Link: http://www.property24.com

The one factor buyers and sellers always have to keep in mind when entering into a property deal is the price.

Buyers want it to be lower and sellers want it to be higher. Somewhere there needs to be a compromise by both parties, but where exactly is this point?

The latest statistics from First National Bank show that 80% of sellers still have to drop their asking prices in order to achieve a sale. “And the average drop is around 12%, which means that most sellers are quite seriously out of step with what buyers are actually willing or able to pay,” says Berry Everitt, CEO of the Chas Everitt International property group.

“Such sellers will usually argue that prospective buyers are quite at liberty to make lower offers, but the fact is that serious buyers will usually not make any offer at all on a home they consider to be overpriced, especially if there are many properties on the market for them to choose from.

“Others will shy away from making a lower offer because they don’t want to offend the seller, even if they really like the property.

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Link: http://www.property24.com

In view of planning for retirement, it is advisable for older people to downscale as soon as possible and not wait until a better price for your current property can be achieved.

Not only is it cheaper to buy and maintain a smaller property, but properties in retirement villages are also not getting cheaper.

“It is true that there has as yet been only a small rise in prices, but the number of houses sold has now risen year-on-year (y/y) by 20%,” said Lanice Steward, MD of the Cape agency Anne Porter Knight Frank (APKF).

“As the latest FNB survey has shown, in the second quarter of 2010 Western Cape house price inflation accelerated to 13,8% y/y – up from 8,7% in the first quarter, with a quarter-on-quarter (q/q) growth rate accelerating marginally from 3,9% in quarter one to 4,2% in quarter two.”

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Link: http://www.property24.com

A law expert on Thursday decried the South African practice to continue to allow residential and commercial property to be sold at rock-bottom prices on the basis of a civil judgment against the owner.

No one benefits except the "seasoned bargain hunters" who attend the auctions where these properties go under the hammer, says Jenny Smit, senior associate at Werksmans Attorneys.

"It's curious that a procedure as anachronistic as that relating to the sale and execution of immovable property still exists," says Smit, referring to the procedure for prosecuting civil claims in the High Court.

Currently, only Sheriffs of the High Court may conduct sales in execution, she says. This severely limits the debtor's ability to have a hand in increasing the potential value to be realised.

"Another party to suffer the misfortune of this regulation is the execution creditor. Often, the money raised is not enough to cover the judgment debt in full."

Smit says that the Sheriffs-only rule for conducting sales of execution, usually by auction, has several price-inhibiting effects.

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Link: http://www.property24.com

With many bond applicants held back by the strict National Credit Act (NCA) rulings, some will start looking for more easily accessed finance.

If they do this they must act with extreme care, says Lanice Steward, MD of Anne Porter Knight Frank (APKF), a Cape Peninsula estate agency.

“Caveat Emptor – let the buyer beware – has always been a sound principle in any sale negotiation, but it is never more relevant than when it applies to the raising of finance to purchase,” said Steward.

Suspicion, she said, should always be aroused in the buyer’s mind if and when exceptionally good financial packages become available for the home buyer. The question should always be asked: “How and why is this organisation able to undercut the long established banks and finance houses, whose offerings tend to be very similar?”

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Link: http://www.property24.com

Banks may well have started opening their mortgage lending taps again but the average homebuyer still needs to fork out a cash deposit of close to 20% of the property’s purchase price.

Latest data from mortgage originator ooba show that in July the average deposit required by the major banks was 19,4%, translating into a relatively hefty cash pile of R165 260 if ooba’s current average house price of R850 763 is used as a benchmark.

Although banks’ deposit requirements have declined over the past 12 months, from an average 23,6% to the current 19,4%, these levels are still nowhere near the 0% to 5% deposits typically required by banks during the boom years from 2004 to 2008.

Absa Home Loans Managing Executive Luthando Vutula said earlier this week at a media briefing in Johannesburg that the bank still wants to encourage prospective homebuyers to save for a deposit. Absa, who is the biggest player in the South African home loan sector with a market share of 31% and a total mortgage book of R308 billion, earlier this year still required deposits of at least 15% on most transactions.

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