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Why You Must Sign a Mandate Before Selling Your Property

blog105We are sometimes asked why we at Zest Property Group will only begin marketing a property when a mandate is signed – and not a moment before.

Well we believe that it is in a Sellers best interest to understand exactly what the nature of the arrangement is upfront so that there are no disputes later.

It is not unusual for property owners to have vague recollections of their property details such as their property name or even the exact size. Many properties for sale in Dullstroom are farms with unusual portion numbers or houses with odd erf numbers and part of our mandate clarifies the property details so that your property is marketed correctly. Our mandate also confirms in what specific entity the property is held or any title deed servitudes or restrictions.

Sometimes, if a property is owned by more than one owner, we need to clarify which parties need to be kept in the loop throughout the sales process and ultimately which parties have the right to give us a mandate.These may seem minor technicalities but they count when it comes to a hassle-free sale.

Some further benefits of signing a mandate

  • A mandate provides the estate agent with time to secure the highest price
  • It eliminates unecessary confusion as the terms of the mandate are clearly stipulated and agreed upfront by both seller and agent. These include mandate type, commission rate, length of the mandate etc.
  • In some cases, if you sign a Sole and Exclusive Mandate your Agency may offer you a better rate of commission. For example at Zest Property Group Dullstroom all our open mandates are signed at 7% plus VAT while our Sole and Exclusive Madates are signed at 6% plus VAT.
  • It is safer to have a limited amount of people through your home and the estate agent with your mandate will ensure to their best ability that the prospective buyers are genuine.
  • It creates a moral commitment between the agent and the seller ad motivates the agent to sell your property
  • The agent will most likely provide you with regular activity reports (at Zest Property Group Dullstroom all our sellers are sent a monthly activity report that outlines all advertising, enquiries and feedback for the previous month)
  • The agent is more eager to spend his advertising budget on your home.
  • Most importantly you avoid the risk of double commission claims.

If you are thinking about selling your property and would like to talk through the various options, then please don’t hesitate to contact us on 013 254 0219 or email info@zestpropertygroup.co.za.

Zest Property Group Dullstroom – selling properties for sale in Dullstroom and the greater highlands of Mpumalanga. Some info courtesy of Property Power 6th Edition.

How to Sell Your Home In A Buyer’s Market

o all Sellers out there, it’s a Buyer’s Market! There are no if’s buts and maybe’s about it and NO amount of wishful thinking is going to change it.  If you are in limbo because you haven’t sold your property, here are some tips on how to do so in a depressed market.  A good start is to accept that property values have come down – once you do this you give yourself the best possible chance of success.

Realistic Selling Price

Firstly, set a realistic market price. Your Estate Agent can point you in the right direction by providing you with a CMA (Current Market Analysis) when listing your property. The  CMA will give you an unbiased view as to the true market value of your property.

A good CMA will include:

  • an Area Analysis of properties sold in your area,
  • a Comparable Property Sales Analysis
  • an Age Analysis of how long these properties have been on the market
  • any special features or negative aspects specific to your property and how these may influence the selling price.
  • Finally – A suggested listing price

 

Pick The Right Agent

During the economic downturn, almost half of all estate agencies in South Africa closed their doors. It bears to reason that the ones still standing have been doing something right and are ready to take you through these hard times with honed selling and negotiation skills. An experienced Agent will not only market your property to new buyers, but more importantly, has a network of loyal, long-term buyers just waiting for the right property to come along. These buyers trust your Agent implicitly and if your property meets their checklist – then you may have a quick sale ahead of you – fantastic! Remember, getting an offer quickly does not mean it is under priced or is a sign of things to come – it is most likely because your Agent has exposed your property to these clients.

Buyers Will Bargain

Your price should allow for a small degree of negotiation as most offers right now will be lower than the asking price – especially if you have a cash buyer. ‘Cash is King’ because getting bond finance now is harder than ever. Don’t be fooled that the banks have ‘opened up their lending coffers’, the reality is that the true national average of bond application approvals is sitting at a miserable 35%.

Dealing With A Lower Offer

Getting a lower offer can be a tough pill to swallow. So how do you deal with it? 1) don’t be too rash to turn down an offer – take your time. 2) Don’t be insulted by a lower offer, expect it (if you had the cash, you would also do the same). 3)  Decide if you would rather have the money now and avoid further interest payments or take the chance of waiting months or years for a  higher offer. 4) Finally, understand that you have the right to counter-offer and if you show a willingness to negotiate in part, this is a good strategy to adopt.

Budget for Commission

Your Agent does this for a living.  All he does is eat, sleep and breathe property and is your biggest ally to sell your biggest asset. However he does this totally on risk (you don’t pay him a retainer to go about selling your property). Also, as commission is a percentage of the final selling price, it is in your Agent’s interest to get the best possible deal for you. In turn you need to acknowledge that if you get a lower offer, your Agent is also getting a lower commission –  so do not expect to negotiate commission down further at that point. You should be happy to pay for a job well done – especially in a tough market, so factor the full commission into your asking price.

Don’t Sell

If you don’t have to sell now, then don’t. There is nothing more detrimental than having your property on the market for months on end because the price isn’t market related. The market will bounce back, but it’s going to take time.  The choice is yours.

 

Need A Deposit? No Cash?… No Problem!

blog109You have finally found your dream home in a cute country village. The offer is in, the paperwork is done and the bank has indicated that you will have no problem getting a bond. Its all going very well…

Finally your bond approval arrives, but it is only for 90% of the value of the property. Now you need to find 10% deposit in cash which you just don’t have. Before you give up on your dream, remember that there are other avenues to get a deposit. Here are a few ideas:

What can be used as a deposit?

  1. A cash amount that a buyer can deposit with the conveyancing attorney;
  2. Government State Guarantee;
  3. Pension Backed Loan – This is a loan against your Pension Fund which can serve as a guarantee (Selected employers only – your bond originator will be able to tell you if you qualify);
  4. Some Type Of Collateral Security for example:
  • A Life Cover Policy with a surrender value (older than 2 years)
  • A Fixed Deposit
  • Surety with security (only through directly related family members).  Please note that as the buyer you will still need to be able to afford repayments on the loan and both buyer & surety have to qualify in their own regard.

Now sit back, relax and get ready for moving day.

Self Employed, Need A Bond?

New statistics released by ooba www.ooba.co.za – South Africa’s leading bond originator – show that self-employed South Africans are finding it increasingly difficult to have their home loan applications approved compared to their employed counterparts.

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The statistics show that 57.9% of self-employed applicants had their bond declined in the 2009/10 financial year, an increase of 2.4% compared to 2008/09. This compares with a 3.5% fall in the decline ratio for employed applicants in 2009/10 to 48.1%, from a 51.5% decline ratio the previous year.

According to Saul Geffen, CEO of ooba, self-employed applicants tend to be viewed as a higher risk than employed applicants, due to the perceived instability in income of these individuals, particularly in these challenging economic times.

He says it is important, however, for self-employed applicants not to be disheartened if their bond application is turned down. “There is no doubt it is harder for self-employed applicants to obtain financing for their bond but there are a number of ways to improve the likelihood of gaining approval, one of which is applying through a bond originator.

The wide variances in the credit requirements and decline ratios across the banks illustrate the growing importance of applying to multiple lenders. In the last financial year there was a 32% difference between the banks with the highest and lowest average decline rates.

Geffen says that by using a bond originator, applicants can make simultaneous submissions to lenders, which saves time and avoids duplication of documentation. “Credit and risk profiling of applicants are specific to each bank. It is thus important that applicants are not disheartened by the first decline decision they receive from a lender, and that they persevere with other banks.”

The latest statistics from the oobarometer showed that the ratio of applications declined by one lender but approved by another increased significantly, up 11.2% year-on-year to 30.4% in August 2010.

Homebuyers use bond originators to shop around for the best home loan deals and to secure quick approvals. A bond originator’s service is at no cost to homebuyers and without any obligation to accept a particular loan sourced.

Applying For a Mortgage Bond? Think Like A Bank.

With NCA requirements & strict Bank Credit Policies the process to get financing does take longer than before. The main reasons for bond applications being declined are affordability and your credit profile. Prior to the NCA, affordability was a simple calculation based on 30% of income.  Affordability is now based on net disposable income and for most people this means access to less credit than would have been the case in the past. A clean credit history and being up to date on all debt instalment payments is important

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If you understand what the Act stipulates for loan applications, then you can understand what type of information the bank is going to ask of you.

  1. Prepare a list of all income & expenditure. You must give total disclosure to your bank as they need this to determine your affordability.
  2. You must also provide a list of all your assets & liabilities (such a car, cell phone, and existing bonds that you pay off on a monthly basis). This will determine your risk or security profile for the bank;
  3. Ensure your current payment profile is excellent! Pay on time every month at least for the 6 months prior to your application!
  4. Have your documents to hand including:
  • bank statements

Note – Only income or salaries that reflect in your Bank statements will be accepted by the banks. The same goes for Rental Income that you may receive. If it’s not reflected in your bank statements – it won’t count towards your application.

  • ID documents
  • proof of residence
  • confirmation of employment

Did you know…

  • That  Banks have the right to withdraw from an approval at any given time prior to the registration of a Bond?
  • If you have an Administration Order against you – no credit may be granted by any financial institution;
  • If you are undergoing Debt counselling – no credit may be granted by any financial institution;
  • If a loan has been granted to you over 12 months ago – the Bank will review your application AGAIN before registration takes place.

HAVE ANY BAD DEBT? Get your name cleared ASAP!

  1. If you have any bad debt, you will need to provide proof that you have settled this debt, your bond originator can help you with this process.
  2. If you have been blacklisted – your will need this to be removed & your payment profile behaviour updated to reflect this.
  3. Remember that this information is only updated once a month which can cause delays in processing.

Get that Bond Approved Now

Deposit valuable to get a home loan

When applying for your mortgage bond, if you are able to put down a deposit, it is not only more likely that your bond application will be approved, according to Ooba, South Africa’s largest mortgage lender, you will also qualify for a better priced loan.

Ooba’s statistics over the last few months have shown that you have approximately double the chance of having a homeloan approved if you put down a 30% deposit than if you put down no deposit at all. As of July 2010 the average deposit made on all bond approvals was just under 20% of the purchase price.

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Get yourself a mortgage originator – you have nothing to lose, its free!

 With the property market recovery in full swing, the mortgage origination industry has been warmly re-embraced as a necessary home loan acquisition channel by the local banking sector.

Home buyers have realised that the playing fields have changed, and now more than ever need the services of a good mortgage originator.  Before the introduction of the National Credit Act (NCA) in 2007, bond originators mostly got the best lending rate for clients.

However, the value of using a bond originator has strengthened even further, as securing the actualapproval has gained in importance.  You need a skilled bond originator who can submit your application not only in the best possible light but simultaneously to multiple lenders to ensure a greater chance of approval and on the best terms. Additionally, duplication of documentation is avoided ensuring fast approvals while benefiting from a single point of contact to manage the entire process.

Remember that for every bond application declined by one bank, you have a 30% chance that your bond will be granted by another one!

 

Information kindly provided by Ooba

TOP 8 TIPS TO GET A MORTGAGE BOND

Here are some useful tips to ensure you have the best chance possible to get a mortgage bond. Gone are the days where you could just go to your bank and have a very good chance of getting a home loan. Here is some info that you should know before applying for a bond.

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1.    Appoint a Bond Originator – Its FREE

Sometimes all it takes is one aspect of your application to be submitted incorrectly to make an otherwise successful application fail.  Your originator will ensure that your application is 100% which will greatly increase your chances of success. Furthermore this is a free service, it doesn’t cost you a thing.

2.    Be Accurate

Make sure the information included in your bond application is 100% correct. Any mistakes could result in a delay or worse, a negative reply from the bank.

3.    Get a copy of the Title Deed

You would be surprised how often the incorrect Erf numbers, section numbers, door numbers or physical addresses are given by a Seller. Your Zest Agent can apply for a copy of the title deed on your behalf.

4.    Want To Go Direct? Think Again.

The banks are now asking for almost double the information needed for a home loan application than before, and if you think your bank manager has any influence on the outcome of your home loan application – think again!  If you apply direct, and your application fails and then you decide to work through a bond originator thereafter, your failed original application could count against you.

5.    Get pre-qualified

Did you know that your Bond Originator can help you work through a pre-qualification process? This will prevent a bank declining your application just because you failed to qualify for a loan and then had to arrange for another party to be added to your application after submission.

6.    Know Your Credit Rating

Did you know that you are entitled to receive all the information on your credit profile? You can get this information free once per year. It is always a good idea to “check” your  profile BEFORE starting the buying process. You can do this through Experian 0861105665 or Transunion (commonly known as ITC) on 011 214 6000

7.    You’re Blacklisted & Didn’t Even Know It!

With the implementation of the National Credit Act came transparency across all credit providers. It just takes one inadvertent late payment on a shopping card to affect your credibility rating (and often you don’t even know that this is the case). This is common and in most cases bears no reflection on your credit reputation! Don’t despair, your bond originator is trained to help you clear your record and will then help you apply when you have the most chance of succeeding.

8.    Respond Quickly

Your application will require you to be ready to supply all documentation asked for and to be ready to provide further information when requested from the bank.

If you would like us to arrange a free consultation with a Bond Originator with a good track record, click here.

Is It A Dullstroom House, Estate, A Farm Or A Stand? Help!

So you think you know what type of property you want to own in the country. You would be amazed at how many buyers we meet who walk in with their wish list and end up buying something completely different. There are some things to consider.

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Farms

Owning a farm offers you total and utter freedom. If you want to paint your house purple, fish your own private trout waters, grow an organic vegetable patch or navigate your land with a quad-bike (without asking your neighbour’s permission), then this is the option for you.  If you don’t plan to live on your property permanently – do you have the means to ensure it is managed or looked after? Farms are wonderful for privacy and freedom, but they do require some work, for example the burning of fire-breaks in fire season.

Residential Homes

Do you want a house on a small holding or in a secure “lock-up-and-go” residential estate?  Do you want to be a five minute walk from the local pub or further afield on the outskirts of the village where it is more private.  There are only a handful of residential estates in Dullstroom itself, each with their own attributes (size, access to amenities, density etc), which offer security, but one must remember that you need to abide by the home-owners association rules and regulations.

If you still aren’t sure, then perhaps it is worth considering buying into a Country Estate.  You get the best of both worlds by owning a home with the added advantage of being able to access all the amenities the estate has to offer including country walks, golf, horse riding, game watching mountain biking and excellent fishing, but without the hassle of maintaining the common property or dealing with staff issues.

There are some incredible country Estates in the Dullstroom area from Walkersons Private Estateand Dullstroom Country Estate (both offering game and trout fishing) to The Lost Valley the latest low density estate to hit the market.

Each property type is unique and it is worth speaking to your local estate agent to discuss which one appeals to your personal requirements best.

No MacDonald’s Isn’t Coming To Dullstroom!

Over the past decade investor interest led to a property boom in the quaint village of Dullstroom – especially in the Leisure estate market. Lifelong visitors to Dullstroom, who are very protective of ‘their village’, were initially worried that this quiet country town was going to lose its country atmosphere. Contrary to popular belief, though, McDonalds isn’t coming to Dullstroom!

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What the boom did do was bring economic sustainability to the area and to attract some welcome new services including the local pharmacy opening up 3 years ago.  Dullstroom, due to its fortuitous geographical location – snap bang in the middle of the popular Johannesburg to Kruger National Park tourist route – and its easy 2.5hour drive from Gauteng, ensured the constant trickle of investment to help it through the economic downturn.  Since the beginning of the year with the help of the Soccer World Cup, economic activity has picked up and continues at a steady rate.

In the past, Dullstroom was the stomping ground of avid fly fishermen who kept the area’s world class trout fishing waters their carefully guarded secret.  The town slowly grew in popularity until it was put on the map when the Sunday Times national “Finders Keepers” competition hid the R1million prize at the famous Dullstroom Inn.  The secret was out and Dullstroom now attracts visitors not only wanting to fish, but who just want to relax in the country taking part in various activities from horse-riding and mountain biking to antique-hunting and eating in quaint country restaurants.

Today many visitors come simply to unwind while the locals make a living from busy country enterprises. Estate development has been a natural progression. However, most of the land secured for estates is well outside the village, and most such developments want to preserve the atmosphere of quiet seclusion that discerning investors seek. Offering a taste of country living, Dullstroom is an authentic country village perfect for escaping the concrete jungle.

City slickers wishing to move their families to a safe and nurturing environment (together with the growth of mobile  offices and better broadband access in the area), has fuelled a fast growing trend of permanent relocations to the area.  With Johannesburg and the international airport an easy 2,5hour commute this trend is not likely to abate anytime soon.

As Trish Kennedy, Sales Director of Dullstroom’s Zest Property Group observes, “This year alone property sales have doubled since 2009 and so have our property enquiries in the first two quarters of the year.  Most interest has been in residential homes around the R1million mark, however we have seen vacant land and agricultural farms start to pick up momentum”.