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P R O P E R T Y CONSUMERS will have to be selective about what they spend their money on and how far they travel to shop for goods PICTURE: IGOR KARIMOV/UNSPLASH
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Planning on buying your first home? Avoid these 3 mistakes
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UYING A home is one of the biggest inancial commitments most people will make. It is therefore vital to be aware of the potholes you need to avoid, says Gerhard Kotzé, the managing director of the RealNet estate agency group. Three mistakes you should not make: 1. Rushing into a purchase Buyers should always avoid buying in a rush, especially in a town or area they do not know well. Kotzé say research is essential, so even if one does not have young children, for example, they should check the quality of the schools, as well as the medical facilities, the crime rate, shopping areas, and entertainment facilities – anything that
could affect the resale potential of their home. 2. Opting to not get pre-qualified for a home loan Not taking the time to pre-qualify for a home loan before looking at properties for sale is a mistake. “You really need to go through this process with a reputable mortgage originator so you are very clear about what you can afford, and don’t waste any time looking at homes that are out of your price range. In addition, being pre-qualified for a loan will give the home seller confidence that you will be able to finance your purchase.” 3. Putting all your money into the purchase Kotzé says buyers must avoid putting all their cash
or savings into their home purchase. “While lenders are obviously more likely to approve a loan with a 10% or 20% deposit, it is prudent for buyers to keep some cash in reserve for unexpected moving expenses and emergencies, as well as the legal, bond and transfer costs which, in most cases, have to be paid in cash. “Rather try to obtain the maximum home loan you are comfortably able to afford, leaving some leeway for possible future interest rate increases. “And if you do have any spare cash left after the move, you can always pay it straight into your home loan account to immediately reduce the principal amount and increase your home equity.”
STEEP PETROL PRICES SET TO TO KEEP PEOPLE AWAY FROM BIG SHOPPING CENTRES THE RISING petrol price is expected to see consumers being more selective on what they spend their money on and how far they travel to buy goods. This could see them staying away from large shopping centres. FNB commercial property economist John Loos says it is well-known that the cumulative
WHEN BUYING a home, avoid these mistakes. PICTURE: ALENA DARMEL/PEXELS
fuel price increase has added significantly to overall consumer price inflation, and this week’s increase sustains the pressure. And because people cannot avoid buying petrol, they will have to reduce their spending on non-essential items and delay some low-frequency purchases.
What is a bank guarantee when buying a property? And how can I get one?
“We believe that this impact could be felt more in larger super-regional and regional shopping centres, which are more significantly focused on such purchases, including entertainment, eating out, and clothing and footwear retail. “Smaller convenience and neighbourhood centres focused more heavily on essential food and grocery shopping are likely to feel this indirect impact of fuel inflation to a lesser degree.”
A BANK guarantee means the seller will be protected by the bank if the buyer if unable to meet their contractual commitments.
ONE OF the most important matters that buyers are in the dark about is how to protect themselves when putting down a deposit on a house – or more specifically the benefits of a bank guarantee. A bank guarantee, says Jackie Smith, the head of Buyers Trust, a division of the ooba Group is a “financial backstop” offered by a lending institution. In the case of a property deposit, the bank issues a guarantee to the seller that the buyer has sufficient funds to meet the deposit amount.” This means that the seller will be protected by the bank if the buyer
is not able to meet their contractual commitment in terms of a deposit. How to secure a bank guarantee A deposit is generally paid by a buyer to a seller within an agreed period – after the offer to purchase on the property has been accepted. Smith explains that there are several ways in which the payment of the deposit can be achieved: 1. Buyers can choose to pay the deposit into their estate agent’s trust account, or the transferring attorney’s trust account. 2. They can also arrange with their bank for the issue of a guarantee to the transferring attorney, but this option generally comes with lots of paperwork and a hefty fee from the bank. 3. Choosing the likes of a third-party financial services provider like Buyers Trust that facilitates the investment of the deposit into a bank account in the buyer’s name and simultaneously issues a guarantee to the transferring attorney.
A FORECAST ON WHAT LIES AHEAD FOR THE CONSTRUCTION SECTOR
THE FUTURE of the construction industry will rely heavily on the global climate and local socio-economic factors. PICTURE: PHOTOMIX/PIXABAY
THE FUTURE of the construction industry will rely heavily on the global climate as well as several localised socio-economic forces, says Mark Snow, the audit partner at Mazars in South Africa. This is in tandem with the political will to release infrastructural projects in future. “With the global move from in-office working to remote-work culture, the great reduction in office space requirements will serve as a compelling force for property and construction companies to pivot and adapt their growth strategies and operational process to thrive in the ‘new normal’. “On the retail front, where digitisation has been felt acutely, the move away from brick-and-mortar retail into the e-commerce space has necessitated a new way of thinking about the spatial needs of civil society and what this means for construction.” In health care, an industry in which there has been a definitive upswing lies a myriad opportunities to innovate and devise new ways of finding solutions that can be solved by the construction industry, Snow says, adding that the increased demand for products in the pharmaceutical, technological and
logistical sectors could also provide the construction industry with the boost it needs to regain its pre-Covid stature as an essential contributor to the GDP of the country. “Labour-related issues will continue to come under close scrutiny with the risk of community unrest and tension still bubbling under the surface. “Taking a proactive stance to managing these issues will become the key to minimising disruption and maintaining stable profit margins.” In terms of emerging technology and its rapid rate of advancement, he believes that the increasing risk of cyberattacks and the resulting loss of intellectual property will mean that construction companies need to keep a key eye on cybersecurity. The use of new technologies such as BIM modelling and the use of drones will provide the potential to enhance efficiency across the board. “Overall, the major challenge that firms across the sector will face relate to the selection, pricing and execution of projects in the most efficient and profitable way possible, within a relatively unstable global climate.”
