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I IIssue: Issue:
March 2007 I Editor: Berry Everitt I |
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Your Area Specialist:
Chas Everitt International sales
agents have all the latest market information regarding
local property values at their fingertips – and
are committed to the highest standards of personal service
when it comes to selling your home. In addition, the
Chas Everitt International property group offers you,
the homeowner, the best possible exposure for your property
in both national and international markets. So if you
are thinking of selling your home, call your nearest
Chas Everitt International office today for the name
of your local area specialist - or visit www.chaseveritt.com
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Every month the Property
Signpost Newsletter will be issued to all our
subscribers, filled with real estate information to
help you make an informed decision, whether you are
buying or selling a property.
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Contents
1. Welcome
by publisher
2. How to
get the best out of the buyers’ market
3. Sellers:
Mind your language!
4. Don’t skimp
on your HOC – it’s just not worth the risk
5. Farewell
to a lion-hearted leader
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1.
Welcome by publisher
The residential property market is
contracting and sales are falling – and yet
Chas Everitt International had its best month ever
in February. Why? Well, because just as equity
investors turn to gold and gold shares in times of
uncertainty, homeowners and property investors turn
to tried and trusted agencies.
This is just what we predicted would happen when interest
rates started to rise last year and since then we
have taken great care to secure our inventory at the
right price, and to communicate the value of our accumulated
experience and expertise to property sellers.
Meanwhile, we are also proud to record that as the
number of new Chas Everitt International outlets continues
to rise towards 100, we have not had a single member
resign since we launched our franchise concept four
years ago.
We believe that level of retention is quite a feat
in SA franchising terms – especially in the
real estate industry, where agents drop out at the
rate of about 30 percent a year and brand loyalty
is not high even among principals.
Certainly, it was noted with satisfaction at our recent
National Broker Council held at Sun City, and without
wishing to be in the least bit smug, we are taking
it as an indication, along with our growing turnover,
that we must be doing something right…
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2.
How to get
the best out of the buyers’ market
Just because the market is in a phase that favours
buyers does not mean that you will necessarily find
good value everywhere.
You still need to be a critical shopper and apply
the following guidelines to ensure you make the most
of the fact that there’s not so much pressure
now to sign on the dotted line before you lose the
property to another buyer:
- Even before starting to look at possible homes,
shop around for a mortgage and determine exactly
how much you can afford. This will enable you to
focus your search and move quickly when you do spot
a dream property.
- Take the time to do some research. Watch the for-sale
ads and speak to agents in your favoured areas to
gauge the level of activity and price movements
and to get a feel of what would constitute a bargain.
- Consider modest homes in well-maintained and established
suburbs. Such properties will show the quickest
growth in value once the market picks up again,
giving you a good return on your investment.
- Don’t hesitate to negotiate on price with
builders of new complexes. Ask for discounts or
negotiate luxury upgrades, free landscaping or other
incentives. The same applies to home sellers. If
a seller is keen to sell in a slow market, he may
be willing to compromise on price to speed up the
transaction.
Above all, though, keep the fundamentals in mind.
Don’t buy above your means, even if a lending
institution is keen to grant you a big loan. It certainly
will not be a good investment if you are forced to
sell the property in a hurry because you can’t
keep up your monthly bond repayments.
In fact, you should always factor in a safety margin
to make provision for possible interest rate increases
in future – even if rates look stable now.
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3.
Sellers:
Mind your language!
Many jokes do the rounds about what
the jargon in real estate advertising really means.
But a Canadian study has now shown that the choice of
words in an ad really does influence selling price as
well as the time it takes to sell a property.
The research was conducted by Professor Paul Anglin
of the University of Guelph in Ontario, who studied
the response to about 20 000 listings over a period
of three years.
He found that if you want to cut selling time in half
(compared to the average for your area), you should
advertise your property as a “handyman’s
special” – the downside being that you must
then expect the selling price to be around 30 percent
lower than the area average.
On the other hand the term “beautiful” in
ads reduces selling time by an average of 15 percent,
while increasing the selling price by around five percent.
The caveat here is that the strategy only works if the
advertised property comes up to scratch and really deserves
the description.
Surprisingly, the term “landscaping” has
the best overall effect: Selling time is reduced by
20 percent and selling price increased by six percent.
The survey also showed that if you advertise your property
as “good value”, sellers will take you at
your word. The description shaves five percent off the
average selling time, in return for five percent off
the average selling price.
Buyers also like homes in “move-in condition”,
which sell 12 percent faster, and “starter homes”,
which sell nine percent faster.
They don’t, however, respond sympathetically to
emotional appeals such as the fact that the owner is
moving, and if you state you are “motivated to
sell” you can expect your property to actually
stay on the market up to 30 percent longer than average,
while the selling price drops by eight percent.
Homes described as “vacant” also sell at
eight percent lass than the average and the words “rental
property” add a whopping 60 percent to the sale
time while taking nine percent off the average price.
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4.
Don’t skimp
on your HOC – it’s just not worth the risk
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The recent high tides and monster
waves in KwaZulu-Natal have once again focused attention
on how suddenly and quickly properties can be destroyed
by natural disasters – and leave uninsured or underinsured
homeowners exposed to huge financial damage.
It underlines the necessity of making sure yourself
that your home is insured at full replacement cost,
at all times, and not to assume that when your bank
adjusts your Home Owners’ Cover (HOC) and premium
from time to time, such adjustments will necessarily
take continually rising building costs into account.
If they do not, and you are thus under-insured in
the event of a catastrophe such as a flood or a fire
that razes your home to the ground, your insurance
policy will not pay out enough to replace the structure,
leaving you heavily out of pocket and / or with a
smaller home.
And if the structure suffers partial damage, your
policy will also only pay out a pro rata amount -
in other words, if you are 30 percent under-insured,
the insurer will only pay out 70 percent of the claim.
To calculate the replacement value of your home, industry
experts say, it is a good idea not to rely solely
on the convenient calculators that many insurers provide
because these are as subjective as the person who
punches in the information. Basing replacement cost
on current market value is also a dicey move – the
cost of rebuilding your house can be significantly
higher than the price for which you could sell it.
A better option is to consult a homebuilder and ask
him to estimate how much it would cost at current
prices to build your home from scratch. Speak to your
insurer without delay if there are discrepancies between
your existing cover and the builder’s estimate. And
if the insurer is not willing to increase your cover,
start shopping around for one who will.
Also check what cover if any you enjoy for loss of
use - the amount you will be entitled to in case you
have to rent a property while your own home is rebuilt.
Keep in mind that rentals have escalated recently
and calculate whether the amount would cover rental
for a period of at least 24 months. If not, adjust
your cover.
And, finally, don’t be a cheapskate – look for the
best possible cover for your money, not the lowest
possible premiums.
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| 5.
Farewell to a
lion-hearted leader |
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Chris Cloete, co-owner of the Chas
Everitt International franchise in the Northern Suburbs
of Cape Town, was tragically killed crossing a road
after a gym session close to his offices in Tyger Valley
on Monday 12 March 2007. Chris is survived by his wife
Rierie, son Chris and daughters Lisa Marie and Yvonne.
Born and bred in Ermelo, Mpumalanga, Chris attended
Wits, studying mining engineering, after which he completed
his MBL at Unisa and an executive development programme
at Michigan University in the US.
After four years at Billiton, where he took care of
the marketing and development of new mines, he joined
Sasol as a mine manager in 1978. After just two
years he became deputy GM of the group and shortly thereafter
was promoted to the position of GM Mining, where he
headed up the building of Secunda Collieries, the
world’s largest underground mining complex. At
this time he was responsible for some 12 000 people
and a turnover of R3bn.
Chris ended his 18-year career at Sasol as MD Mining
and then joined an architect friend in a new venture
in Industrial property development in Namibia. He subsequently
developed a forest farm and opened an international
consulting practice, Powerhouse Consultation, that consulted
to Billiton, Price Forbes, Bilboa and multinational
Tractebel.
Chris was then contracted to do a turnaround and repositioning
for the University of Pretoria's Business School, where
he was appointed GM, before he decided to leave the
corporate environment and, together with his close friend
Charl Louw, purchase the Chas Everitt Northern Suburbs franchise.
This was in 2004 and he subsequently also became a partner
in the Chas Everitt Stellenbosch operation.
In his own words, Chris was in love with the real estate
business, and his passion and commitment to his partners
and agents as well as his beloved family was well known
to all whose lives he touched. His zest for life, irrepressible
sense of humour, eternal enthusiasm, belief in our country
and ability to see the silver lining in any cloud will
ensure that he lives on in our hearts forever.
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