The show must go on when selling homes

While virtual tours have proved popular, most buyers still want to pay a physical visit to a home to get a feel for it before they purchase

Q: WE ARE selling our home and wondering whether it is really worth it to have a show day when we can just show buyers via a virtual tour.

A: Show houses are still very relevant in the sale of property. By necessity, virtual tours were honed during lockdown to enable us to keep servicing our clients and they were well-received by the public as an alternative for viewing properties.

They will continue to be useful in the marketing of property, but just as an add-on to existing protocol, because the fact remains that the majority of home buyers – by some margin – still rely on the opportunity to physically visit a house to get a feel for it before they commit to buying.

And show houses are also the best way to limit the inconvenience for sellers as it can be stressful and challenging to juggle work and family with having to keep the house pristine and have people traipsing through it at dinner time.

Show houses have always been an integral part of our commitment and superior service agreement to our sellers and, with our extensive database of approved buyers, they are still a very efficient means to showcase and sell property.

Attracting preferred buyers to our properties creates a strong platform from which we can equate a fair field of competitiveness among interested buyers and, at the same time, present our sellers with serious, qualified potential purchasers. – Cobus Odendaal, chief executive of Lew Geffen Sotheby’s International Realty in Johannesburg and Randburg

Q: I want to apply for a home loan but am worried about my credit score not being good enough. I know I can afford the repayments. How can I make sure my score is good enough and, if it is not, how can I improve it?

A: The score range in South Africa is 0 to 999, where 0 is the worst you could have and 999 is the best.

Ideally, you would like to be at the highest possible score, however, very few people (if any) have a score of 999.

For the best chance of a home loan approval, with the best possible interest rate, you want your credit score to be somewhere between 614 and 999. Most people who are considered to have good credit have a score between these ranges.

The level of debt you have can significantly influence your credit score. Having some debt is better for your credit score than having none at all. If you have debt, and are paying it back every month and on time, it shows you are reliable and capable of paying back debt, which increases your score.

While having no debt is not good, taking out too much debt is worse. Being blacklisted by a creditor for any reason will leave a long-lasting stain on your credit record that is difficult to remove.

Missing payments or not paying on time – even if you make the payment up the next month – will count against your credit score. Schedule any payments as debit orders or set reminders to pay on time, every time.

Making too many credit applications, or too much enquiry activity, in a short period of time could also affect your score negatively. Try to wait a month before applying to a different financial institution, if your application was rejected.

It is fairly easy to check your own credit score and most places allow you to check your score once a month for free. Checking your score is considered a soft inquiry and won’t affect your credit.

There are four main credit bureaus where you can check your score: Experian, TransUnion, Compuscan and XDS. Some banks also allow you to check your credit status on their banking apps. – Adrian Goslett, regional director and chief executive of Re/Max of Southern Africa

Q: How important is location really if we are only buying a starter home and won’t be in it forever?

A: Many buyers mistakenly believe area is not that important, as long as it is convenient for them. This is because they think they will more than likely move to a different home in a couple of years’ time.

The location of a home remains critical because, whenever you do decide to move, the price that you can get for your current home will significantly affect the price that you can afford for a new one.

So, to give yourself the best start on the property ladder, when you buy your first home you should aim for the most desirable area and best position in that area that you can afford.

If you have a choice between two areas that are close to work, for example, you should pick the one where there is most demand and which has shown the best price growth in recent years.

You should do this even if it means that you have to buy a slightly smaller or older home to be able to afford to live there. – Gerhard Kotzé, managing director of the RealNet estate agency group

Q: What should I do to get the best interest rate possible on my home loan?

A: Here are three tips for reducing your interest rate: 1 Go for a shorter loan period: Your loan repayment period is one of the primary factors responsible for the interest you will be paying. Longer loan periods, say 25 to 30 years, will cut down the monthly instalment amount; shorter loan periods, say 10 to 15 years, will help reduce the overall interest payable. 2 Compare interest rates online: It is critical that you do proper research on loan products and compare rates before deciding on a particular product or lender. There are several third-party websites that can give you a clearer picture of the rates and other costs charged by different lenders. 3 Pay more as a down payment: Most banks and other financial institutions finance 75% to 90% of the total value of the property. You are required to contribute 10% to 25% of the remaining cost of the property.

However, instead of paying the least, it’s better to contribute more from your pocket as a down payment. The higher the amount you pay initially, the lower the loan amount is, which directly reduces the interest you must pay as well. – Shaun Rademeyer, chief executive at MultiNET Home Loans

GETTING the best interest rate is vital when applying for a home loan. PICTURE: SUKHJINDER/PIXAHIVE