Benoni Home Owners News

Sellers Beware!

Article By Lea Jacobs 07 Oct 2011

The dangers of using more than one agent to sell a property were highlighted once again recently when the appeals court in Bloemfontein found that the agent who had purportedly sold a Durban North home was not the effective cause of sale. Who cares, you may ask? In this case, the sellers most certainly experienced a little sellers’ remorse by being forced to pay a whopping R230 000 plus interest and legal fees to the agency who had first introduced the buyer to the property; this over and above what they had already paid in commission to the agent who subsequently got the buyer to put pen to paper.

Numerous estate agents and sellers have fought the effective cause of sale battle in South African courts for years and the outcome of the various cases has left a great deal of confusion in its wake. Essentially this is not because the law is hazy on the topic, but that each case is different and as such is judged on its own merits.

For example, the courts have found that just because an agent initially showed an interested party a property that they ended up buying does not necessarily make that agent the effective cause of sale. However, the courts usually find that this is the case unless there are extenuating circumstances. Sellers therefore need to be extremely careful as who views the property with which agent.

It is easy to become confused as to who introduced a buyer to a property, particularly if more than one agency is marketing the home. Very often, buyers will not mention that they have already viewed the property unless asked. Unscrupulous agents often won’t bother mentioning the fact either, preferring to pocket money that, legally-speaking, they haven’t rightfully earned. Buyers also often incorrectly assume that the agent is working for them and that they have the right to choose which agent they will deal with. This may be true if they have appointed an agent to find them a property that they have not seen before with a different agent. That said, any good agent will have a clause in their sale’s contract that confirms that the buyer has not viewed the property with another party.

So where does this leave the seller? Usually out-of-pocket. In many cases the seller is left holding the bag and has to pay the full commission to both the agent who sold the property as well as the one who first introduced the buyer. There is of course legal recourse against the buyer, but litigation is expensive and owing to the amounts involved, more often than not involves the costs of a High Court trial.

The easiest and perhaps the safest option available is for sellers to only employ one agent/agency to do the job. If multiple agents are attempting to sell the property then the seller needs to ascertain which agent brought which buyer around. It goes without saying that sellers should never attempt to enter a private deal with a buyer who has previously seen the property with an agent.

If a seller becomes aware that a buyer has already seen the property with another agent, they should inform both the buyer and the new agent that they will not enter into a sales agreement without letting the agent who initially showed the property know. While the buyer and the agent do not stand to lose anything as a result of their actions – the chances that the seller will lose a large sum of money are great.

Times are tough and buyers are pretty thin on the ground. Unlike the boom times when there were high volumes of buyers out there the current slower market has made it far easier for sellers to keep tabs on who is coming into their homes. To simplify the matter, sellers using multiple agents should ask them all to provide feedback as to who has viewed the property. This easy exercise will ensure that sellers are not putting themselves at risk and could potentially save them a fortune in the process.

Source: www.privateproperty.co.za

Please find attached our latest on
residential emigration selling, as surveyed in the 2^nd quarter FNB
Estate Agent Survey.

Since the 1st quarter of 2008, when we
began to ask agents surveyed in the FNB Estate Agent Survey to provide us with
estimates as to the reasons that people sell homes, emigration selling has
never been lower than in 2011, when expressed as a percentage of total
residential selling.

From a peak of 20% in the 3rd quarter of
2008, the percentage of residential sellers believed to be emigrating has
declined to 4% for both the 1st and 2nd quarters of 2011.

Could it be a relatively positive
sentiment towards South Africa from its inhabitants? Difficult to say. A
well-organised 2010 World Cup may have helped, but the ongoing crime problem
may not help sentiment. Certainly a relative strong rand performance improves
the affordability of emigration.

But as we mentioned in our foreign buying
note about a week ago, flows of investments and people between countries has to
do with “relative sentiment or environment changes” between countries. So,
while absolute confidence in SA’s future may or may not have changed
noticeably, there has arguably been a significant drop in the confidence levels
regarding many European countries, including the UK, due to serious systemic
and economic troubles in recent years, while the US’ economic fortunes have
also deteriorated significantly.

Sentiment aside, high unemployment rates
in many developed countries probably mean that they aren’t nearly as welcoming
to immigrants from the likes of South Africa, compared to a few years ago in
the global boom years, and even where they are welcoming of immigrants the job
prospects just aren’t as promising as a few years ago.

As a possible indicator of South African
skills returning from abroad, we ask agents to estimate the percentage of
expats buying property in South Africa. This is not perfect, as expats buying
property in SA don’t always do so with a view to returning permanently.
Nevertheless, we assume that this is a partial indicator of skills returning or
intending to return. The estimated percentage of expats buying property appears
to have been relatively stable around 2-3% since mid-2009. This implies that
the gap between emigration sellers at 4% of selling, and expat buyers at 2% of
total buying, appears to have narrowed since 2009/10, suggesting that the net
skilled labour outflow may have subsided in 2011.

A slower skills drain in tough economic
times may well provide an opportunity for employers to boost their labour force
skills levels. While our own economy is also showing signs of weakening along
with the global economy, and the private sector may not have a short term need
for what have possibly become more abundant skills in SA, for a non-cyclical
sector such as government and its parastatals, such tough economic times are
arguably a good opportunity to bolster the quality of skills,  and with it
service and infrastructure delivery. In 2009 and 2010, indeed, the public
sector was largely responsible for positive employment growth in the economy,
according to SARB  employment indices.

Kind Regards

John Loos

Strategist

FNB Property Barometer_Emigration Selling Aug 2011

Source FNB

Houses for sale in Dawn park

Dear Reader

Please find
attached the FNB Quarterly Segment House Price and Market Strength Review
There’s no
getting away from the trouble that some of the world’s major developed
economies are in, and the reality that it will affect South Africa.

Europe’s debt
woes have been well publicized. But arguably more significant is what is
currently taking place in the world’s largest economy, the USA. Indeed, that
country did reach an agreement regarding the lifting of its government debt
ceiling. However, the scale of its deficit spending and resultant borrowing has
begun to cast doubt over its credit risk, and Standard and Poor has become the
1st rating agency to downgrade the US sovereign credit rating from its coveted
AAA. This may hamper the US’ ability to borrow as cheaply as it has in future,
and there is a widespread realization that the US Government fiscal deficit
must be reduced, and thus its borrowing needs.

That country’s
potential fiscal stimulus to its economy thus appears reduced, while with its
policy interest rate at virtually zero there is no further scope for interest
rate cuts. All the while, oil prices remain arguably too high for what is also
the world’s largest oil guzzling economy. Unsurprisingly, key global leading
indicators point to a looming economic growth slowdown, with recession risk
very significant.

In South
Africa, we can be thankful that government and the Reserve Bank (SARB) have
managed government finance and monetary policy far more prudently at a macro
level than much of the developed world. A debt crisis thus seems unlikely here,
while the SARB still has some ammunition, in the form of scope to cut interest
rates further, should the need arise.

However, with
our country’s export value at near to one third of gross domestic product
(GDP), we can’t escape global events, and the SARB Leading Indicator, too,
points to an economic growth slowdown.  This economic pressure leads us to
the belief that the low rate of house price growth seen in recent times will
soon dissipate, and that the average house price for 2012 will be unchanged
from the 2011 average house price level. This is assuming no interest rate
hikes through the forecast period, with the SARB delaying any such moves due to
slowing global growth and a resultant weakening of inflationary pressures.

In these
weak economic times, it is small wonder that our analysis of segment house
price trends continues to point back to affordability and basics as being the
key priority. Segmented by major metro area value, our Affordable Area House
Price Index followed by the Middle Income Area Index continue to outperform the
High Income and Top End segments. Holiday towns, driven by this more
non-essential form of buying, continued to show house price decline in the 2nd
quarter, compared to major metros which still showed some small positive house
price growth. Former Black Township house price growth, coming off the lowest
base of all, continued to outperform all of the above segments. Split by Full Title
versus Sectional Title, we find the Full Title segment mildly outperforming the
Sectional Title segment. This, we believe is partly due to better value for
money in the Full Title segment (i.e. the average price of a 3 bedroom Full
Title home remains cheaper than a Sectional Title 3 bedroom unit for instance),
again an affordability matter.

Splitting by
size, we find the best price growth in the small-sized 20-80 square metre
segment. Smaller is better not only from an average price point of view, but also
from the point of view of lowering home running costs, crucial as
municipalities and utilities pile on the rates and tariffs.

And finally
there’s the vacant land market, which FNB’s valuers perceive as the weakest of
all segments by far. Small wonder, when the cost of building a new home is
significantly more expensive than an existing home, and the household sector
remains under significant financial pressure.

Tough financial
times have resulted in a major affordability drive by home buyers. The prospect
of even tougher global economic times looming ahead suggests that it will be
more of the same for the foreseeable future.

Kind regards
John Loos

Strategist

FNB Property Barometer_Segment Price and Market Strength Review _ Q2 2011

Source FNB

Houses for sale in Dawn Park

The last full lunar eclipse was in 2000.

Quite nice to see.

Wasn’t to cold last night furtunately

For those that couldn’t see it here is a shot of the total eclipse.

I will try and upload some shots from the beginning of the eclipse as it progressed.

I would love to see any other Lunar shots if you care to share?

Have a great day

Your friendly real estate agent.

Dear Jaco

I meant to send this e-mail to you a
lot sooner but things have just been exceptionally hectic on our side.  We
would like to take this opportunity to say thank you very much for your
professionalism and all your assistance in selling our home.  We have
never come across an agent such as yourself who was willing to truly go the
extra mile for his clients.  It was an absolute pleasure dealing with
you and we would be happy to recommend your services to anyone wanting to
buy or sell a home.

Thank you once again and we wish you
everything of the very best for the future, may your company grow from strength
to strength because you truly deserve it.

Kind regards

Michael and Belinda Manion

Properties for sale in Rynfield