Posted on Mon, Feb 07, 2011
The Debt Collectors Act of 1998 (DCA) is arguably South Africa’s most boring piece of legislation. Only the most resolute legal experts will attempt to wade through its 27 sections and try to intelligently interpret its numerous sub-sections. Nonetheless, it is an important addition to the suite of laws aimed at regulating finance. The DCA looks at how trust accounts are to be managed, prescribes maximum fees or recoveries that a registered debt collector may charge for the collection of debt and defines who may act as a debt collector. The rationale is noble; to protect the public from unscrupulous debt collection practices and excessive collection costs.
Case study:
In 2009 the DCA did, for the briefest moment in time, achieve a place in the limelight, albeit for rather controversial reasons. A ruling by the Council for Debt Collectors sparked heated debate amongst estate agents, letting agents and property managers.
The Council ruled in favour of the plaintiff, Mr Irvine, charging that Brunello Property Managers CC had acted in contravention of the Act by charging exorbitant fees for telephone calls, letters of demand and other costs without being a registered debt collector. Brunello was fined R10 000 plus costs for operating as a debt collector without being registered as such.
In their schedule of functions, estate agents are required to collect levies and rentals on behalf of clients. Most charge defaulters with penalties for costs incurred in the debt recovery process, on letters sent, and phone calls made. They have done so thinking that this falls under the auspices of the Estate Agency Affairs (EAA) Act. Many agents do not believe they are subject to the conditions in the Debt Collectors Act of 1998.
The Council differed with this view. It was of the opinion that the EAA Act was promulgated to exercise control over estate agents in their functions as such. The Debt Collectors Act, on the other hand, was enacted to monitor debt collectors and their functions.
The EAA Act does not entitle estate agents to recover overdue debts. When an estate agent begins collecting debts as an ancillary function to acting as an estate agent, that agent becomes a debt collector subject to the DCA.
Distinction:
The Council drew a distinction between an estate agent who receives rentals or levies (monies due) on a regular basis and that of collecting arrear rentals or levies (monies overdue).
So an agent simply collecting rentals or levies when they fall due on behalf of a landlord or body-corporate is not a debt collector in terms of the DCA and is acting under the EAA Act. In essence, the dividing line is where an estate agent collects arrear rentals and levies which are “debts”. From that point onward the agent is performing work reserved for attorneys and debt collectors.
Notwithstanding the media coverage of Irvine v Brunello, high levels of ignorance about the DCA remain. Some estate agents are oblivious to the existence of the act. Others who know it exists do not consider the activity of collecting rent as falling under the ambit of that legislation. The DCA is very specific that anyone who for reward collects debt should be registered under this act. The reward does not apply to the normal commission payment the landlord pays the estate agent (or agency) in terms of the lease agreement. It does apply however, to an estate agent who charges penalties and/or collection fees for outstanding rent (overdue monies). Such an agent will certainly need to register under the act.
Starting out as a rental agency:
Prudent assessment of the financial viability and long-term sustainability of opening a rental agency is a necessity. Questions you need to ask: Are other rental agents operating in the same area? How many properties are needed to cover our overheads and how quickly will we be able to build such a rental portfolio? Will we focus on short-term rental (holiday accommodation), long-term contracts or a mix of both?
A common mistake made by new rental agents is not considering all the costs in managing a property on behalf of a landlord. Andre Holtshausen, a chartered accountant and CEO of PayProp, explains. “A typical 10% commission on a R4000/m rental provides just R400/m. That is your total income, before paying for overheads, for all the time and effort in managing that specific property. Administration, correspondence or interaction with the tenant, landlord, maintenance companies and body corporates must all be taken into account in order to price your service properly. The upside is that the commission on a rental portfolio results in annuity income (if you look after your portfolio properly). This is in contrast to the once off commission on the sale of a property. Businesses with regular, strong annuity income grow in value and can be sold, if required. If commission is a percentage of the rental, you will receive, at the very least, a CPI related annual increase provided that the economy continues on an even growth path.”
Summary
In summary, estate agents who need to collect arrear rentals or levies now have three options:
1. Refer the debt to an attorney for collection;
2. Contract a registered debt collector to collect the debt; or
3. Register themselves as debt collectors in terms of the Act.
The South African Property Owners Association (SAPOA) is of the opinion that estate agents and managing agents should be exempted from the Act by specific mention. This stems from the sentiment that estate agents are subject to a code of conduct and operate trust accounts regulated by the Estate Agency Affairs Act and the Board established in terms of that Act.
If, in the future, estate agents are exempted from the Debt Collectors Act, the Estate Agency Affairs Act could be amended to include limitations on the types of fees estate agents may charge in collecting debt.
The legislation may be boring, but penalties are stiff. SAPOA recommends that until further clarity is obtained, all estate agents, property managers and managing agents, who undertake debt collection work, register with the Council as debt collectors.
To apply and for registration fees for companies, close corporations, directors and company officers go to the Council’s website www.debtcol-council.co.za.
Dieter Deppisch
Head: Property Data Research
Knowledge Factory
Posted on Wed, Jan 26, 2011
Green-Peace, hippies, and tree-huggers have often been relegated to the back row of the newsstand where they adorn the covers of new-age magazines advocating the use of incense and crystals to be “at one with the cosmos.”
But a change is unfolding. At the start of the new decade in 2010 and going forward the challenge is to showcase green-initiatives as being not only environmentally beneficial but also financially viable. Green (or sustainable) building, for example, is the practice of creating structures and using processes that are environmentally responsible and resource-efficient throughout a building's life-cycle: from site selection and design to construction, operation, maintenance, renovation, and demolition. This practice expands and complements the classical building design concerns of economy, utility, durability, and comfort.
Although new technologies are constantly being developed to complement current practices in creating greener structures, the common objective is that green buildings are designed to reduce the overall impact of the built environment on human health and the natural environment by:
- Efficiently using energy, water, and other resources
- Protecting occupant health and improving employee productivity
- Reducing waste, pollution and environmental degradation.
The focus on our carbon footprint has huge implications for housing market affordability, land-market economics and politics. In the UK, some analysts indicate that building green is significantly more costly; up to a 22% price premium over conventional methods. With buyers already struggling to afford homes in South Africa, consideration must be given to these increased costs. Ultimately the law of incentives, also known as WIIFM (what’s in it for me), is what will drive this.
WIIFM
In South Africa there is a widening gap between housing delivery and demand. Government RDP initiatives, while noble, give little consideration to long-term viability or to the comfort of the occupant. Due to corruption, financial inefficiencies and a growing population, informal settlements mushroom along urban boundaries. Accompanied by poor sanitation, health problems and pollution, the challenges are endless and solutions thinly spread. As government tries to eradicate poverty, energy needs will increase compounding the challenges.
Melissa Whitehead, Managing Director at Urban Energy Conservation & Transport (UECT) elaborates: “RDP houses are very small and do not take in to account the long term living experience of the resident. Energy issues need to be incorporated. Essentially a comfortable, smoke-free environment leads to a healthier environment and more productive workforce. These poor design principles results in most houses being unbearably hot in summer and icy cold in winter. The International Institute for Energy Conservation (IIEC) Africa has implemented the Sustainable Homes Initiative along with the Green Professionals Initiative. These two programs aim to implement low-cost design interventions to change the way that architects, quantity surveyors and builders work. The interventions include relatively simple house orientation, roof overhangs, window size and position and choice of building materials. Energy-saving principles within this program have already had a positive impact on over 60,000 houses in SA and improved the quality of life for the families that live in them.”
Practical alternatives
In the private sector shortages and the escalating costs of electric power and water, motivate developers and planners to build energy efficient or alternative energy units. These range from simple solar geysers to high-tech computer-regulated buildings. Some have electric generators powered by sun or wind or use efficient heating/cooling systems to negate the use of conventional air-conditioning.
A geothermal exchange heat pump, for example, uses the Earth as either a heat source, when operating in heating mode, or a heat sink, when operating in cooling mode not dissimilar to your home refrigerator. Such a source of “green” renewable energy is particularly useful in areas which have large seasonal air temperature variations. Relative to air-source heat pumps, they are quieter, last longer, need little maintenance, and do not depend on the temperature of the outside air.
The energy comes directly from the land; it’s free, renewable and environmentally friendly. Buildings are responsible for 40% of the world’s electric energy, resulting in 30% of all CO2 emissions. By using renewable forms of energy one can meaningfully reduce these emissions when compared to a fossil-fuel fired electricity production.
As a bi-product in summer, geo-thermal exchange heat pumps can be designed to produce free hot water to either pre-heat a domestic geyser’s water or a swimming pool. The heat comes from the waste heat extracted from the building when cooling.
These and other attributes of modern green buildings appeal to the broader buying public, many of whom are prepared to initially pay the little extra for a house or unit, knowing that running costs will be reduced and they are doing their part in the reduction of greenhouse gases.
Green Residential Certification
Following on from the Green Star SA Office & Retail Centre rating-tools, a Multi-Unit Residential PILOT building rating-tool was released on 10 December 2010 allowing for public and industry comment prior to the release of the final version.
The rating tool assesses the environmental attributes of new multi-unit residential developments such as apartment buildings, townhouses, gated communities, retirement villages and golf estates. The tool assigns a Green Star SA rating to the base-building dwellings, common property and shared services and infrastructure on the basis of design potential. In due course, these and other certification services will become sought-after marketing tools, attracting more and more energy-responsible buyers.
Summary
Environmentally, South Africa has reached a tipping point. Irrespective of whether the property being developed is for low-cost RDP housing or a large office building, there are unambiguous benefits. Energy conservation principles and interventions are a critical component of the sustainable development paradigm and can help forward-thinking professionals appreciate the “do-good” factor as much as ensuring such a project is financially in the black. Indeed, green is the new black!
Dieter Deppisch
Head: Research & Development
Knowledge Factory
Posted on Tue, Jan 18, 2011
In 
the cut-throat world of business competitiveness, creating a strong, positive and memorable presence is the key to survival. Whether you are an executive in a large company or a part-time estate agent, the business card is an effective communication and marketing tool.
But like any tool, it must be used properly. E-mailing as well as social networks are now di rigueur and we carry cell phones with a plethora of applications. But there are two reasons why business cards remain indispensable:
- The simplicity of paper. No operating system required, no batteries to run flat. Also, as humans we are drawn to all things tactile.
- Marketing Power. Business cards are often the start of a marketing interface with a potential client. Business card design and etiquette has yet to supplant the digital realm.
This diminutive 90mm x 50mm mini-billboard can be kept in a purse or pocket. Its colour and logo represent your business, and invites clients to contact you. Unless a client has an outstanding memory or pen to write everything down, you will be soon be forgotten in the sea of suitors vying for their support.
Because of this representation, your card should not only provide essentials but should also speak for and about you. Not just in a written sense, rather the overall image should be aligned with your business objectives. Business experts provide these 2 important points to remember:
1. Keep the details updated. It is estimated that over 80% of cards contain inaccurate information. Since contact in the digital age is mostly via e-mail or telephone, fax numbers and postal addresses are no longer necessary. Nor is a 17 point list of services you provide. Be precise and concise.
2. Availability is key. Unless you are swimming or diving, carry your business cards with you. Some of the best opportunities for networking are outside business hours. But, while you may be tempted to whip out a card every time you meet someone, etiquette suggests its best to offer your card:
- When someone asks for it or when you ask someone for theirs;
- At the conclusion of a meeting with a client; and
- After a meal or networking function, offer your card as you leave.
If your card conveys the proper message you will be remembered for the right reasons and will support your professional persona. Choose a style that’s appropriate for your business, industry and personal style.
When designing the card consider:
Uniqueness – if your card doesn’t stand out in a pile of other cards, chances are people won’t remember you. You need to make your card different.
Typography – fonts have a voice, so choose one that best represents who you are and make sure to choose one that is easy to read.
Feel – appeal to the sense of touch. The thicknesses of the card, its texture, glossy or not all make an impact.
Colour - Blue, the symbol of water, harmony, honesty, and knowledge is also considered the global colour of business because it is associated with reliability. Black and its links to seriousness, elegance and authority may be characteristics you may want to project for your business. Yellow is the colour of vibrancy, summer, cheerfulness and a sense of humour. Red is the colour of excitement, warmth and intensity while green represents that which is fresh, environmentally-friendly, natural and pure.
To Photo or not to Photo. People generally remember faces far easier than they do names. Real estate agents work in a highly competitive environment. If one card has a photo and another does not, which agent will the seller likely remember?
Staying memorable. Allow for some blank space for your client to write a note. It does make it essential for purposes other than just your details and may be kept longer for the written note.
For your clients or potential clients to keep you top-of-mind, consider a magnetised card for the fridge door where they'll ‘see’ you countless times a day. Alternatively have a smaller version of your card enclosed in a perspex key-ring. Your choice of business card is limited only by your imagination!
Finally, when you have the opportunity to provide a business card, make sure that you ask for the client's card as well. Professionals often overlook the importance of demonstrating an equal interest in the person who requests their business card. Although it may seem insignificant, take a moment to review the other person's business card and offer a friendly comment. Your interest in their card will only encourage them to view your business card with equal appreciation. That way your mini-billboard can get to work!
Dieter Deppisch
Head: Research & Development, Knowledge Factory
12 January 2011
Postscript: Nothing is more effective than knowing who your clients are and ensuring they know who you are. Knowledge Factory’s suite of demographic segmentation tools is used by professionals in all spheres of business to align products and services more efficiently. Go to www.kf.co.za for more insights.
Posted on Mon, Dec 13, 2010
In 1884 the magazine, Scientific American, considered the technical aspects of sound in the riddle: "If a tree were to fall on an uninhabited island, would there be a sound?". They explained: "Sound is vibration, transmitted to our senses through the mechanism of the ear, and recognised as sound only at our nerve centres. The falling of a tree or any other disturbance produces vibrations of the air. If there be no ears to hear it, there will be no sound." .png)
So what is the value of a house whose owner has no intention to sell it? This question is less philosophical than you think.
Unlike a tree, technically, a house has many values. Replacement value looks at bricks and mortar. Sentimental value, on the other hand (little Johnny took his first steps here, it’s where Granddad died and the family got together for raucous holidays) is ethereal. In between these extremes we have the somewhat rarefied realm of reality, the realm of market value, municipal values, bank values etc.
A diamond ring purchased for R4, 000 and valued at R5, 000 for insurance purposes may never achieve that value at an auction and even less at a pawn shop. Fundamentally, like the silent fall of a tree on an uninhabited island, a home has no defined market value until it is actually sold. The heterogeneity of property as a multi-variable asset class challenges any determination of the value that a prospective buyer is prepared to pay for the house if it is for sale.
Many South African homeowners consider themselves as authorities on the market value of their properties. However, the belief that knowing what you originally paid for it, reading newspaper adverts of homes for sale, living in an area for a reasonable length of time somehow qualifies you in this respect is not only short-sighted but from a financial perspective, extremely risky.
In international best practice, Market Value is defined as the estimated monetary value, for which a property, after adequate marketing, is exchanged between a willing buyer and a willing seller. Additional conditions to be met are that the transaction is, in legal terms, arm’s length and one wherein the parties had each acted knowledgeably, prudently and without compulsion (International Valuation Standard, 2003).
In the good old days it was a simple case of getting an estate agent to walk through the house and do a valuation. Now though, in the age of modernity where estate agents are held responsible for bursting the property bubble through overvaluations in the hope of higher commission, more buyers and sellers are doing their own analysis.
The steep growth in property prices between 2004 and 2007, due in part to lenient lending practices, high demand and short supply of good properties, allowed for sale prices higher than their “value”, or more specifically higher than the prices of statistical indices based on historical data.
For the astute buyer or seller the best place to start your market price analysis is online. There are easy-to-use property data portals such as www.evaluatenow.co.za powered by the South African Property Transfer Guide (SAPTG). For a nominal cost one can obtain comprehensive information such as the statistically predicted market value of a property you wish to buy or sell. In addition, recent sales of other nearby properties, closest amenities, the highest, lowest and average selling prices are all provided on these reports.
Then actually drive to the recently sold homes and compare them with yours objectively to ascertain comparative value. Speak with qualified estate agents who are members of the Institute of Estate Agents (www.ieasa.co.za) to obtain an idea of the supply and demand cycle in the area. Irrespective of the price band within which your home is categorised, it is demand (or lack thereof) that will ultimately decide whether it will achieve its true market value. Undesirable features of the subject property or the suburb, as well as already high stock levels will drive prices down. The converse is also true.
Professional valuations, though more costly, are objective and based on comprehensive risk analysis. Contact the South African Institute of Valuers for qualified valuers in your area (www.saiv.org.za).
Doing this homework is not difficult and more importantly will ensure that you achieve or pay a fair market price for the target property. Then celebrate with champagne and plenty of friends to ensure that the vibrations from your shout for joy will make a sound that will be heard!
Dieter Deppisch
Knowledge Factory
Posted on Fri, Dec 03, 2010
The South African Advertising & Research Foundation (SAARF) Living Standards Measure (LSM) is the most widely used research and market segmentation tool in this country, and has been so for the past decade. It divides the population into a total of 14 LSM groups and sub-groups. These are numbered from 1-10 with LSMs 7-10 further segmented into high and low categories.
LSM is a unique means of segmenting the South African market by an analysis of 29 variables. It cuts across race and other outmoded techniques and groups people according to their living standard using criteria such as degree of urbanisation and ownership of cars and major appliances. Broadly, the LSMs range from LSM 1 (typically, rural folks with no access to running water) to LSM 10 (typically, urbanites with a domestic servant, house and car).
Understanding how this segmentation works provides meaningful insights into the way South Africa’s economy operates. Essentially, the LSM is a wealth measure based on standard of living rather than income - in fact, income does not appear anywhere within the LSMs at all. Following the “birds of a feather, flock together” adage, most members of society associate with persons of similar socio-economic backgrounds. This isolation and segregation leads to a general lack of understanding of how the “other half” lives. For business however, such ignorance can be a substantial risk. A thorough knowledge of your markets and clients, their income, living standards and aspirations form a basis for actionable insights. It allows business owners to align products and services to meet targets set for the bottom line.
For the real-estate sector, LSM data is a helpful tool to assess a suburb’s demographics, determine factors influencing house prices and in determining where a prospective buyer may want to live.
For example LSM 1-4 households (45,9% of all households) are responsible for 11,5% of South Africa’s total household cash expenditure, LSM 5-7 households (34,3% of all households) for 32,7% and LSM 8-10 households (18,9% of all households) for 55,8%. Go one layer deeper and the picture becomes enlightening. 24,8% of the total national expenditure was spent by LSMs 1- 4 on food, LSMs 5-7 spent 38,4% and LSMs 8- 10 spent 37,1%. On luxury items, however such as holidays, LSMs 1- 4 only spent 1,4%, compared with 10,8% in LSMs 5-7 households and a massive 87,8% in LSM groups, 8-10.
Demographics plays an important role in other key LSM points:
- Just under two thirds of SA’s adult population are in LSM 1-5. Just over 10% are LSMs 9-10.
- Over half of LSMs 1-5 live in KZN, Eastern Cape or Limpopo.
- LSMs 9-10 are still predominantly white (74%), and LSMs 1-5 are almost exclusively black (95%).
- LSMs 9-10 are mainly in professional and technical, clerical and sales, administrative and managerial professions. For LSM 1-5, are mostly in service, production and mining, clerical and sales.
- One half of LSM 1-5 speak Zulu or Xhosa at home. For LSMs 6-8, Afrikaans is most prevalent (28%), while within LSMs 9-10, 48% speak English, and 43% speak Afrikaans.
For property professionals the South African Property Transfer Guide (SAPTG) has now categorised over 10,000 suburbs into predominant LSM ratings. This, along with enhanced demographic data regarding age segments, income and crime levels in their Demographic Report, allows for buyers to be directed to areas where they will most likely feel at home.
Estate agents can become true ‘area specialists’ by utilizing this innovative module in their property assessments.
Calculate your own LSM at: http://www.eighty20.co.za/databases/show_db.cgi?db=fulllsmcalculator
Posted on Wed, Nov 10, 2010
Is Facebook a bandwagon?
In 1848, Dan Rice, a famous American circus clown of the time, used his band-on-a-wagon and their music to garner support for his political campaigns. As he became more successful, other politicians desired a seat on his bandwagon, hoping to be associated with his success and the term “jump on the bandwagon” became immortalized in history.
Until recently a Face was something you saw in the mirror, a Book was something you paged through and Tweet was what canaries did. FACEBOOK and TWITTER however, are SA’s best known and used social media platforms. Used daily by millions, worldwide, it comes as no surprise that estate agents have quickly moved to use these mediums to advertise property.
However, has jumping on this bandwagon been successful? That depends on which wheel you are looking at.
In logic, an argumentum ad populum ("Appeal to the people") is a fallacy that argues that something is true simply because many people believe it. From which one could draw the conclusion: many property professionals are advertising on Facebook therefore it must be a fantastic selling tool.
Indeed, hundreds of estate agencies joined Facebook this past year and thousands of estate agents market their listings on their pages. Yet property sales in South Africa are not exactly booming. Latest data out from the South African Property Transfer Guide (SAPTG) reveals a 6% decline in sectional title sales and a modest 11% increase in full title sales in the year ending July 2010 compared to the previous year. The data is revealing. While single digit rises in both average and median property values are encouraging, they are beginning to taper off from their highs in Q2 of 2010. We cannot, however, blame TwitFace for this. Despite modest rate cuts, our fragile economy remains in recovery mode, constrained by debt deleveraging and tight lending criteria.
Another angle: in microeconomics, the bandwagon effect defines the interactions of demand and preference. This effect arises when people's preference for an item increases as an increasing number of people buy it. Relatively pricey yet wildly popular commodities such as iPhones and X-Box consoles are typical examples. Real-estate, on the other hand, is not. It is subject to third-party influence, notably the state of the economy and the (un)willingness to extend credit by financial institutions. The bandwagon effect can disturb the normal theory of supply and demand, which assumes that consumers make buying decisions solely based on price and/or personal preference.
So can social-media really help create demand and sell more properties? The answer is YES! Yet only a handful of agents are seeing positive results. Slapping 20 house listings on your Facebook page and waiting for the fish to bite is not going to net you the kind of commission you may be after.
Internet psychologist Graham Jones explains: "The psychology of sales involves a part of our brain known as the prefrontal cortex. Brain scans show that when someone is in the “I’m going to buy this” mode of thinking, their prefrontal cortex is lit up like a Christmas tree. When you have buyers sitting in your office, smiling and about to sign the sale contract, you can be sure that their prefrontal cortex will be firing on all cylinders.”
Jones further asks some intriguing questions: “So, what can you do online to get a house-buyer’s brain into 'buying mode', and stimulate their prefrontal cortex? Studies confirm that if you talk about your clients and their interests, rather than your company’s history, prestige or service, then a sale is more likely. So, if focusing on the house buyer achieves more sales in the 'offline world', why is it that most estate agents do the exact reverse, online?".
Clearly, it is social media abuse to load property listings on your Facebook page or invite all your ‘friends’ to every show-house event. You may soon destroy the very fan base you so eagerly seek. Clients know where to go for listings – an estate agency’s website! Rather, what is needed is something more human, more appealing. Listen to your clients, ‘eavesdrop’ on Twitter and Facebook conversations about property buying, listen to their needs and experiences, then join in and offer specific advice and information. Guess what? You will light up their prefrontal cortex, making them more receptive to your sales pitch.
To summarize: Social media should not be limited to advertising property listings or estate agency’s services – instead, treat the social media bandwagon like a customer service and public relations tool that allows for building a loyal following of clients who appreciate your regular engagement with them. Use it to be a change catalyst – someone who refashions the public’s negative perceptions of estate agents, one person at a time by your professional work ethic. Use it to change the way you think about selling property!
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And here are some tips to riding the wagon:
• Keep it Simple (no space for FarmVille)
• Be Authentic (less pushy, more engaging)
• Build Relationships (it takes time)
• Relevant content (current and consistent)
• Keep business and private pages separate
• Monitor traffic daily (adjust, adjust, adjust)
Dieter Deppisch
Business Insights R&D
Knowledge Factory
Posted on Thu, Sep 30, 2010
Last month saw the launch of our new reports. Much of the change included enhancements to existing reports, such as quick link navigation between our reports. However amongst the changes was a totally new report - the Suburb Review Report - a report so good we feel it warrants a feature! In a nutshell, the report gives a comprehensive picture of the property profile of a suburb for both full and sectional title, and includes all the data detailed below.
Outside of purely property related information, the report includes suburb amenities such as shopping centres and schools, lists neighbouring suburbs and calculates the total extent (size) of the suburb. A full vs sectional title split pie graph gives a quick picture of the make-up of properties within the suburb.
Property statitics, separated and supplied for both full and sectional title properties provides a whole host of information such as number of properties, percentage of FT/ST of total properties, median land size, median sale value and predominant price band into which most transfers fall. Also included is the number of sales in the past 6 months and number of sales in the past 12 months - a good indicator of whether activity is increasing or decreasing in an area.
A sales history table displays the following summarised data per year for the current and preceding 5 years: number of sales, total value of sales, highest and lowest value, average sale value and median sale value. The number of sales and median values per year are plotted onto graphs for a quick illustrative view of change. A high and low value graph is also included with a 1, 3 and 5 year high and low median change percentage table.
A 5 year history graph illustrating number of cash versus bonded sales not only shows the cash/bonded split, but also highlights the trend of this split. A pie graph displays the split of bonds to the top lending institutions, a good guide to which institutions have a risk appetite for the area.
For comparative purposes, transfer statistics for the current year are supplied for the 4 closest/adjacent suburbs. Information for each adjacent suburb includes number of sales, total value, highest and lowest value, average value and median value. Graphs for number of sales and median values allow for a quick comparative view of these adjacent suburbs. Once agai
n, full and sectional title data is split and provided separately.
The report is jam packed with all the information to arm yourself with local property knowledge. To view a sample report, click
here to download from our report webpage.
Posted on Mon, Aug 02, 2010
Richard Strahm (REMAX) on difficult encounters in houses:
As an estate agent, I’m not a prude, really. But I always wonder what’s up when I show a home that has nude paintings and photographs hanging on the wall.
The nudes don’t make me uncomfortable – but they might make some potential buyers uncomfortable. And an uncomfortable buyer may not remember all the good things about your home. They’ll just remember it as the house with all the nudies in it.
I showed a house yesterday that had an entire wall in the living room covered in nudes. Reproductions of old masters, contemporaries, abstracts. One that I could only surmise was the homeowner’s mother-in-law. Did my client talk about the magnificent fireplace? The wall of windows overlooking the lush back yard? The historic doors? No. He started talking about the seller, and why he had amassed such a collection of nudes.
Last year I had a listing where there was a large nude photograph in the dining room. It was a nude of the homeowner herself, as taken by her artist husband. It sure was a beautiful and artistic photograph. But it made even me uncomfortable knowing I was standing next to the (clothed) model at the time. She asked me if it would be alright if they left the picture hanging while trying to sell their home. It’s so easy to hypothetically say “no” to that question, but not so easy to do in real life!
I put it in the same category of questions as, “Do these pants make me look fat?”
My advice to all people trying to sell their home: Lose the nudes.
If you have to ask yourself (or your Realtor) if something might not be conducive to a sale, you already know what the answer is. “Is this picture too risqué? Should I take it down?” YES! I always tell people that it's not their "home" when it's on the market -- it's a high value asset that they need to get top dollar for!
So, No Nudes is Good Nudes.
Author: Dieter Deppisch
Posted on Thu, Jul 29, 2010
YOU know how much a house is worth. You have property statistics, transfer history and reports at your fingertips, not to mention the years of experience you may have in an area.
However, a seller's (often inflated) perception of value is often marred by emotional attachments and personal taste. Plus, of course he would naturally like to get the maximum price he can for his property. On the flipside, a buyer intending on making an offer, wants to get the lowest price he possibly can. This disjuncture in value perception often leads to mistrust of your market related estimations. So how do you bring your seller, and buyer, back down to earth in your price counselling process? We have the answer - EVALUATE!
A SMS valuation service makes property valuations convenient, affordable and available to buyers and sellers. South Africa’s first mobile property valuation service provides instant property value estimates to any cell phone. Available to everyone nationwide, anytime and anywhere, EVALUATE is an easy way to empower your seller and/or buyer with information. This tool simplifies your price counselling process by empowering your seller with an independent and realistic valuation. In addition, buyers can be encouraged to use this tool to check their proposed offers against an objective price prediction.
At a fraction of the price of a traditional home valuation, EVALUATE costs just R30 per SMS, giving buyers and sellers alike an unbiased and informative estimate of a property’s value. Objectively receiving a property’s estimated current market value is as easy as SMSing the word ‘FIND’ and a property’s ‘ADDRESS’ (number, street name, suburb and town) to 32545.
Your client will instantly know what the last selling price of the property was, when it was sold, its estimated current market value, as well as an indication of possible high and low end price range. If this full valuation on the property is not possible due to insufficient data, EVALUATE returns a suburb summary – showing the most recent highest, lowest and average values achieved in the area for a nominal charge of just R1.00. If the address cannot be found then there is no additional charge over and above standard SMS rates.
EVALUATE draws on data from Deed’s Office registrations and the proven property market expertise of SAPTG.
This incredible tool is modelled specifically for the South African property market. The advanced neural network filter takes into account the up and downs and uniqueness of our real estate market. A confidence rating with the SMS report indicates the likelihood of the predictions being accurate, based on algorithms and logical calculations and looking at all the available data. A medium confidence rating means that reality should be within 10% of that prediction SMSed through.
For the same price, a more detailed EVALUATE report is available online.
To understand more, click here or on the image to watch our video clip showcasing EVALUATE, and visit our website www.evaluatenow.co.za.
Posted on Wed, Jul 21, 2010
Struggling to empathise with an angry seller, or a panic stricken buyer? We hope this light-hearted content on emotion in real estate will help you feel a little more in touch and a little less crazy...
Accomplishment – This can be experienced on all sides when a transaction comes to a close. The buyer has successfully completed their home buying journey and a seller begins a new chapter elsewhere. Agents on both sides see a job to completion, with satisfied clients and monetary compensation as rewards.
Apprehension – We’ve seen this type of buyer client. They’re unsure about so many things - the neighborhood, the schools, the commute, the price, the condition of the home. Everything makes them nervous.
Anger – More likely visible on the seller side, those going through financial hardships, divorce or job loss. This is especially prevalent with short sales, or impending foreclosure. But occasionally it occurs in buyers as well when they are forced to move due to some of these reasons.
Anxiety – Finding time for a home search, delving into finances and paperwork to prepare for a purchase and the physical act of viewing homes with family in tow, can be very exhausting. Sellers have anxiety as well when they must keep their property in show-ready condition each day, vacate their home for viewings and open houses. If their family includes children or pets, they have additional worries.
Elation – Of course this is a great emotion to be around. It occurs often with buyers when they’re handed keys to their new home, especially if this is their first one. For those that are purchasing a retirement or vacation home, it’s especially apparent. They’ve planned and dreamed, and now the dream is a reality.
Fear – For sellers leaving under life-changing circumstances there can be much uncertainty in their future. Living alone, new jobs or schools, absence of friends, family and community. Buyers fear their loan won't be approved, that the house may have problems or that they won't like their neighbors.
Frustration – Experienced a great deal by buyers when inventory is low and they can’t find a home, or when they’re constantly outbid by multiple offers. Sellers are more apt to feel this when inventories are high and showings infrequent. They'll also express this when offers come in below their list price or when buyers ask for their personal items as part of the contract.
Grief – The sense of loss is painful and overwhelming. When families are selling because of a death or divorce they may be dealing with grief.
Joy – Who doesn’t like to be around a joyful and happy client? Sellers who get the price they’d hoped for or better, who have a deliberate and desired path ahead of them. Or, buyers who have found the home of their dreams and can’t wait to move in.
Panic – For sellers who’ve sold one home, but haven’t found their replacement home yet, they’re concerned about having nowhere to live. Buyers worry that they’ll never find something suitable in their price-range, will miss out on tax benefits and may end up being renters forever.
Relief – In most cases, whichever of the emotions above is at play, coming to a conclusion of any kind does bring a certain amount of closure, and thus relief to everyone involved.
Worry – This is probably the one I see the most often, whether buyer or seller, and probably the one we experience most as agents. Is it priced right? Will anyone come to the open house? Who will be the agent on the other side of the transaction? Will the bank ok the loan? What will the inspections uncover? Will the buyers back out?
The list goes on, and we can all make ourselves a little crazy. Our best course of action is to stay calm, plan for success and deal with challenges as they come.
Regards,
The SAPTG Team
Author: Dieter Deppisch