Online websites like www.privateproperty.co.za are an excellent resource for those wanting to sell their property privately and is one that we as both buyers and sellers of homes in the Durban KwaZulu Natal region use on a regular basis.

After all why pay agents huge commissions? However selling a home can be stressful so you better know what you doing !

Selling or Buying property privately can be very rewarding and is the way we like to do business but it does have its challenges especially in this current market where everything seems to happen slowly. What is it with everyone these days? It seems with everything you do these days, there is a problem… not at least is with our banks and getting a home loan.

We are finding that banks are extremely slow at processing applications and asking for lots and lots of supporting docs sometimes more than once. It seems they want to be spoon fed more than ever. Me personally I work with a bond originator he is a star, he is the most important guy in the transaction, he is the money man and without the money we have no deal. Next in line is my attorneys they are also important but not as important as my bond originator. So my advice to any seller don’t hassle too much about selling privately without an estate agent, worry more about finding a good bond originator to get your buyer his loan and a good attorney to do the legal work swiftly.

The irony however is that most estate agents have these people on board their teams and they are the go betweens. By selling your property privately you become the coordinator. Private Property does however have recommended Attorneys and Bond originators I suggest you check them out sooner rather than later as they are key to you selling your property privately.

Having bought and sold many many properties thats my advice, you can save money selling privately but be prepared to do some work as you effectively become the agent.

We are always looking for good value properties to buy in and around Durban so if you have anything to sell and are negotiable on your price please feel free to contact me here and send me your private property link. I cant promise to buy everyones property but I will sure have a good look to see it it will work for us in our current investment strategy.

If you cancel your homeloan/bond within the first 2 years of your mortage you will be liable to pay penalty interest of about 1% of the outstanding bond amount. If you owe R500 000 that’s about R5000 in early cancellation penalty fees and on a R1 million bond thats R10 000 in penalties that you will need to pay which will come off your proceeds of the sale.

This cost can normally be avoided by giving the bank 90 days notice of your intent to cancel the bond. So what this means is that you need to fax a written letter or email to your bank before you even put your home on the market. Most estate agents will not tell you this but it is an important step to take when selling your property.

The 90-day notice period will only waived under the following conditions:

1. If its a deceased estate.
2. If you are been sequestrated.
3. If you are buying a new property and taking out a new bond is with the same bank.

Many sellers get confused thinking that by giving the bank 90 days notice that they are cancelling their bond in 90 days. This is NOT the case, in that if your house does not sell within that period you just need to renew your intent letter but your bond will not be cancelled until such time as the conveyancers request for cancellation figures from your bank and the conveyancers will only do this once your property has been conclusively sold and they have received all the necessary guarantees.

Click  here for a free copy of such a letter which you should send to your bank to notify them of your intent to cancel your home loan.

Many sellers and estate agents are asking themselves when will the property market start improving or at least get better ?

The reality is the demand for property at the moment is currently very low, and if there are no buyers and a large supply of homes for sale, prices will only decline. Thats what we are currently seeing, sellers are clinging onto boom time expectations and are not pricing their homes correctly based on current market conditions.

The question then asked is why is the demand for property so low?  To answer this question we need to go back and look at what created the boom.

Back in 2004 the South African Reserve Bank dropped interest rates by a massive 5.5%, thereby increasing the affordability of average South Africans to buy houses. At the time prime was 11.5%. Add in that the local banks and mortgage originators where hell bent on getting as much of the mortgage loan action as possible, we thereby had a situation whereby banks where lending to anyone who had  half a decent credit record and would sweeten the deal by offering as much as 2% below prime to those who qualified. Effectively a buyer could have walked away with a home loan at 9.5%. The banks where so keen to lend against property because at the time property growth as at a crazy 43% per year..!  How could they lose? House prices where soaring and this allowed homeowners to refinance their homes and remodel or spend the cash on furniture, holidays you name it.

But all good things must come to an end. The government introduced the National Credit Act (NCA) to make the banks more accountable to whom they lent money to, in addition the reserve bank started raising interest rates in mid 2006 due to fears that house prices and inflation where spiralling out of control. They hiked rates up from a low of 10.5% to a peak of 15.5% in 2008. This process slowly put the brakes on the house buying frenzy we had just witnessed.

Currently the reserve bank have dropped interest rates again by 5% with prime as of  Aug 09 now back down to 10.5%. However where things are now different is that we are in a global recession and our banks are having difficult times getting capital to lend their clients. As a result the banks have initiated strict lending criteria with them requiring as much as 30% deposits from buyers. Add in transfer duty and fees and a potential buyer may need as much as a 40% down payment to purchase your property.

These policies have put massive pressure on buyers and as a result the pool of buyers who have this sort of money has dried up, resulting in few buyers and many sellers. The net result is falling property prices.

The other problem faced is that given we are in a recession, is that people are losing jobs, so many middle class South Africans are just trying to hang onto their jobs and pay down on debt and are not looking towards taking on any new big ticket purchases such as property.

Even with low interest rates the demand for property is low and will remain low up until such time as all the banks start lending again with 100% bonds to buyers we can expect prices to remain depressed until at least end of 2010 or early 2011.

So any potential seller would be advised to sell now if they are under financial pressure because demand and prices are not expected to get better anytime soon. If you are in a position to ride the storm one would do best in holding onto your property until 2011/12 before selling. When prices are set to start improving. ]]> http://www.propertytribe.co.za/index.php/when-will-the-property-market-improve/72/feed/ 0