Your agent has the answers to many property questions
Category RealADVICE
Despite the growing consumer interest in property investment, most South Africans who own property will deal with estate agents on only a handful of occasions, when they actually buy or sell a home.
However, says Gerhard Kotzé, MD of the RealNet estate agency group, owners should aim to make trusted "consultants" out of their agents and interact with them much more frequently.
"A qualified professional agent giving unbiased and disinterested advice, free from any pressure to sell or upgrade to a more expensive property, is the right person to help owners make decisions which will protect and improve the value of their investment."
For example, he says, a property professional can help you to resolve the common question of whether to move to a new home when you need more space or stay put and improve or extend your current property.
"Adding on may seem like the logical answer when the disruption of moving is taken into account, on top of the costs of selling and relocating. But it may not be the most financially prudent decision if the cost of the additions would lift the value of the home beyond the current price range of most other properties in the area.
"This is sometimes called overcapitalisation and is risky because it means the property owner would probably lose money if a sale suddenly became necessary for an unforeseen reason like a job loss. In fact, most owners should really only consider extensive alterations if they are pretty certain they will be staying on in their home for at least the next five to 10 years."
Kotzé says that before making a decision about additions, you should ask a professional agent to examine your plans and cost estimates and then compare the value of the property with the recent sale prices of other homes in the area to see how much you might be able to spend before hitting the price ceiling for your area.
"This amount is likely to increase when the demand from potential buyers exceeds the supply of homes for sale, and prices are on a healthy upward trend, but will of course decrease if there is an oversupply of properties. This will make it more prudent to move than to alter an existing home, and that helps to explain why (according to StatsSA) the value of residential additions and alterations fell by around 33% in the 12 months to the end of February this year compared to the previous 12 months, while the number of home sales was rocketing."
He notes that with interest rates currently at 50-year lows, many homeowners are probably also thinking of fixing their home loan interest rate or perhaps refinancing their property to release sleeping equity. "And once again, a professional estate agent will have access to a wide range of information which will make it easier to decide the best course of action.
"What is more, homeowners should not hesitate to approach agents for this type of advice, because good agents are not only interested in property sales and purchases, but in building long-term relationships with their clients."
Despite the growing consumer interest in property investment, most South Africans who own property will deal with estate agents on only a handful of occasions, when they actually buy or sell a home.
However, says Gerhard Kotzé, MD of the RealNet estate agency group, owners should aim to make trusted "consultants" out of their agents and interact with them much more frequently.
"A qualified professional agent giving unbiased and disinterested advice, free from any pressure to sell or upgrade to a more expensive property, is the right person to help owners make decisions which will protect and improve the value of their investment."
For example, he says, a property professional can help you to resolve the common question of whether to move to a new home when you need more space or stay put and improve or extend your current property.
"Adding on may seem like the logical answer when the disruption of moving is taken into account, on top of the costs of selling and relocating. But it may not be the most financially prudent decision if the cost of the additions would lift the value of the home beyond the current price range of most other properties in the area.
"This is sometimes called overcapitalisation and is risky because it means the property owner would probably lose money if a sale suddenly became necessary for an unforeseen reason like a job loss. In fact, most owners should really only consider extensive alterations if they are pretty certain they will be staying on in their home for at least the next five to 10 years."
Kotzé says that before making a decision about additions, you should ask a professional agent to examine your plans and cost estimates and then compare the value of the property with the recent sale prices of other homes in the area to see how much you might be able to spend before hitting the price ceiling for your area.
"This amount is likely to increase when the demand from potential buyers exceeds the supply of homes for sale, and prices are on a healthy upward trend, but will of course decrease if there is an oversupply of properties. This will make it more prudent to move than to alter an existing home, and that helps to explain why (according to StatsSA) the value of residential additions and alterations fell by around 33% in the 12 months to the end of February this year compared to the previous 12 months, while the number of home sales was rocketing."
He notes that with interest rates currently at 50-year lows, many homeowners are probably also thinking of fixing their home loan interest rate or perhaps refinancing their property to release sleeping equity. "And once again, a professional estate agent will have access to a wide range of information which will make it easier to decide the best course of action.
"What is more, homeowners should not hesitate to approach agents for this type of advice, because good agents are not only interested in property sales and purchases, but in building long-term relationships with their clients."
Author: RealNet
