documentation required to assess affordability. 
 
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