Property Professional - May/June 2015 by Property Professional

BLACK ECONOMIC EMPOWERMENT I N P R O P E RT Y

COMMERCIAL AND RESIDENTIAL PROPERTY CPD

PROTECT YOURSELF AGAINST LIABILITY

MAY/JUNE 2015

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Your career is your future – invest wisely. Today ’s professional individuals understand that a career in real estate is a long-term investment. Whether you are already an estate agent needing to complete the Further Education & Training Certificate in Real Estate (NQF4), or simply want to make a start on this exciting journey, the new Pam Golding Academy provides you with the legally prescribed industr y qualification, giving you best-of-breed real estate education by the leaders in the field. LAUNCHING SOON - As part of a joint venture with Chartall Business College, the Pam Golding Academy is the first public offering of real estate education through an independent real estate company. To register or for further information please contact Jo Raffino – jo.raffino@pamgolding.co.za | www.pamgoldingacademy.co.za

www.pamgolding.co.za | m.pamgolding.co.za

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ED I T O R ’ S N O T E

Dream even bigger this year! See page 38 for details.

EDITOR’S NOTE

THE CREATIVE GROUP 6 Beach Road, Old Castle Brewery Woodstock, 7925 021 447 7130

Progress and change, it seems, go hand in hand. Tony Robbins, life coach and author

www.facebook.com/PropertyProfessional

of a number of self-help books, including Unleash the Power Within and Awaken the

https://twitter.com/Property_Prof

Giant Within, believes that “change is inevitable, while progress is optional”. For Property Professional, it’s time for change, as this will be my last issue as editor. I would like to take this opportunity to thank the wonderful team of writers I have worked with over the years, as well as the production teams and publishers for all their support, dedication and hard work. I would also like to wish you, the property professionals that I have had the opportunity to interact with over the past 10 or more years, all the very best with your careers in real estate. In keeping with the topic of change, empowerment in the real estate industry is one of the big changes that need to be brought about. We speak to some of the transformation leaders in South African real estate to see how they have embraced the concept and overcome the challenges associated with it. We also know that it’s easy to become stale when you have worked in an industry

THE CREATIVE GROUP CEO Shaun Minnie 083 629 6081 shaunminnie@me.com INCOMING EDITOR Terence Steenkamp terence.steenkamp@thecreativegroup.info ADVERTISING SALES Sarah Steadman 082 334 4367 sarah.steadman@thecreativegroup.info

for any length of time, which is why one of the features in this issue gives some good pointers on how to change your tactics when it comes to real estate transactions. Training and ongoing professional development will remain important focus areas for the property industry across the board, and we take a look at tertiary training for the commercial sector. We hope you enjoy our other features in this issue, too, which cover liability issues

ADVERTISING PRODUCTION & SUBSCRIPTIONS Jackie Maritz jackie.maritz@thecreativegroup.info ACCOUNTS & FINANCE Nicolette Lubbe 011 476 6293

and the value that mixed-use developments contribute to the property sector, among others, as well as all the usual news and reviews.

PRINTING Paarl Media

Disclaimer: The publisher of this magazine gives no warranties, guarantees or assurances and makes no representation regarding any goods or services advertised within this edition. © Copyright The Creative Group. All rights reserved. No portion of this publication may be reproduced in any form without prior written consent from the publisher. The publisher is not responsible for any unsolicited material.

MICHELLE FUNKE

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CO N T EN T S

CONTENTS

03 INDUSTRY NEWS 10 EMPOWERMENT: A LONG ROAD 14 THE VALUE PROPOSITIONS OF AN ESTATE AGENT 18 TERTIARY TRAINING CEMENTS PROFESSIONALISM IN THE COMMERCIAL SECTOR 20 MARKET SHARE: PROPERTY FINANCE IN SOUTH AFRICA

22 TAKE THE LEAD 26 CHOOSING THE RIGHT BUSINESS PARTNERS 30 THE ECONOMIC BENEFITS OF MIXED-USE DEVELOPMENT 34 LIABILITY: PREVENTION IS BETTER THAN CURE 40 THE WOES OF THE CPD INITIATIVE

44 PROPERTY PROFESSIONAL: NEW AGENTS ON THE BLOCK 48 FINANCE AND FIGURES: HOW DO HOMELOANS MEASURE UP?

50 PROPERTY PROFESSIONAL: TOP PERFORMING AGENTS 54 TECH TOOLKIT 56 DEVELOPMENT UPDATE 64 WORD ON THE STREET

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INDUSTRY NEWS RICS SPOTLIGHT ON THE FUTURE OF AFRICAN REAL ESTATE

The Royal Institution of Chartered Surveyors

Whereas inflation in East Africa is well within

Brooke-Smith agreed that planning was

(RICS) Africa 2015 summit in Johannesburg

target and the Kenyan shilling is stable, with 6%

a balancing act, citing the increasing

brought together professionals, academics and

growth expected in 2015, inflation in Nigeria

neighbourhood approach to planning and

industry leaders to examine the future vision for

is expected to accelerate from the middle of

commercialism, even in developed countries

Africa’s real estate market. The well-attended,

the year, and interest rates are at an all-time

such as Britain. However, she identified a

high-energy event on 25 March was the RICS’s

high, said Kgare. Among the topics examined

“massive skills gap” in two areas: there were

first international conference on the continent.

was the economic sustainability of southern

not enough skilled professionals in the built

A common thread was recognition that Africa

Africa. Africa’s economic growth is predicted

environment and there was a lack of data and

was taking its place on the world stage in terms

to outpace all other continents in the next five

information. Co-panellists Nkoane and James

of real estate, infrastructure and construction.

years, with forecasts showing that four of the

Dadson, chief lands officer for the Ghana Land

There was a clear sense that the RICS can play

world’s 10 fastest-growing national economies

Commission, agreed with Nkoane, saying not

an important role in helping countries build

will be on this continent. The panellists looked at

enough young people were being encouraged

consistent standards where needed, albeit with

investment sources, risk and the vital ingredients

to go into the built environment as a career

a focus on collaboration with existing bodies

underpinning ongoing momentum. One

in South Africa. Dadson said since investors

and governments.

conclusion was that commercial property is one

came in primarily to make profit, African

of the darlings of the market in countries such as

governments should position themselves to

Ghana, Kenya and South Africa.

absorb investors in a way that benefits society.

Africa and that it was appropriate to hold the

Urban development, planning and land use

The importance of infrastructure as a core factor

conference in the city with the largest GDP in the

was another topic of discussion. “Spatial

in sustaining growth was another focus area. In

region: “We’ve evolved into a truly international

transformation is an evolutionary animal,” said

a session titled “The African economic engine”,

body. By 2020 the majority of our membership

Johannesburg town planner and manager at

the question was raised: what infrastructure

will be from countries other than the UK. We’re

Ekurhuleni metro, Itumeleng Nkoane. He called

does sub-Saharan Africa need to be truly

seeking to spread best practice wherever we

for a mix of the “first and second” (formal and

globally competitive? Dale Ramsden, founder

find it.” The aim was to share experiences with

informal) economies. “As planners, we cannot

and managing partner at RMP Westport, said

open minds in a spirit of partnership. While

industrialise in the same way as Europe and

the supply and demand mismatch in West

several participants, including emerging-market

America… Living in a sustainable environment is

African countries such as Ghana, Nigeria

economist Kganya Kgare from Stanlib, stressed

not only about living in a beautiful environment,

and Angola created opportunities. While the

the differences between African countries, all

but also about survival. There should be a shift

RICS could be a huge help in drawing up

acknowledged that consistent standards would

from being development controllers to being

standards, African countries often wrongly “get

go a long way to addressing challenges.

development facilitators.”

a bad rap”. “There are planning standards and

RICS President Louise Brooke-Smith said she had been championing RICS partnerships in

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approval processes. You have to be patient and

development in countries such as Nigeria

was also opening up opportunity and

things will happen. Do proper traffic impact

was that it was willing to take the extra risk,

scope. “This continent, Africa, is redefining

studies, don’t take short cuts and embrace the

speakers felt. Chinese companies tended to

itself through its real estate,” Yach said.

community. In these countries, urban planning

take a long-term view based on a model-linking

was a challenge; there was an emotional

infrastructure and real estate development.

attachment to land and a strong demand for

“Standardised valuation practices around Africa will increase transparency,” said Amelia

A-grade real estate. There were opportunities

This risk could be reduced by increased

Beattie, CIO of Stanlib and president of Sapoa,

in the massive retail shortage and limited

transparency and a zero tolerance of corruption

adding that she had seen interest in South

competition, but challenges in that the debt

across the region, the panel agreed. Data

Africa and Africa increasing “significantly”

market needed to be grown, delivery was an

points were also key to de-risking – and this

over the past two to three years. “The capital

issue and there was a lack of qualified rentals.

was an area where the RICS could play a role.

is out there. Our biggest challenge is to find

Strong local partnerships, market knowledge,

Debunking several myths about his continent,

investable opportunities to put the money in.

zero tolerance of corruption and having the

Broll CEO Jonathan Yach, a member of the

The international market is looking for a much

necessary equity in place were identified as key.

RICS, described himself as a “proud Afro-

more significant investment base. We should

optimist”. He said: “Africa is probably one

learn as an industry to work together and

RICS Senior Vice President Amanda Clack

of the most connected of continents, and this

to bring these opportunities to the world.”

noted: “In an ideal world, you start with

is driving growth.” While social instability

In response, RICS CEO Sean Tompkins

planning. In reality, each country in Africa starts

posed a risk throughout Africa, corruption

confirmed that the RICS was “a natural

from a different place.” She also noted that

needed to be dealt with, country by country,

collaborator to make this happen”. The

the absence of adequate infrastructure could

and democratic governance needed to

RICS would be delighted to support the

cost African countries two percentage points

be encouraged. Opportunities lay in the

development of valuation standards and was

in GDP growth a year. One of the reasons

continent’s young, well-informed and rapidly

prepared to host meetings with leaders and

China was successfully investing in infrastructure

urbanised people. Enhanced electrification

stakeholders to agree on common standards.

BETTERBOND REBRANDS AS BETTERLIFE HOME LOANS for its existence, and because a home loan is

group that offers a range of insurance

the foundation of a better life for many people,

solutions specifically designed to empower

we felt that our name should also incorporate

consumers and enhance their lives by

and represent this singular BetterLife vision.”

protecting them against the unexpected.

Started by Rudi Botha in 2001 when mortgage

“We are as passionate about our customers,

origination in South Africa was still in its

our business partners and our staff as we are

infancy, BetterBond Home Loans grew rapidly

about our business,” Rademeyer said. “Our

and in 2003 merged with PA Homeloans

aim is to build a world-class organisation,

BetterBond Home Loans, South Africa’s

to become the country’s second biggest

and we believe this can only be achieved

biggest mortgage origination company, has

originator. Botha’s plans for the company

if we concentrate on building strong and

been renamed BetterLife Home Loans, to

did not end there and, having survived one

sustainable relationships and friendships with

align its brand with its sister companies in

of the world’s worst recessions in decades,

all our stakeholders at the same time as we

the BetterLife Group. “However,” said CEO

today the group encompasses several other

pursue excellence in our business operations.

Shaun Rademeyer, “the renaming process

respected names in the industry and has

We also believe that we have an important

goes much further than just changing the

helped more than one million South Africans

role to play in improving the circumstances

sign over the door. As a group, BetterLife is

realise their dreams of home ownership.

and enabling the dreams of those less

purposefully focused on providing products

fortunate than ourselves, and to this end we

and services to help our customers, partners

Under Rademeyer’s leadership since

have committed to a strong programme of

and staff achieve better lives and make their

2012, BetterLife Home Loans is now also a

investment in many communities and causes

dreams a reality. That is the primary reason

subsidiary of a cohesive financial solutions

nominated by our staff and partners.”

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ESTATE AGENTS MUST ENSURE AUDITS ARE SUBMITTED ON TIME It is the time of the year when many companies

proprietor with a personal bank account,

have just had their financial year end, and

everything that goes through that account

estate agents must keep in mind that their full

will have to be audited.

audits must be submitted within four months of their year-end, said Annette Evans, regional

Centre (FIC) number • the estate agency’s registration number as required by section 26(a), which prohibits the rendering of services

The audit must include:

general manager of IEASA Western Cape.

as an estate agency entity without a registration number.

• all monies received or spent, including It must also be remembered, she said,

monies deposited to trust accounts or

Agents will not be able to renew their

that audits are now to be submitted online

invested in a savings or other interest-

Fidelity Fund Certificates (which means they

bearing account

cannot legally operate as estate agents)

to the EAAB via the auditor’s portal on the body’s website (eaab.org.za/myaudit). The

• all assets and liabilities

unless their full audits are completed and

Estate Agency Affairs Act requires both the

• all financial transactions and the financial

submitted on time, so they must ensure that

agency’s business and trust accounts to be audited. If the agent is operating as a sole

position of the business • the estate agency’s Financial Intelligence

auditors receive the necessary paperwork with enough time to do the audit and submit it.

COMMERCIAL PROPERTY INVESTMENTS DECELERATE AS PROPERTY OWNERS HOLD ON TO VALUE The latest research from Jones Lang LaSalle (JLL)

disinvestment in a high-inflation and weak-

the total value of GLA invested in increased

SA shows that commercial property investment

currency environment, and with fewer options for

during the year. Hence the overall investment

activity slowed in 2014, with the overriding

alternative investments, investors are preferring to

value declined to R8,524/m² in 2014 from

contributing factor being the low supply of

hold the value in property assets.” Key outtakes

R16,145/m² in 2013. Again, the industrial

investment properties. Covering 2011 to 2014,

from the report include:

sector countered the trend, showing an

with specific reference to the office, industrial

improvement in this regard.

and retail sectors, the report focuses primarily on major transactions. The total purchase of office,

• Economic conditions and new developments

declined from 148 to 112.

“The bottom line is that alternative investment options remain few and far between for the longer-term investor”

Zandile Makhoba, head of research, South

Zandile Makhoba, head of research,

industrial and retail properties by listed REITs declined by 43.7% to an estimated R13.8bn. In line with the overall decline in transaction value, the total number of investment transactions

Africa, at JLL, says: “Last year was a prime

South Africa, JLL

example of unfavourable economic conditions:

might slow the pace of investment activity in 2015, but the trend is not likely to be balanced across the sectors. “Looking ahead to 2015, the question is, which property owners are most likely to be more willing to let go of assets in the current climate? The bottom line is that alternative investment options remain few and far between for the longer-term investor,” Makhoba says.

GDP growth slowed, the economy saw credit rating downgrades, currency weakness and

• The industrial sector opposed the general

“From an economic growth perspective, there is

rising inflation all working against investor

downward trend in investment with a notable

little to suggest that conditions would be much

confidence in the economy. Given these

year-on-year increase, even when correcting

more improved from 2014: the Treasury has

conditions, it is not surprising that commercial

for the large sale between Macsteel and

forecast a muted GDP growth of 2.0% for the

Redefine.

2015/16 fiscal year, we are battling to prevent

property investment activity slowed. It is important to note that, more than a shortage of buyers, the

• 2014 also saw very little cross-border

further credit downgrades and the currency

slowdown was mainly as a result of a decline

investment in the commercial property market

continues to struggle, while the turn in oil prices

in willing sellers of commercial properties

in comparison with previous years.

suggests that inflation will remain a concern for

in the prevailing climate. Holding cash is a

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• Total investment value declined; however,

economic activity and investment returns.”

2015/04/23 3:56 PM

PAYING COMMISSION TWICE Sellers are often under a misconception regarding the full extent of the clauses they sign when granting a mandate to an estate agent and also to the real risk of a claim for double commission arising. Imagine you grant Agent X a sole mandate to find a purchaser for your house. X advertises and markets your home and brings various interested prospective purchasers to view it. One such person, Joe Soap, is very attracted to the property and makes various enquiries which X addresses and assists with, but ultimately, when the period of the mandate had lapsed, no binding sale was concluded. You give it all a break and only some 8 months later you decide to re-enter the house on the market, this time granting agent Z the mandate. Joe Soap is still interested and notices that the property is (still) on the market. Having overcome initial reservations, he now concludes a sale agreement via Agent Z for the purchase of the home. The agreement provides for commission to be paid to Agent Z.

As our example above shows, it can sometimes be difficult to ascertain which agent was the effective cause of a sale. Our advice is, therefore, to: • Buyers, to take care where sale agreements require you to indemnify the seller regarding possible double commission claims; • Sellers, to have your mandate agreements checked and to include a properly worded warranty in the agreement to cover risks in this regard; and • Both parties, to contact a property law attorney to discuss your exposure before signing. Contact us at info@stbb.co.za for professional assistance.

The law states that to earn commission, an estate agent must do more than introduce a willing and able buyer to the seller or finalise a binding sale agreement. The agent must also be the effective cause of the sale. In other words, the buyer must be alerted to the fact that the property is on the market by the estate agent’s own marketing efforts and the agent must ultimately facilitate the reaching of agreement between the buyer and seller.

MASTERING THE INTRICACIES OF HOME OWNERSHIP

MORE THAN JUST THE PAPER WORK

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EMPOWERMENT: A LONG ROAD I N T ER M S O F B ROA D - BA S ED B L AC K E CO N O M I C EM P OW ER M EN T, W H AT I S D EL AY I N G T H E T R A N S F O R M AT I O N O F T H E S O U T H A F R I CA N R E A L ES TAT E I N D U S T RY ?

One of the hot topics for 2015 is black economic empowerment (BEE)

and to this end the New Deal Trust sold its BetterLife Group shares and

in the property industry. To date, reformation has been slow and

used the proceeds to establish Leapfrog Property Group while retaining

sluggish, with very few property companies achieving real success.

majority ownership. Leapfrog upper management now comprises

That’s not to say that there aren’t property companies that have – both

founder and chairman Jan le Roux, Bulelani Ngcuka and Bruce Swain

RE/MAX and Leapfrog are at the forefront of empowerment (at least as

(managing director). It was South Africa’s first black-owned real estate

far as black ownership is concerned) in the property industry, but the

group, currently 70% owned by the New Deal trust. So why are there

question must be asked, why have more companies not joined them?

not more companies following on from this empowerment?

Leapfrog was first in empowering the property industry long before it

Bruce Swain said: “Leapfrog’s BEE model was inspired by the anomaly

was mandated to do so. In 2004, BetterBond (now BetterLife Group)

in the property industry. About 90% of the people in South Africa

sold 26% of its share to the New Deal Trust. The objective of the New

are ‘black’ and yet at the same time ±90% of real estate agents are

Deal Trust is black economic empowerment in the real estate industry

‘white’. This is unnatural and unsustainable and has to be addressed.

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“Changes to current legislation and empowerment

by (as explained above). In terms of the current Act,

initiatives have had no particular impact on the

all directors/principals of all real estate agencies

property industry as yet. Steps taken by the EAAB and

must have an NQF5 qualification. This means that

regulations promulgated by the responsible minister,

only fully qualified black practitioners are required

however, did – negatively.

and can take up stakes in these businesses, which is very challenging.

“Blacks, unlike whites, did not grow up with their parents and friends participating actively in a

“The standard of employment qualifications are

property market. This means that when democratic

equally hard to meet – again, there is a scarcity of

government arrived in 1994 blacks did not join the

black property practitioners. Management structures

property industry overnight – and most definitely not

in the vast majority of small, family-owned businesses

successfully; finding one’s feet after decades if not

are nonexistent – the Charter standard is almost

centuries of exclusion is not easy. Black property

impossible to meet.”

practitioners are therefore still ‘emerging’ – and for good reason.

RE/MAX and Z Capital Properties, a prominent black empowerment company, have recently merged,

“The minister and the EAAB at the same time felt

with Z Capital purchasing a 45% ownership interest

the compelling need to raise the entry level into the

in RE/MAX of Southern Africa. A press release

industry and the on-going educational standards

stated that the deal was to position the company for

dramatically. (Education is good, but one does

continued growth in all markets and to introduce black

sometimes get the feeling that something that

ownership at the highest level, after the Department

was not exactly broken is being fixed at a huge

of Human Settlements and the EAAB showed that

cost to many). The result is that, to the best of my

transformation will be high on their agenda in 2015,

knowledge, hundreds if not thousands of black estate

with proposed legislation to ensure transformation.

agents are trading illegally without being registered with the EAAB. It is unfortunate that initiatives to

The merger between RE/MAX and Z Capital

promote transformation came hand in hand with

Properties has shown the real estate industry that

regulations raising the bar at entry level, not to forget

transformation is possible and, along with Leapfrog,

compounding compliancy issues.”

these two companies are pioneering the way for real transformation, without being that isn’t elicited through

And with very little benefit in becoming empowered in

negative legislation, in the industry.

the property industry, this could very well explain why only a handful of property companies have partnered

Amanda Jivhuho, CEO of Z Capital, said: “The

with black economically empowered companies to

legislation has encouraged us to enter into the

affect any real transformation.

property industry on terms that work not just for us but for RE/MAX as well. The landscape of the industry will

There are rumours that the Property Practitioners Bill

certainly start shifting to being more inclusive. This will

will enforce compliance with the Property Charter, but

encourage property ownership that is facilitated by

will this be in a positive way or will it simply breed

agents who are credible and comply with the relevant

bad behaviour in the form of fronting?

bodies such as the EAAB.

So, what are the most pertinent challenges to agencies

“The agency bodies and government have done their

becoming more black economically empowered?

part in changing legislation and setting timelines for

Swain said: “A vast number of estate agencies

organisations to transform. The real task is for real

are small, very often family-owned, businesses.

estate agencies is to find it in themselves to support the

Even if these businesses were able to find black

foundation that has been set.

entrepreneurs interested in taking up equity, no businessman worth his salt would easily purchase

“The RE/MAX-Z Capital Empowerment deal is

a minority stake in a small family-owned business.

certainly leading the pack, with the hope that it will

Qualified black practitioners are very hard to come

encourage other real estate groups to follow suit.

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Ultimately, it is in the best interest of our country and its people who

When asked what the biggest challenges facing industry empowerment

are in this industry. Z Capital is a strategic partner, and like any new

are today, and what benefits there are in empowerment mergers,

relationship, we are working at integrating and ensuring that our

Goslett said: “The greatest challenge is finding partners that carry a

synergies yield the intended benefit of increasing our agent pool from

similar ethos and values and that have the knowledge to add value to

2,000 to 3,000 in the next five years, predominately with the spectrum

the real estate brand. RE/MAX was fortunate to be able to align itself

of our nation being represented in our agents and broker agents.

with a partner that adds a tremendous amount of value and can open doors for the organisation into markets that we previous were unable to

“From a day-to-day perspective, not much change is happening at the

easily enter.

immediate moment. The greatest impact will be in the strategic steering and channelling towards increasing the number of principal-owned

“In 2014 about 65% of RE/MAX buyers were of colour, which is up

estate agencies to come from the previously disadvantaged group.

from the 50% seen in 2013. From an agency perspective, we are able to tap into a rapidly growing demographic in the market. From

“RE/MAX Academy is being set up to assist our agents and learners

an industry perspective, more and more people from disadvantaged

in being put through a world-class training programme. Currently all

backgrounds are able to change their lives and the lives of those

RE/MAX estate agents attend our RE/MAX Accelerate, 100 Days to

around them by becoming part of a growing industry that rewards

Greatness by Brian Buffini course. “Z Capital brings a strategic partnership and a strong business and entrepreneurial mind-set to this merger. For the industry, we want to pioneer and encourage transformation, increase the number of agencies and encourage young people to enter it.” The positive mind-set and shift that the merger has brought to the property industry is one of real empowerment and transformation and, while the merger is still in its infancy, it has shown the property industry that not only can it be done but also that there are real benefits to looking for a strategic fit with a black economically empowered property company. Adrian Goslett, regional director and CEO of RE/MAX, said: “The merger was a result of the increased government involvement within

hard-working individuals.

“The greatest impact will be in the strategic steering and channelling towards increasing the number of principalowned estate agencies to come from the previously disadvantaged group”

the real estate industry and statements from the Department of Human Settlements and the head of the EAAB that they required 10,000 new agents to join the industry from previously

“More and more agents from previously disadvantaged backgrounds will come into the industry and will start opening their own franchises. This will create further employment opportunities for BEE agents and youngergeneration agents who want to make a career out of property sales.” The EAAB has attempted to open the doors of the property industry to younger disadvantaged men and women through its One Learner – One Estate Agency youth programme. In essence their proposed programme is aimed at partnering newly placed intern estate agents into property companies that will in effect mentor and supervise them for 12 months. The end goal of the programme is to enhance economic transformation in the sector and to

Amanda Jivhuho, CEO, Z Capital

disadvantaged backgrounds.

increase the level of representation of youth within the estate agency environment. But has it worked, and has it seen any real uptake by the property industry?

“Transformation is required and RE/MAX has always wanted to

At present the EAAB is still advertising for property companies to

position itself as the leader in the industry. In order to continue to be

leaders over the next 10 to 12 years, we needed to change and be

participants is unknown, but with the programme going live this year

proactive in embracing the way the industry is moving. We are the first

it will be interesting to see how much agency cooperation there is for

of the top six real estate brands to move towards transformation. The

the programme, which seeks to add 10,000 new estate agents to the

merger was in line with our goal to double our agent count over the

current market to speed up economic transformation.

next five years and grow entrepreneurs within the real estate industry. The new agents will be trained and mentored to become successful real

Funding was promised but has not yet materialised. Despite numerous

estate agents and brokers.”

requests for comment, the EAAB declined to comment on the youth

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programme and on the issue of empowerment and

property industry needs a strong and effective

how government and property companies can better

voice. Government needs to communicate with the

work together to build real transformation

industry and can only do that effectively through bodies like Rebosa. We can and will inform/educate

IEASA President Jeanne van Jaarsveld commented

our members as far as practical steps in effecting

on empowerment in the property industry: “The new

transformation are concerned.”

Property Transaction Bill, pending being signed into law this year, certainly will focus on empowerment

When asked about the challenges faced in the

and transformation of the industry. The EAAB has

property industry, Le Roux said: “Current legislation

already got great initiatives in place, sucha as One

and regulation is not helpful. Investors (not

Principal, One Agent, which will bring transformation

practising/qualified as estate agents) can’t take

to the forefront. We expect this

up directorships in real estate

to be rolled out by the EAAB as

companies unless they have

well during the course of 2015. The most beneficial aspect of transformation will be for the big groupings of brands in SA. This could unlock potential partnerships with Department of Human Settlements in housing projects and the like. Transformation can already be seen in small real estate agencies where a number of agents that are employed are black, and this has unlocked very lucrative business for agents servicing the township markets. “The IEASA is very pro and supportive of transformation. It is a founding signatory to the Property Charter and is actively involved in other government bodies, for example, SSETA. Education is the key to transformation. Investment in training and education will be key in creating a sound understanding in the industry. This is where the

“Government needs to communicate with the industry and can only do that effectively through bodies like Rebosa. We can and will inform/ educate our members as far as practical steps in effecting transformation are concerned” Jan le Roux, CE, Rebosa

IEASA will play a vital role in supporting transformation.”

served a one-year internship and have completed NQF4 and 5. “The costs for new entrants are high, namely training, and limited or zero income in the first months. This has now been exacerbated by the launch of Continuing Professional Development at a relatively high cost. The Property Practitioners Bill promises to present even more challenges. Transformation is not easy and ownership is but one element.” While there are many challenges to real transformation in the property industry, there are success stories too, and companies like RE/MAX and Leapfrog have shown that it is possible to effect real economic transformation and benefit in the process. With new legislation on the cards and transformation at the top of the

country’s agenda, property companies would do well The Real Estate Business Owners of South Africa

to follow in these footsteps before the government

(Rebosa) is the leading organisation in the country

introduces more stringent laws or legislation that

that is looking to the future aiding the transformation

is punitive instead of beneficial. Transformation

of the property industry. Said Chief Executive Jan le

and empowerment initiatives are here to stay

Roux: “The future is positive. The property industry

and the property industry needs to participate in

is a huge contributor to the general economy; the

effecting empowerment.

BY ANGELIQUE REDMOND

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THE VALUE PROPOSITIONS OF AN ESTATE AGENT

I N T H E S E CO N D I N S TA L M EN T O F O U R T WO - PA RT S ER I ES, W E S H OW YO U H OW T O I D EN T I F Y T H O S E A S P E C T S O F YO U R B U S I N ES S T H AT F O R M I T S M A J O R S ELLI N G P O I N T S F O R AT T R AC T I N G A N D R E TA I N I N G C LI EN T S

In the first part of this series (Property Professional March/April 2015)

Each of these value propositions clearly defines the attributes that must

we introduced you to the work of Robert Kaplan and David Norton

be delivered if the customer is to be satisfied.

and their term “value propositions”. We explained that “the value proposition statement summarises why a customer should buy a product

Michael Treacy and Fred Wiersema, authors of The Discipline of Market

or use a service” and that “it should convince a potential customer that

Leaders, a 1995 book which discusses competitive business strategies,

one particular product or service will add more value or better solve a

also contributed to the literature regarding value propositions.

problem than other similar offerings”.

According to Treacy and Wiersema there are four types of value propositions, namely:

We now turn to the next question, namely, how do you determine the major value propositions of your business? THE MAJOR VALUE PROPOSITIONS

•

“Our prices are the lowest.”

•

“Our product is uniquely better.”

•

“We make things easier for you.”

•

“We take ownership of customer results.”

According to Kaplan and Norton (2004), a business strategy should be based on a differentiated customer value proposition. Satisfying

The authors of Creating and Delivering Your Value Proposition (2009),

customers is the source of sustainable value creation. The five major

Cindy Barnes, Helen Blake, David Pinder emphasise the importance of

generic value propositions identified by Kaplan and Norton are:

identifying value propositions to create customer profit.

•

low total cost

Choosing the value propositions should be the central element of any

•

product leadership

estate agent’s marketing strategy. The ultimate definition of success for

•

complete customer solutions

an agent should be the strategy’s ability to achieve its objectives. By

•

system lock-in

studying different authors on this subject, we see that the identification

•

relationship management.

of value propositions can enhance focus, manage output areas and

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establish a platform for performance management.

in the delivery of this value proposition, a research

According to Kaplan and Norton (2004), choosing a

and development and marketing attitude is crucial. The

value proposition is “the central element of strategy”.

strategic objective of this value proposition includes outstanding performance along dimensions such as

Let’s briefly explore the various value propositions.

speed, accuracy and size.

1. BEST TOTAL COST: this value proposition includes

Agents should focus on identifying changes in the

the “best buy” concept. The objectives for a best total

market early on and must immediately adapt their

cost value proposition should emphasise attractive

approach to the research, development and marketing

pricing of products, excellent quality, short lead times

functions. To achieve success, an agent must excel

and ease of purchase.

in anticipating customers’ needs and discover new opportunities for superior service delivery.

Competitive pricing is the main reason why some of the purchasers out there will buy a specific product. If

3. COMPLETE CUSTOMER SOLUTIONS: before any

the perception exists that overcharging without adding

intervention is suggested, a proper assessment of the

value to the buyer exists, the selling process will not

situation should be conducted. This assessment should

get off the ground. The problem in the property market

add value to the appropriateness of the suggested

is that houses are listed at the same price, by various

solution. For this value proposition, customers should

agencies. In fact, the buyer cannot get a “sweeter

feel that the estate agent understands them and is

deal” at one agency over another. The value you add

capable of providing them with products or services

as an agent, however, will distinguish your service

that are tailored to their specific needs. Agents who

delivery from that of others.

offer such a value proposition stress objectives relating to the completeness of the solution, and they offer

Time becomes an important component in this value

exceptional service that includes point-of-sale and post-

proposition. You, as agent, are sometimes pressed for

sale service.

time and need to deliver the suitable property in the shortest time available. To achieve this, agents must

Agents should develop a deep understanding of their

have a solid knowledge of the technology they will use

customers’ values and bundle existing products and

to assist them in satisfying their clients’ needs.

solutions into individually customised solutions to assist in the customer’s profitability. Again, the research

To deliver on the value proposition of best total cost,

function is aimed at understanding the customer’s future

agents need to manage their own costs. Companies

needs and preferences, rather than at fundamental

and agents that pursue best total cost need to be

product innovation. Engaging the customer in the total

capable of replicating the innovations produced by

process will ensure customer retention.

product leaders in order to prevent their services from becoming obsolete. These types of companies

4. SYSTEM LOCK-IN: the objective of this value proposition

and agents must also pursue a strategy of insourcing,

is to create a very high switching cost for the potential

alliances and partnerships, to ensure compliance to the

buyer. The switching cost can arise in different ways.

value proposition of best total cost.

The agent must create such a service experience that the potential purchaser will think twice before moving

Consistent high quality is not negotiable. Highly

to another agent to deliver the same service.

efficient processes that convert input from all the parties involved in the purchasing process into outputs

This value proposition is linked to the previous

for the customer are core to the successful achievement

value proposition of providing a complete solution.

of this value proposition.

Suggesting a process approach as a solution can be a system lock-in value proposition. Offering

2. INNOVATIVE CULTURE: the objectives for this value

electronic feedback or databank services or even

proposition emphasise the particular features and

post-sale services could be a system lock-in strategy.

functionalities of the products/services that comply

The rewards from pursuing such a strategy can be

with the customer’s specifications. To achieve success

enormous. Involving the customer in the total buying

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and registration process is both a “complete customer solution” and a

This value proposition also includes the collaboration and partnering

lock-in value proposition. The availability of appropriate information

strategies of agencies and agents. Agents should have a very clear and

of market trends and possible future movements will be valuable to the

understandable partnering strategy.

customer, while the availability of a stable technology platform will enhance the lock-in value proposition.

To satisfy the value propositions of all customers, agents and agencies should be able to enter into strategic partnerships and collaborations

5. RELATIONSHIP MANAGEMENT: any agent must build long-term

in order to increase their delivery scope. Long-term relationship with

relationships with her customers. The objectives in this value proposition

suppliers should also include the robust evaluation of suppliers in

include the basic understanding of the most preferred range of products

terms of their products and services, as well as operating processes.

and services desired by the largest segments of customers, and the

The assessment of performance by the customer will ensure long-term

retentions of customers.

delivery of quality.

BEST TOTAL COST

Competetive pricing

Time

Lowest-cost supplier

Consistent high quality

INNOVATIVE CULTURE

Alignment to customer specifications

Research & development

Outstanding performance

Anticipating customer needs

COMPLETE SUSTOMER SOLUTIONS

Proper assessment of the situation

Customised products and services

Customer profitability

Customer retention

SYSTEM LOCK-IN

Suggest a process approach

Delivery accepted as a standard

Technology as a stable platform

Availability of appropriate skills and knowledge

Basic understanding of needs

Strategic alliances and partnering

Robust evaluation of suppliers

Assessment of performance by the customer

RELATIONSHIP MANAGEMENT

Figure 1: Summary of the value propositions

VALUE PROPOSITIONS OF AN ESTATE AGENT

time. Buyers want their needs satisfied in the shortest time available. Also cost in terms of my own.” As an estate agent you need to

To develop a value system for yourself, you must take all the relevant

manage your own cost; therefore it should be within your budget to

information into consideration and modify it to suit you. The final value

drive buyers around to all possible properties until they are satisfied.

proposition statement is not a one-size-fits-all solution. Your own set of value propositions could be as follows:

It should be within your budget to do all that is possible to sell the client’s property by means of additional actions such as flyers,

1. BEST TOTAL COST: your mantra can be: “I accept that the cost factor

advertisements, showing the property and so on. By managing the time

is very important to my buyer or seller. Especially cost in terms of

factor and your own cost, you can increase the customer’s profitability.

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2. COMPLETE CUSTOMER SOLUTION: this indicates several

and research has shown that they are ready and willing

important factors. First of all, it encompasses the

to stop shopping around and to stick to individuals

anticipation and internalisation of the customer’s needs.

and companies who will go above and beyond the

Second, this needs to be aligned to your actions as an

expected service standards.

agent and to the possible properties that will satisfy the client. A complete customer solution includes a strategy

Honesty refers to a facet of moral character. Research

to retain your client for future referrals or business. This

has shown that, often, people lie to make themselves

is called a “lock-in strategy”.

look better. This can take the form of the tall tales we tell others about ourselves. People also lie to avoid

3. INTEGRITY: this value proposition could be the most

embarrassment. Honesty includes the peace of mind

distinguishable proposition of them all. Integrity consists

that your client will have in all your dealings, including

of the following integral parts:

the advice or opinions that you give.

• loyalty • honesty

It is said that trust can easily be lost but is very difficult

• trust.

to regain. People form impressions about you based appearance and attitude. When it comes to building

Loyalty means that you as an agent will stay loyal to

trust and rapport, there is nothing more important than

your clients whether you are selling their property or

making a favourable first impression. In most cases

researching a possible property for them to buy. You

your client’s first impression of you will be made over

also want your clients to stay loyal to you. In a world

the phone or from a voice message you leave. It is

where your competitors are only a click away, customer

important to show up on time and be well prepared,

service really is the new marketing. All your buyers and

maintain a well-groomed appearance and dress

sellers have access to all the information they need,

appropriately for your market.

BEST TOTAL COST

Time

Manage own cost

Customer profitability

COMPLETE SUSTOMER SOLUTIONS

Anticipation of customer needs

Alignment to customer specifications

Customer retention

INTEGRITY

Loyalty

Honesty

Trust

VALUE PROPOSITION

SUPPORT COMPONENTS TO THE VALUE PROPOSITION

Figure 2: Summary of value propositions of an estate agent.

COMPILED BY DR JOHAN H VERMEULEN

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TERTIARY TRAINING CEMENTS PROFESSIONALISM IN THE COMMERCIAL SECTOR The UCT Graduate School of Business campus at the historic Breakwater Lodge in Green Point, Cape Town Operators in the commercial real estate sector have every opportunity

term goal to professionalise an industry with a low tolerance of rogue

to achieve the highest levels of professionalism. Their participation in

practitioners,” says Martin Ferguson, human resources director at Sapoa.

the ongoing successes of continuing professional development (CPD) programmes nationally is thanks to the long-term commitments and

The continuing success of industry partnerships, including corporate

collaborative efforts of universities, industry bodies and businesses.

sponsorships and scholarships, ensures that the training needs of skilled and unskilled operators are catered for. Endorsement and recognition of

Skilled as well as aspiring operators enjoy access to numerous paths

qualifications and accreditation towards a broad spectrum of CPD points,

for career enhancement. Proficiency and relevance in an ever-changing

as required by the EAAB, are provided for by Sapoa, the South African

market is taught by highly regarded academics and established market

Council of Shopping Centres (SACSC) and others. This applies to five CPD

practitioners, who incorporate real-world methodologies both within and

points only per annum.

outside university lecture halls. Added value derived from the upholding of global standards for professional achievement includes enhanced

“While training programmes provide Sapoa with an income stream, the

credibility, reduced risk, a competitive edge and advanced levels of

process enhances credibility both nationally and internationally towards

personal development.

high standards of conduct, ethics and accreditation of academic institutions in a fast-growing industry,” says Ferguson.

Efforts to meet international standards and possible accreditation through a dedicated professional industry body is promoted through improved

Mandatory compliance and the earning of CPD points, as required of

regulatory and industry control. “Raising the bar of professional education

professionals in other sectors, are facilitated by the EAAB. A comprehensive

in the commercial real estate sector at Sapoa continues as part of a long-

diary of national EAAB workshops this year coincides with the first three-

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year rolling CPD cycle was promised and should have commenced in

undertaking by a 50/50 mix of industry professionals and academics.” He

January. Very little has been forthcoming at publication date.

says the course has, since inception, attracted 1,050 registrations and has enjoyed a 50% completion rate and 53% pass rate, representing about

Greater availability of part-time courses can be seen as institutions

90% of those who write the exam.

increasingly recognise the need for working people to further their skills in the most efficient and cost-effective manner. This is in addition to NQF

Cloete, who continues to serve on a number of tertiary and industry

qualifications and full-time undergraduate and postgraduate real estate

education committees, says collaboration between UP and the SACSC

degree courses.

has resulted in the development of two retail industry courses: the oneweek, full-time SACSC Certificate in Shopping Centre Management course

The proliferation of e-campus offerings in line with global market trends

attracts about 70 participants, while the one-year Advanced Certificate

promotes part-time educational programmes on virtual platforms, with

in Shopping Centre Leadership has seen the enrolment of 20 to 30

growth reported in national enrolments. The EAAB says plans are afoot

industry professionals.

for greater online course participation, to enable students outside major metropolitan areas to accrue a required number of verifiable CPD points.

The addition of four options two years ago by the Wits University School of Construction Economics and Management, relatively a

Part-time education at executive level needs little introduction after the

newcomer to short-term education, has been initiated as part of the

successful implementation in 1969 of a two-week full-time Property

university’s CPD programme. Professor Samuel Azasu, who heads

Development Programme (PDP) at the University of Cape Town (UCT)

the team of course educators, says 2015 saw steady growth in the

Graduate School of Business (GSB).

number of enrolments despite a difficult start. Says Azasu: “Engagement with industry collaborators has allowed the design of courses to suit

Kumeshnee West, acting director of executive education, says the GSB

commercial practitioners at various levels of entry, from national diploma

is respected internationally for the calibre and style of its leadership and

to undergraduate and postgraduate degrees.” The faculty also attracts

management development programmes. Says West: “We are very proud

students from neighbouring countries and welcomes future accreditation

of the partnerships we have with industry, and the extremely popular PDP

by reputable institutions. “The decision to conduct quality short courses on

course is a great example of what can be achieved when those partnerships

an in-house basis, as opposed to outsourcing, is a matter of reputation and

operate in synergy.”

places strong emphasis on offering an internationally competitive training programme for the industry.” He says the same high standards and quality

West says that since its inception the PDP programmes, presented jointly by

control that apply to any executive or other course offered at Wits are

GSB and Sapoa, have attracted about 2,435 graduates and that it remains

upheld at all times.

one of the longest-running and most prestigious course at UCT. Various certificated e-learning options are available across leading portals. Sapoa’s Martin Ferguson, who is also the course director at the GSB, says:

GetSmarter, which has partnered with UCT, offers the UCT Commercial

“Sapoa has over 37 years witnessed a 100% pass rate and enrolments to

Property Broker, Law and Practice online short course. Angie Labuschagne

maximum capacity of up to 72 students.” He says the high level of entry

of GetSmarter says: “GetSmarter is SETA approved and will shortly be

and stringent practical application of this course requires either a graduate

offering a property investment short course.” Although GetSmarter courses

education or a minimum of seven years’ middle to senior management

do not yet contribute towards CPD points, “they are recognised by Africa’s

experience. Those who attend the course are divided into groups of eight,

leading university, the University of Cape Town”.

according to participants’ areas of specialisation. Other institutions that offer a variety of short- and long-term courses include The dedication CPD educational teams who facilitate such courses to the

the University of Johannesburg, the University of the Free State and the

acclaim of investors and business alike cannot be underestimated. The

Nelson Mandela Metropolitan University.

School of the Built Environment at the University Pretoria (UP), headed by Professor Christo Cloete, who together with his team is reputed for the

Sapoa’s Ferguson says future accreditation for the achievement of high

design of internationally recognised degree courses, pioneered a one-year

levels of skill through one or two dedicated commercial real estate bodies

distance-learning programme in 1997. The UP Certificate of the Commercial

aims to follow the lead of industries in the built environment, engineering,

Property Practitioner (CCPP) runs over 10 months and is in its 15th year as

architecture, quantity surveying, conveyance, accounting and valuation.

an EAAB-accredited and Sapoa-endorsed course. Says Cloete: “The scope of this course – regarded as comprehensive with the added pass requirement of a certificate of attendance – is a joint

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PROPERTY FINANCE IN SOUTH AFRICA Property Professional speaks to leading property data analytics and information firm Lightstone to find out more about annual inflation rates according to area value bands as well as freehold versus sectional-title properties from 2009 to 2014.

8 7

ANNUAL INFLATION: AREA VALUE BANDS LUXURY - 1.5 MILLION AND OVER

HIGH VALUE: R700,000–R1.5 MILLION

MID-VALUE: R205,000–R700,000

6 5 4 3

7.0%

5.6%

3.5%

5.2%

6.4%

2.8%

1 0

2.8%

1.1%

2009

3.6%

3.3%

2010

2.7%

2.3%

2011

4.1%

3.7%

4.8%

5.6%

2012

2013

6.4%

6.1%

2014

10 8 6

ANNUAL INFLATION: FREEHOLD VS SECTIONAL TITLE PROPERTIES FREEHOLD

2.8%

4 2

SECTIONAL TITLE

2.8%

2009

2.8%

2.8% 2.8% 2.8%

2.8%

2010

2011

2012

2013

2014

(Source: Lightstone)

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TAKE THE LEAD

F I N D I N G B U Y ER S A N D S ELLER S I S A LWAY S G O I N G T O B E T H E M O S T I M P O RTA N T A S P E C T O F A N Y AG EN T ’ S CA R EER . P RO P ERT Y P RO F ES S I O N A L TA K ES A L O O K AT S O M E O F T H E WAY S O F I N C R E A S I N G T H E C H A N C ES O F L A N D I N G G O O D LE A D S

We all tend to stick with the methods we know to work, but does this mean

calendars and hand out hundreds if not thousands of flyers. Although there

that sales and marketing techniques that always worked in the past will to

is no data available on the success these various techniques brought, it

continue to help us build our careers in real estate in the future? Sadly, the

was generally held that one of the important aspects of any agent’s selling

answer is probably not.

career was linked to exposure, and as such it would be fair to say that agents who marketed themselves extensively enjoyed more success.

In his book Success as a Real Estate Agent For Dummies, Dirk Zeller offers a number of tips aimed at helping agents reach the top of their game.

Branding is and always will be important, and while wrapping your car in

What’s interesting about his advice is that he doesn’t dismiss the marketing

the company colours and logo may well get you noticed, it’s unlikely it will

techniques that agents have been utilising for years, but he notes that

be enough to secure good, solid leads and clients continually.

relying on those initiatives is never going to be enough and that agents have to do far more than hand out a few promotional items and then sit

Securing new clients is the backbone of any agent’s business. Known

back and wait for buyers and sellers.

as “prospecting”, how agents go about this vital aspect of their business varies from person to person. Remember, prospecting is hard work,

In the old days agents would splash their names and telephone numbers

and not every lead is going to become a client. Like the miners who

on every available dustbin in a particular area, have key rings made, print

prospected for gold way back when, you may have to sift through an

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awful lot of dirt before you hit gold. Some agents appear to have a knack

Amend the listing on every website immediately if there has been a price

for finding new business; however, this is due not to luck, but rather to the

reduction. Agents who struggle to keep up with the more mundane parts

way that they go about securing clients.

of their job should consider delegating as much of this work as possible.

Zeller has compiled a list on prospecting, highlighting what it is and

The internet has become an invaluable tool for selling properties.

what it isn’t. Picking up the phone and calling past clients is prospecting;

While every agent may know this, many still don’t understand that first

mailing them fridge magnets, calendars and other paraphernalia isn’t.

impressions extend far further than the way an agent dresses or what car

Calling people in your sphere of influence is going to net buyers and

they drive. Zeller notes that buyers enjoy the anonymity of looking online

listings; setting up a website and sitting back, waiting for clients to call,

before contacting an agent, which means that those who want to make

isn’t. Cold-calling for listings and sales is going to result in more work;

a good impression need to do so from the get-go. He correctly states that

simply wearing a name badge and hoping that buyers will seek you out

although agents will never turn every online visitor into a lead, they can

isn’t. Hosting show houses is going to attract buyers; sitting in the office

increase their conversion rates dramatically by presenting an effective call

and hoping to snare the odd walk-in isn’t.

to action. He maintains that the best way to achieve this is by offering to supply additional information or by inviting the visitors to fill out some sort

Clients have to form some sort of bond with the agent with whom they

of survey.

work, so agents need to get out and meet people in order for these ties to be formed. Not every meeting is going to end in a positive result.

“After you capture a lead, you need to go into full court press to convert

However, making a feeble attempt to secure ongoing business is more

the name and contact information into a prospect for your business. For

than likely going to fail completely.

some reason, agents don’t follow up with internet leads as aggressively as they do with ad call or sign call leads. I consider this a mistake because

ALTERNATIVE WAYS OF SECURING NEW BUSINESS INCLUDE:

in today’s world you stand to generate more leads online than from any other source,” he says.

• phoning the owners of properties that have been on the market for

an extended time – the sellers’ circumstances may have changed

Those who want to grow their business will follow up on every single lead,

and they may be willing to drop the asking price

every time, all the time, regardless of where they are sourced. Although

• keeping in touch with previous buyers and sellers

Zeller points out that not every lead will necessarily turn into a successful

• contacting absentee owners in order to ascertain that they still want

sale, he uses the following example to illustrate just how effective a few

tweaks to an agent’s webpage can be.

to hold on to the home

• going door to door – this is perhaps the oldest method of finding

buyers and sellers but is still a sure-fire way of finding new business.

“If your site draws 1 000 visitors and 150 of those visitors request your free report, you’ll have a 15% visitor-to-lead conversion ratio.

One of the most common gripes that sellers have is that agents don’t give them feedback. It’s easy to understand why this important part of the job is

“If you convert 5% of the resulting 150 leads to buyer-consultation

often overlooked: agents are busy people, they have houses to sell and as

interviews, you’ll generate 7.5 interviews from the 1 000 site visitors, or a

such administration duties often take a back seat.

0.75% site visitor-to-interview conversion rate.

Zeller refers to the admin side of an estate agent’s job as “production-

“Based on your online conversion rates, you’ll have a base from which to

supporting activities”. These tasks include: filing, documenting a listing,

work as you adjust your marketing and conversion strategy. For instance,

advertising, giving feedback, dealing with conveyancers – in fact, just

if you want to generate 15 instead of 7.5 interviews, you’ll have to either

about anything that doesn’t directly make the agent money.

double the number of visitors to your site or double your conversion rate. It all boils down to the numbers.”

It’s easy to get caught up in an admin whirlpool. Zeller suggests that agents dedicate blocks of time to these necessary tasks instead of

Those who continue to struggle to find effective ways of garnering new

haphazardly trying to fit them into their day. Keep a list of what needs to

leads may well be advised to look at the way other, more successful

be done and focus on these issues only during the allotted time period.

agents conduct their business. There is nothing wrong with taking tips and

Use this time to check on your online listings to ensure that all relevant

advice from those in the know. After all, if it worked for them, there’s a

information is current and that the spelling and grammar is correct.

very good chance that it will work for you.

There is nothing more irritating than seeing the same property listed at different prices by different agencies, yet this appears to be a common problem. Check in with the sellers monthly to see if anything has changed.

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BY LEA JACOBS

2015/04/23 3:56 PM

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W E A S K ED T H E EX P ERT S F O R A DV I C E O N C H O O S I N G A S T R AT E G I C PA RT N ER S O T H AT YO U M AY TA K E YO U R B U S I N ES S T O T H E N EX T LEV EL

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CHOOSING THE RIGHT BUSINESS PARTNERS

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Partnerships are a fundamental part of any business, and how and why

they serve. We have worked hard in the past three years, coming

you pick those specific partners is just as important.

alongside our clients and ensuring that we build their value first and foremost. That is what true partnering is about: building the vision for

The first step is to define what a strategic partner is. Says Ted Frazer,

all parties before your own.

national marketing manager of Seeff: “Companies often enter into beneficial associations and partnerships with other organisations;

“Certainly, there are times when partnerships don’t work out. This is

however, in most instances these are ‘exclusive marketing relationships’

most often the result of differing value systems. Great partners value

and not true ‘strategic partnerships’.

the same things you do. For us here at Private Property, any business that values quality, service and relationship before cold, hard cash is a

“We define strategic partners as those that have a real impact on our

partner that we work well with.

business and positively influence our core business – and bottom line. In this light, we would view Ooba as a strategic partner, as well as the

“The world has moved on so quickly in the past decade. It is now

leading banks and lending institutions.”

hyperconnected on all sorts of levels. Social networks in particular have driven this engagement. With this enhanced connection between

In addition to whether the partner adds value to Seeff’s core offering,

people has come the requirement to partner in business more often

says Frazer, there are two other aspects the group considers when

and at a deeper level: ’I work for’ has changed for the better to

evaluating partners, namely (a) brand association (the partner’s

‘I work with’.”

corporate brand profile and values must align with Seeff’s, and there needs to be brand synergy), and (b) the partner must be of the same

So, what are the main reasons for seeking out a strategic business

or similar stature and “ranking” within its category sector as Seeff is in

partner? Partnerships have always been vital to the real estate industry,

its own.

be they between the property group and providers of essential services (such as bond originators or partnerships forged with legal providers)

“When it comes to assessing value, the primary focus here is

or corporate partners. Adding value to your business is key when

the customer,” Frazer continues. “A potential partner must add

looking for strategic business partners.

demonstrable value to the customer, through service, cost saving or other similar benefits that would enhance the overall customer

“You should find experienced businesses with objectives that align

service experience. Naturally, a suitable partnership – even exclusive

with your own, and businesses that have a passion for what they do,”

marketing relationships – can also provide a competitive advantage

says JP Farinha, CEO of Property24. “A mutually beneficial relationship

through adding value to a customer’s experience. When assessing a

will yield the most investment from both parties. Evaluate up front if this

potential partnership, an important component is to think long term

partnership will help you achieve your short-term or long-term goals

and ensure that the due diligence process is thorough up front. Ensure

and, accordingly, weigh up how much to invest in it.

that the partnership really will add value and/or provide a competitive advantage. Also make sure that the brand association is a good one

“Then, of course, do your homework and ensure that there are

that enhances your brand.”

credible people managing the business with a good track record. In a partnership, you will spend a great deal of time working with

Private Property’s chief operating officer Simon Bray agrees: “Private

the management team and it’s important to evaluate whether or

Property embraces partnership as a fundamental philosophy of our

not your companies ethics are aligned. Make sure that when your

business. We don’t see ourselves as just a property portal but rather as

names appear in the press together, it’s an association that you

a marketing partner to our real estate advertisers and the consumers

are proud of.”

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Sometimes, a partner can also be an asset to a company. Says Pam

applying for bonds. Then there are all the various attorneys we work

Golding Property Group Chief Executive Andrew Golding: “We work

with. They ensure that the transfers go smoothly, – although we have no

closely with a number of third-party organisations that have specialised

formal relationship with them as ‘partners’.”

knowledge which adds value to the buying-and-selling transaction cycle. Two of the more important are attorneys, who assist in the

For companies and organisations providing complementary services,

conveyancing process to facilitate transfer of a property from a seller

the main benefit arises when their joint efforts align to enhance the

to a buyer; and mortgage originators, who work closely with agents,

overall customer experience. “Focus,” advises Everitt when asked

buyers and the banks to obtain a bond-finance solution that enables

for the best advice he can give readers who are looking to partner

purchasers to meet their financing obligations as set out in the offer

with complementary businesses in order to offer more value to

to purchase.

prospective clients.

“Our decisions to use or to recommend a particular professional

“Our mortgage origination partner, Ooba,” responds Richard Gray,

service provider are based on a number of factors, including

CEO of Harcourts Real Estate, when asked to name the company’s key

appropriateness and quality of service provider,

strategic partner. “Getting property finance is one

competitive cost, location, benefit to our clients and

of the most critical steps in the sale of a house.

preferential procurement requirements that may be indicated by the applicable charter/codes of good practice. “It is essential that they have the service ethic and professional capability to offer our clients a service experience that meets our high expectations. We will only enter into third-party relationships where we can be assured that our clients will enjoy the best possible service experience that is also cost-effective. Their value lies in the service and professional expertise they offer the client as well as in their value-for-money cost structure.” The most important piece of advice that Golding has to offer in terms of finding the perfect partners

“We like to work with companies whose service ethic aligns with our own, but the client always has the final say” Berry Everitt, MD, Chas Everitt International Property Group

for your business is to ensure that they have the

When one considers the time and effort it takes to sell a house, one needs to ensure that you are working with the best home finance expert. “Reputation and ability are essential,” he continues. “If we refer a buyer to a partner, we need to be sure that they are up to standard and will offer the best service. It is also critical that a partner shares similar values and ethics to your company. The key to a partnership is that it needs to be mutually beneficial. One partner cannot feel that they are being disadvantaged. Partners need to add value to each other; in other words, they should both feel that they would lose something if the partnership dissolved. Once again, if both partners share similar values, there is a higher chance of the partnership being sustainable.

expertise to deliver the anticipated service and that their service values and professionalism are aligned with your own.

“My best piece of advice? Firstly, understand what would add value to

They must take responsibility for their delivery to the clients and provide

your clients. So don’t partner for the sake of partnering. Secondly, find

timeous feedback to your clients and to you.

a company that will complement yours in terms of offering a consistent experience to the client. Finally, an acid test is, would you employ your

According to Lew Geffen, chairman of Sotheby’s International Realty,

partners in your business if you needed to? This will tell you a lot about

the group’s biggest assets/partners in the property industry are

what you think of their abilities, values and culture.”

mortgage originators and attorneys. When they weigh up the decision of whom to partner with, they weigh up reputation, research and

Choosing a strategic business partner is a delicate process that

ethics. Says Geffen: “What sets these arrangements apart is the value

requires thorough investigation, focus and dedication. You can add

of the relationships, measured by the quality of the service we get. The

real value not only to your business, but also to your clients’ experience

best advice I can offer your audience, in terms of considering strategic

by choosing the right business partners and entering into the right

partners, is to research them thoroughly first.”

partnership agreements. By following the experts’ advice, you are one strategic partnership away from taking your business to the next level.

“We like to work with companies whose service ethic aligns with our own, but the client always has the final say,” says Berry Everitt, MD of the Chas Everitt International Property Group. “Our preferred originator, BetterBond Home Loans, assists our buyers in qualifying and

PP May/June_Subbed_V3.indd 28

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2015/04/23 3:56 PM

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THE ECONOMIC BENEFITS OF MIXED-USE DEVELOPMENT

L A RG E - S CA LE M I X ED - U S E D EV EL O P M EN T S I N A C I T Y R EP R ES EN T CO N S I D ER A B LE N AT I O N A L , R E G I O N A L A N D P ROV I N C I A L CO N T R I B U T I O N S T O T H E CO U N T RY ’ S E CO N O M Y

An aerial perspective of PwC’s 25-storey headquarters at Waterfall City, Midrand

Gauteng and the Western Cape are dominant forces within the

Another presentation in the same report, of the relative size of the

financial, real estate and business sectors, as can be seen from

provincial economy of the same sector, however, saw the Western Cape

Statistics SA’s 2006 to 2011 reports on the regional distribution and

dominate in size at 26.6%, followed by Gauteng at 22.8 % and the

relative size of different industries, by economy.

Eastern Cape at 18.6%.

The largest contributor to the real estate sector during this period –

This is also illustrated in Cape Town’s desirability as an investment

including property-related revenue streams – was Gauteng Province at

destination, according to the Cape Town Partnership and economists.

41.1%, followed by the Western Cape at 19.7%, and KwaZulu-Natal

This is largely thanks to productive revenue streams in the city. National

at 13.6%. The manufacturing sector in Gauteng followed closely at

investors and developers who take a longer view are attracted by the

40.5%, with a much lower Western Cape contribution of 14.6% and

sound management of tax revenues derived from commercial property.

21.6% in KZN.

Actual and projected income from the real estate and related industries

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can be expected to feed into public service delivery, infrastructure

Economic estimates are that the growth of property values of R2.8bn

development and, in some cases, additional spending on culture

– or 23% – would have existed in the absence of the V&A Waterfront.

and heritage.

Independent economist Barry Standish said the V&A Waterfront’s growth prospects and new developments are set to impact economies at all

The economic contributions of large mixed-use developments located

levels and could contribute a cumulative R223.7bn to nominal GDP

close to major cities is of significance to the built environment and retail

by 2027.

sectors. The economic dominance of Gauteng and the Western Cape continues as South Africa’s listed real estate sector is drawn to areas of

Proximity is a major factor in new innovations in Gauteng, in response

population growth, productivity and increased consumer spending, most

to the demand for convenient access to quality tenancies in secure

notably among the country’s growing middle class.

surroundings. The impact of traffic congestion on national roads and crime in residential areas that result in commercial vacancies further

Innovative solutions as a result of massive capital investment can be

highlights the need for close proximity to business, employment,

seen as new mixed-use developments increasingly provide a broader

public transport, good education, and entertainment facilities. Investor

accommodation mix to include office, retail, hospitality, entertainment

confidence in the Gauteng economy was illustrated in 2013 at the

and residential space.

launch of the mega-urban concept development of the Waterfall commercial mixed-use precinct and Waterfall City, as the planned central

Cape Town’s V&A Waterfront, a joint entity between South Africa’s

business district. The commercial development rights of the Waterfall

largest REIT, Growthpoint Properties, and the Public Investment

project are fully owned by the JSE-listed capital growth fund Attacq,

Corporation (employee pension fund) has for more than a decade

which works closely with its development partner, Atterbury.

illustrated the benefits of sound mixed-use development and long-term planning. V&A CEO David Green said: “With GGP as the provincial

The construction of the R160m highway overpass bridge to improve

equivalent of GDP, the total contribution to Western Cape GGP

Midrand traffic is one of several project solutions initiated by Attacq.

increased from R8.99bn in 2002 to R29.3bn in 2014. Consistent

CEO Morné Wilken said that the Waterfall City commercial, industrial

growth in GGP as the provincial equivalent of GDP over the past

and retail property components, which include the 25-storey PwC

10 years – of 11% year on year – illustrates the vital role played by

headquarters measuring 40,000m2, a super-regional shopping centre

small and medium enterprise, that has since 2002 added over R227bn

and an upmarket private residential estate are set to generate various

to Western Cape GGP.”

income streams for the fund. “The 131,000m2 Mall of Africa, SA’s biggest single-phase mall development, is the largest project and

The knock-on effects that benefit local residents are noted in the substantial

anchor development within Waterfall City. Mall of Africa, with a total

rise in direct and indirect job creation in Cape Town, tying in with the

development cost of R3.2bn, is set to be a major catalyst for further

government’s position on job creation and growth in the small-business

growth at Waterfall when it opens in April next year.”

sector. An increase in total jobs of 57% since 2002 is estimated to have added a nominal R65 billion to indirect household income in the city.

Additional future benefits, over and above growth in employment and small-business enterprise, of large-scale developments are a host of

Retailers who rely on consumer spending and pay premium rentals to

investment opportunities. International standards of city developments

attract top brands and optimum foot traffic have been rewarded with

show industries likely to be lured by a healthy scale of economics

double-digit retail growth for the fourth consecutive year. Benefits to the

usually hail from the financial and business services sectors, within the

real estate sector, says Green, lie in the significant impact on property

fields of technology, telecommunications and information solutions.

values that relate to growth in numbers of a balanced mix of fixed and variable tenants, who are increasingly less dependent on location and

The overall economic contributions of mixed-use developments in South

tourism to support a sustainable business model.

African cities form a substantial and promising component that will attract future growth in real estate.

While 2013/2014 research does not include updated estimates on impacts by the V&A on property values in the immediate vacinity, key findings show a price premium on property within a 1.5km radius of the V&A Waterfront.

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BY ANNA-MARIE SMITH

2015/04/23 3:56 PM

WORLDWIDE LEADER IN TRAINING! Change your mind and learn to earn Six personal perspectives that will change your life forever Why do some people seem to be “showered” with success and wealth? Everyone has only 24 hours in a day; perhaps they work longer hours? Is it a higher intellect or being born with a silver spoon in the mouth? Surely all these elements can be defining; however, most people don’t realise that the REAL DIFFERENCE is the individual’s MIND-SET and a PIVOTAL DECISION. Think about it … when did you become content with who you are and what you’ve done with your life? When did you ‘agree’ to having limited control over your circumstances and life? Do we have control, or are we dealt with specific cards and have to make the best of it? Somewhere in your life’s journey, you “unknowingly decide” that what you have learnt or know is good enough. You are content with your circumstances and your level of success. You resign yourself to the fact that you know enough. A learning-based individual has made the decision to use learning as the foundation for his action plan to develop his life. What does it mean, though? The learning-based person, quite simply, has moved on from short-term, trivial pursuits and not knowing where he is going, to PURPOSEFUL DIRECTION and a plan. His mind-set is, “I know what I now and there is more to know.” And the result thereof? Yes, PRODUCTIVITY; greater WEALTH; more success and personal SATISFACTION.

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A simple case of competence? What determines this? Only the individual and his decision to become learning-based; to evolve from ‘unconscious incompetence’ to ‘unconscious competence’. This simply means that you “DON’T KNOW WHAT YOU DON’T KNOW”. Such is the teenager who wants to start driving a car. He is ‘unconsciously incompetent’. After a few failed attempts to drive the car, the teen realises that he’ll have to take some instruction. After driving lessons and practice, the habit is created

and driving becomes an ‘automatic skill’ whereby he doesn’t have to think about every aspect of ‘how to drive’. The teenager is now ‘unconsciously competent’. If you want to change your circumstances and evolve into a higher achiever, you have to make training, education and self-development a foundational piece of your plan to achieve your goals.

“The only person you are destined to become is the person you decide to be.” Ralph Waldo Emerson Ultimately, an individual’s mind-set holds the key to what he can accomplish. Years ago, Keller Williams’ co-founder, Gary Keller, discovered that high achievers have a similar mind-set when it comes to success. The key points are encompassed in the KELLER WILLIAMS SIX PERSONAL PERSPECTIVES. You too can be a high achiever and reach the highest level of success in business and your life by learning, adopting and mastering these foundational perspectives. Contact us for a life-changing, half-day course – THE ONE that WILL impact your life! info@kwsa.co.za •

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From ‘porridge-brain’ to incredible net gain “I earned more in 8 months in real estate than I earned annually before I left the corporate world!” Urcelia Teixeira, rookie sales associate, explains. “I paid off my dream Mercedes-Benz in only 3 months!” But it was her eldest son’s recognition that surpasses having her dream car. “We were in the kitchen and Noah came up to me, gave me a hug and said that he was so proud of me! Nothing beats recognition and admiration from your children! “It confirmed that what I was doing with my business was paying off, in more ways

learning. I learnt to lead-generate by getting listings from my sphere of influence. I didn’t realise that I had a sphere of influence! It even provides scripts to help me start my dialogue!” Urcelia admits that she now prioritises more effectively and time-blocks so that she can focus on realising these priorities, without any disturbance. From Ignite, she moved on to the Millionaire Real Estate Agent course and became an avid reader, especially of Gary Keller’s books. “Knowledge is power and the more I learn the more momentum my financial and personal success gains! “Learning for earning’s sake’ has become part of my purposeful living.”

“I never lose sight of my ‘Big Why,” she explains. She lead-generates daily and she confirms that, although her niche is equestrian properties, she’s built up a great referral network in a short 8 months. I manage my diary myself, and can spend time with my kids when I need to, and still reap the financial benefits. Keller Williams has turned my life upside down, for the better!

No frog legs, se il vous plaît “When you tell your wife you’re going to take her to Paris and on a ski-trip, you’d better do it!” smiles Martin Riley, then a rookie sales associate at Keller Williams Explore & Beyond. By telling his wife what his first goal was as a newbie in real estate, Martin knew his wife was going to hold him to it!

than building an income!” After 20 years in corporate sales and customer relationship management, Urcelia exchanged the boardroom for nappies, burps and slippers. During her self-described “porridge-brain” phase, she identified her biggest drive in life – her children’s future. “My ‘Big Why’ is to secure enough income for my sons’ educations and future.” She proudly recounts how she’s been able to pay her sons’ annual school fees upfront this year. Her husband, who is also in real estate, convinced her to join Keller Williams, although real estate was completely new terrain. “The induction course introduced the world of real estate to me, and was the one course that really launched my success is KW Ignite. It ran over 2 mornings per week for 3 months and that allowed me time to start selling while

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This was also the first time in his life that he actually wrote down his goals. Originally a medical sales representative, Martin admits that it hasn’t been moonshine and roses from the word go. As an agent he too has periods of “drought”. “When it feels like nothing is happening, I now know exactly where I’m going wrong! Then it’s back to committed lead generation – every single day,” he explains. He attributes a lot of his financial success to attending the Keller Williams Ignite course. “The 4-1-1 goal-setting method has catapulted me to realising my potential.” Within 4 months, Martin sold 7 units! “This meant that I could take Phillippa, my wife, on a previously unimaginable holiday in France. The joy on her face has inspired me to do so much more!” Martin says one of the greatest lessons he has learnt is that ‘we limit ourselves by our thinking – we create our own ceilings of achievement, without even realising it”.

“My first sale... I will never forget it. It was an apartment and the seller was based in the USA. I remember the buyer came to view the unit 3 times with different family members and eventually wanted to make an offer... I was so excited! I took the offer and spent 2 nights until after midnight on the phone with the seller, negotiating. Eventually we reached a win-win agreement and the deal was done. The offer came from a first-time home buyer who has since sent me referrals. What a rush!”

Snow doesn’t dampen Martin and Phillippa Riley’s spirit

www.kwsa.co.za

2015/04/23 3:56 PM

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LIABILITY: PREVENTION IS BETTER THAN CURE PP May/June_Subbed_V3.indd 34

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Liability insurance is a necessity for workers in the property industry.

still applies in cases where the CPA does not apply, but most agents

Still, the adage that prevention is better than cure holds true. By hiring

haven’t got a clue when what applies. From the consumers’ point of view,

the right people and training them carefully, you can protect yourself

one must remember that the EAAB Fidelity Fund only covers them against

against the sorts of mistakes and misunderstandings that could result in

fraud and theft (dishonesty in the agency). Errors in regard to defects,

legal proceedings.

yields, safety, zoning rights and servitudes are not covered, so they will naturally look to recover any damages they have suffered in a different

THE 10 MOST COMMON CLAIMS MADE AGAINST REAL ESTATE AGENTS ARE:

way. That is why agents and agencies need professional liability insurance. But there is still the danger that if the insurance company can

1. fraud

prove negligence rather than genuine error by the agent, it will

2. breach of duty

repudiate the claim.”

breach of contract

4. negligence

What can you, as an estate agent/agency, do to combat this and ensure

5. property damage

that you are covered? Davel advises: “We make sure we understand the

6. misrepresentation

CPA and CPA-compliant documentation that contains the necessary

7. Consumer Protection Act

acknowledgements by the parties. We also use

contracts (mandates, offers to purchase, property

escrow money disputes

9. misrepresentation regarding flooding and leaks 10. misrepresentation regarding the value of the property. Says Jan Davel, MD of RealNet Property Group: “The biggest risk is that disgruntled purchasers or tenants could use the Consumer Protection Act (CPA) and/or its forums to hold an agent liable for any damages or defects, rather than the seller or the landlord of the property. In the appropriate circumstances – probably 95% of the time – neither of the parties to the real estate contract have any liability in terms of the CPA. For example, the purchaser is the consumer or the

“Agents need to remember that CPA complaint mechanisms are free and easy and that once a complaint has been lodged, they will have to respond. In other words, at that stage it will be too late” Jan Davel, MD, RealNet Property Group

protected party, while the seller is not by definition a supplier but the estate agent’s consumer in terms of the mandate.

condition reports) that are not aimed at pleasing either one of the parties, but rather at protecting the estate agency and the agent. The bottom line for agents is: join a reputable real estate franchisor that provides the necessary training and documentation. Prevention is always better than cure. Agents must get their houses in order and avoid the possibility of a claim. They need to remember that CPA complaint mechanisms are free and easy and that once a complaint has been lodged, they will have to respond. In other words, at that stage it will be too late.” Brand damage is always a real concern when complaints from the public are at play. This is where training and the employment process are crucial. When looking for staff, it is imperative to

check and double-check their references and track records. Each person who is employed by the company and who deals with members of the

“On the other hand, the estate agent will always meet the definition of a

public is the face of your business, and they are the people who can cost

‘supplier’ for purposes of the CPA and so can be held liable for services

your brand and company the most.

rendered and advice given to both parties, while the parties themselves are protected. It can be very difficult and confusing to determine whether

Says Berry Everitt, MD of Chas Everitt International Property Group:

the CPA applies. For example, the doctrine of latent and patent defects

“We have professional indemnity insurance in addition to the Fidelity

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Fund coverage provided by the EAAB. We provide ongoing training for

especially those who are not familiar with the processes involved, such as

our agents and franchisees, working with experts and professionals to

first-time homeowners.”

ensure that the consumer-centric culture of our business is reinforced at all levels and that everyone’s actions are aligned with

Andrew Golding, CEO of Pam Golding Property

our core values. My advice is to listen very carefully

Group (PGP), has a full plan in place to mitigate

and make sure that everything is clearly recorded and documented, especially when it comes to defect disclosure by property sellers.” Richard Gray, CEO of Harcourts Real Estate agrees: “Our agents are highly trained and regularly reminded of their obligations. Good estate agencies have plenty of checks and balances built into their processes. These include segregation of duties and strong administration. “Know your obligations,” Gray urges. “You are integral to one of the biggest financial transactions that people make in their lives, and you are obliged to ensure that you give the best advice and professional service you can. Always work with a good conveyancer who can advise the buyers and sellers on the more complex aspects of the transaction.”

“Principals are advised to clamp down on the smallest indication of unethical or unprofessional behaviour – insurance will cover one legally but will never undo the damage to one’s brand”

Annette Evans is regional general manager at IEASA Western Cape. She says: “It is imperative that the practitioner representing the client ensures that they are well-versed in the legal implications of

the risks of liability, including complying with the regulatory requirements affecting the property industry. But it’s their training and agent assistance that work effectively against liability. Says Golding: “We have a dedicated training academy that keeps abreast of the applicable training standards and professional qualifications required by agents and which ensures that our agents receive the necessary training and updates to enable them to do their jobs within the applicable regulatory framework. We also have a dedicated in-house legal and compliance function to assist the business in this process. “The PGP Group exco monitors business risks and identifies appropriate strategies to manage, mitigate and/or minimise relevant risks. The most effective protection against legal disputes arising and misconduct claims being lodged against estate agents is to ensure that our agent force carries out their responsibilities in full compliance with the

Jan le Roux, CE, Rebosa

representing the client in any potential property

regulatory requirements and our own internal policies and values so that we have satisfied clients at the end of the transaction process. In the case of our franchisees, they are contractually required to

transaction, be it a sale or a purchase. They need not be a lawyer, but

also adhere strictly to the regulatory framework in every aspect of running

they must have access to sound legal advice. The contract covering the

their businesses and are governed by terms and conditions that require

pending transaction needs to balance the rights and obligations of both

them to deliver a professional service to their clients that upholds the PGP

parties, buyer and seller. That, coupled by a full disclosure form on which

brand values and reputation. Where disputes arise, as they inevitably do,

the seller discloses all known defects of the property.

despite the best efforts of the agent, and where it is appropriate to do so, we get involved as early as possible with the objective of assisting in

“Practical experience in the industry, learnt from its faults and frailties, will

resolving disputes in the best interests of all concerned.”

be a good guide at all times for any potential buyer/seller. Above all, a good, solid, ethical and well-trained realtor is key to any successful

Says Rebosa CE Jan le Roux: “Liability insurance is essential, as is

transaction. Based on all the calls I receive from the members of the

adequate training. The real safeguard, though, is employing the right

public, I would stress that buyers need to be made aware of the costs it

people. Principals are advised to clamp down on the smallest indication

takes to transact, including the transfer duty, bond registration fees and

of unethical or unprofessional behaviour. Insurance will cover one legally

attorney conveyancing costs. Time needs to be spent with clients,

but will never undo the damage to one’s brand.”

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Plus R1Million FOR 1 LUCKY AGENT! For BetterRewards members.

The IEASA’s 10 steps to avoiding liability

Turn over for more details.

Make absolutely certain that the person signing as seller is in fact the lawful owner or has the required consent if acting for a CC/PTY/trust/deceased estate and so on. Do a WinDeed/ CMA search or get a copy of the title deed.

When taking a mandate from a CC/PTY, make sure that it has not been deregistered, because as long as it is deregistered it no longer exists – all its assets belong to the State and it cannot

If an irrevocable offer that expires at a certain time and date is

trade. Any agreements of sale concluded by members acting on

made, make sure that when the seller receives it, he initials in the margin next to this clause and adds the words, “I accept this benefit”, and then send that page as proof of acceptance of the benefit, to the buyer.

behalf of deregistered entities are void. Once this is done, the offer is truly irrevocable. If you don’t do

this, you are taking the chance that a court may hold that it is not actually irrevocable. In South Africa we have two decisions

Always obtain a copy of the conduct and management rules of a sectional scheme or constitution if the property falls within

that conflict 180-degrees with one another on this topic and on

a homeowners’ association (HOA). Ensure that the buyer has

whether one needs to do this to make it truly irrevocable. Rather

had a chance to study it and make sure that in the offer it is

err on the side of caution and follow the stricter judgment.

recorded that the buyer has read it or has had a chance to read it. It is your duty to draw the attention of the buyer to the existence of these documents because not all buyers are aware of the implications of buying into an HOA or sectional scheme.

4 5

Always obtain the latest financial statements of a body

Never answer a question about the property unless you are 100% certain of the answer, namely, interpretation of title deed conditions; whether improvements are in accordance with plans; whether one could get business rights and so on. The code of conduct prohibits any negligent or intentional

corporate and make these available to the buyer, as it should

misrepresentations, so be careful of this. As agent for the seller,

form part of the buyer’s education.

you are his spokesperson and your mistaken representation could be negligent and result in damages claims.

In the case of a body corporate, always ask the seller whether any special levies have been discussed in any recent trustee meetings or AGMs. If the possibility of a special levy has been raised, this must be disclosed to any potential buyers. Failure to do this could be seen as a latent defect should a special levy be

Do a Fica check on your seller when you take a mandate and on your buyer when an offer is accepted. Do not rely on the attorney to send you the Fica documents – this is illegal and can result in a fine that runs into the millions of rand.

passed after transfer.

Whatever handwritten additions or changes are made must be initialled and perfectly legible and convey the exact intention of the parties. Do not use half sentences, as these can be ambiguous. Look out for contradictions. And if the sale is subject to a buyer selling first, check the guarantee clause

If it is agreed that the buyer will pay commission, warn the buyer that transfer duty will have to be added to that because it forms part of the purchase price.

(Source: Institute of Estate Agents of South Africa)

and manner of payment. Can the buyer set a guarantee within 14 days of demand, for example, if he must first sell his house?

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BY ANGELIQUE REDMOND

2015/04/23 3:57 PM

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THE WOES OF THE CPD INITIATIVE R E G A R D LES S O F H OW AG EN T S F EEL A B O U T I T, T H E C P D P RO G R A M M E I S H ER E T O S TAY

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The news that agents were going to have to fork out thousands of rand to take part in the EAAB’s continuing professional development (CPD) programme broke just before Christmas, and judging by the reaction of agents on social media, the news put a serious damper on their festive cheer. To be fair, it’s important to note that there is nothing new about these sorts of programmes. Various professional bodies around the country have implemented compulsory ongoing educational initiatives aimed at keeping their members up to date with changes in their fields. Agents’ main concern is whether the EAAB is able to establish its own platform to roll out the programme and the costs associated with this decision. As things stand, agents and principals who are in possession of a Fidelity Fund Certificate (FFC) will have to pay R2,000 and R2,500 a year, respectively, to attend various courses. These courses will earn the agents CPD points, which will be awarded when they attend a training course that has been accredited by the EAAB. According to the EAAB’s website, the required 20 CPD points are made up of five non-verifiable and 15 verifiable CPD points in 2015. Not surprisingly, the CPD was the main topic under discussion at the various Rebosa road shows that were held around the country earlier this year. Principals’ reactions at the Durban event ranged from anger to outright disgust at the very idea of handing yet more money to an organisation that doesn’t have the best reputation for keeping its administrative affairs current. The general feeling was that although the initiative was, on the face of things, a good idea, the ability of the EAAB to actually roll out a programme of this magnitude was questionable. Principals are not the only ones getting hot under the collar. Jeanne van Jaarsveldt, president of IEASA, said agents took exception to the compulsory payments, and the fact that the implementation was undertaken without any consultation with the industry was fuelling frustrations. He said he believed the roll-out of a structured CPD learner programme was possible and the EAAB’s intentions were honourable, but says the institute was concerned about whether this has been carefully thought through and if any attention has been given to the road forward. When asked whether agents believed the EAAB was in a position to implement something of this nature, he said: “At a recent EAAB road

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show in Durban, the question was raised as to what the EAAB plans are

bring down the cost per person dramatically. A good argument can be

for the CPD roll-out of verifiable points and the question could not been

made that these courses can be presented at half of the amount currently

answered. I believe this is the main stumbling block.

being charged.”

“Through this process the EAAB is raising in excess of R70m with regard

When approached for comment on the CPD issue, Johan Gouws, COO

to the roll out of the CPD programme. The institute’s concern is that the

of Keller Williams Realty said that the group was all for the development

board is fundamentally using a big stick by threatening to withhold FFCs if

of anybody who was exposed to clients in the real estate process and was

the fees are not paid. In our opinion, this is totally uncalled for, given that

in full support of the prescribed programme. “Our reservations regarding

the purpose of an FFC is to protect buyers and sellers from unscrupulous

the programme are linked to our experience of the EAAB, which is

agents by allowing them to claim from the fund.”

notoriously inefficient. My suggestion is that the EAAB first upgrade its own staff and management to a level of acceptable service delivery before

The fact that agents are being asked to hand over a considerable amount

taking on another project at a time when estate agents are already feeling

of money without having a clear understanding of what they will be

ostracised by their own industry’s body of control.”

getting in return has also angered them. The EEAB had not secured trainers prior to making the announcement, and the pay-now-train-later

A large number of agents have voiced their concerns regarding what sort

approach is understandably controversial, given the difficulties the EAAB

of training will be offered. Questions such as: will the training cover all

has had in the past.

aspects of the real estate arena including courses for rental agents and managing agents? Will there be specialised courses for principals, or will

Although the IEASA accepts that the EAAB is the only institution that could

they be required to attend the same courses as their agents?

implement and administer the CPD programme, it believes that the process being employed is not ideal and has the potential to fail if not monitored

Grant Gavin, who heads RE/MAX Panache says: “The training will

with care.

need to add value to agents in terms of making them more productive as estate agents, and more professional in terms of meeting the needs

Given the lack of information, Rebosa has voiced its concerns and it

of their clients. It also needs to assist them with their overall professional

makes a valid point: at time of writing there was very little information

development as estate agents. To date, we have not seen any course

about the courses the EAAB plans to present. “It is quite extraordinary that

outline or course material and therefore our most pressing concern is that

a whole programme can be announced without any content except the

training content may be pushed out quickly to meet a tight deadline rather

cost and penalty for non-compliance,” said Rebosa Chief Executive Jan

than the needs of the agents.”

le Roux. “The vast majority of the industry is excited and positive about learning opportunities and has absolutely no objection to the principle on

Perhaps the issue that is causing the most consternation is the fact that the

which the programme is based. However, no consultation of any nature

EAAB is seemingly turning a blind eye to those who operate illegally in

has taken place. Good practice dictates that industry players should at

the industry. One agent, who asked to remain anonymous, said that he

least be consulted. Such consultation would inevitably lead to a better

believed that the EAAB was in effect penalising those who elect to comply

understanding, a more positive response and more relevant content.”

with the law and who are in possession of valid FFCs. That the EAAB does very little to clamp down on illegal operators forces those who had

Rebosa has also raised concerns regarding the cost of the programme.

already completed the legally required educational requirements, such

“The cost has been communicated at R2,000 plus VAT per agent and

as the NQF 4, to undergo yet more compulsory training, meant, in his

R2,500 plus VAT per principal for the first year of the three-year cycle.

opinion, that the EAAB was acting in bad faith. “Why doesn’t the board

“No explanation was given for the differentiation in cost, and cognisance

get everyone on the same page as far as training goes before it starts to

must be taken of the fact that many ‘principals’ are agents, that is, sole

implement yet another costly exercise?”

proprietors. It is hard to understand why such an agent/principal must pay a higher fee for the same education that an agent employed by

Rebosa has reiterated that the EAAB is adamant that the CPD programme

a principal would be paying. Unfortunately, because no information

will go ahead despite the misgivings of just about everyone in the real

regarding the content of the courses has been made available, this cannot

estate sector. Education is key to any profession, and if the CPD is properly

be put into perspective at the moment.”

implemented, South African agents will be among the most educated in their field. The jury is out.

The cost is not the organisation’s only misgivings: “Whereas it is true that many other professions have similar programmes and very often at a higher cost, it should be noted that the economic scale of presenting these courses to approximately 38,000 estate agents must and should

PP May/June_Subbed_V3.indd 42

BY LEA JACOBS

2015/04/23 3:57 PM

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PP May/June_Subbed_V3.indd 43

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PROPERTY PROFESSIONAL

NEW AGENTS ON THE BLOCK like and trust me enough to market their property in a professional way. The most challenging aspect of the job is to keep canvassing until I have enough appointments for potential sellers and, once I have received

GLYNIS CAMBELL

the mandate, to find a willing and able purchaser who has been

LE A P F RO G P RO P ERT Y G RO U P

until registration.

prequalified to buy and then to get the bond grant and keep the contact

WHAT CHARACTERISTICS, IN YOUR OPINION, MAKE FOR A GREAT ESTATE AGENT/BROKER AND WHY? WHY DID YOU DECIDE TO PURSUE A CAREER IN PROPERTY?

The characteristics that make a great estate agent/broker are integrity

I decided to pursue a career in property as I am a very self-motivated

– doing what you say you will do. To be real and honest and to listen.

person who works hard and has a love for people, and property is

To be able to work the hours required and to be focused and consistent

all about people. I had been counselling for years and felt that with

and to care about people. If you have these characteristics, sellers and

my understanding of people, I could make a difference by helping the

buyers will trust you and you will develop a referral base and enhance

sellers I meet find a suitable purchaser, and to establish the needs of the

the reputation of the estate agency.

purchasers to help them to find the perfect home they required. And by doing so, I would be able to earn the finances I needed.

WHAT ARE SOME OF YOUR CAREER GOALS? My career goals are to help to establish the Leapfrog brand in my area by

WHAT DO YOU FIND TO BE THE MOST ENJOYABLE AND THE MOST

having a large percentage share of sales in my canvassing area; to meet

CHALLENGING ASPECTS OF THE JOB?

my target of the amount of sales I need to do every month and on a yearly

The most enjoyable aspect of the job is meeting the different types of

basis; to obtain the required number of mandates needed to do the sales;

people and identifying their needs, and to then be able to have them

and to try to be the sales agent of the month on a regular basis.

ANTHONY MAHLANGU S EEF F P RO P ERT I ES

assisting buyers and sellers to achieve a happy transaction. I find price counselling a challenge, as most sellers seem to feel their property is worth more than the market will pay. However, I find the tools available on the internet very helpful in this regard. WHAT CHARACTERISTICS, IN YOUR OPINION, MAKE FOR A GREAT ESTATE AGENT/BROKER AND WHY? In my opinion, to make it in the property industry one has to be very self-

WHY DID YOU DECIDE TO PURSUE A CAREER IN PROPERTY?

motivated, enthusiastic and emotionally strong. Always be positive and

I became a real estate agent after much deliberation. It was a big

keep doing the basics. The job can be lonely and tough, but with the

decision to give up a full-time job for a commission-earning situation.

right attitude it can be very rewarding.

However, I made the move, as I wanted to be in charge of my own career and my earnings. I have never looked back.

WHAT ARE SOME OF YOUR CAREER GOALS? My goal is to be the agent of choice in the areas I work in, to increase

WHAT DO YOU FIND TO BE THE MOST ENJOYABLE AND THE MOST

my market share to 25% in the short term and to reach Achiever status

CHALLENGING ASPECTS OF THE JOB?

within my company. I would like to further my studies – property law is

I really enjoy interacting with people and get great satisfaction from

something that interests me very much.

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PROPERTY PRACTITIONERS BILL

Fast facts about Rebosa Rebosa (the Real Estate Business Owners of South Africa) was established for the real estate industry – specifically, the business owners and principals in the industry. But what exactly is it? We spoke to Jan le Roux, CE of Rebosa, to get all your questions answered. Why join Rebosa?

What kind of challenges will Rebosa tackle?

The residential property sector in South Africa contributes a staggering R123,8 billion to the economy – we need a collective voice to address our specific concerns and ensure they are dealt with. Rebosa is that voice for the real estate industry.

The major concern in the current Act is the issuing of Fidelity Fund Certificates (FFCs). The administrative issues in the issuing of FFCs mean that agents could forfeit their commission entirely. REBOSA currently interacts and follows up on outstanding FFCs. This is just one of many ways we work together to achieve great things.

Why do we need an organisation to do it? Transformation in any industry is inevitable, but if we want the real estate industry to grow and prosper, that transformation process must be handled smoothly, through all the right channels. As a united front, Rebosa can interact with all the stakeholders in the real estate industry to ensure we all get the results we want.

Why join now? In 2015, the Property Practitioners Bill will replace the current Estate Agency Affairs Act of 1976. But there are serious flaws in the legislation that we need to fix – fast. This can only be done if a critical mass of real estate agents unite and use their collective power.

“

To be effective, we need the vast majority of business owners to become members Jan le Roux, CE Rebosa

”

Why do we need you? The real estate industry is made up of big and many, many small businesses, all doing what we do best – selling property. But if we want to be truly representative, we need to ensure all our voices are heard. We need to know what the issues are and how best to fix them. And the only way to do that is by having you on board. Every one of you.

How much does it cost? Only R20 (excl VAT) per registered estate agent per month.

How to join 1 - Go to www.rebosa.co.za 2 - Complete your membership application 3 - Or contact Dee on info@rebosa.co.za 4 - Membership fee is only R20 excl VAT multiplied by the number of registered estate agents (inclusive of Principals) per office per month 5 - For queries relating to FFCs contact Fiona on fiona.rebosa@gmail.com

Together we can achieve what individually we cannot!

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because their dreams are coming true and I have helped them to find the home that they have been searching for. The most challenging part of the

HANNES SEYFFERT EN G EL & VÖ LK ER S

job for me is having to deal with dishonest people sometimes – sellers, buyers and agents alike. But I suppose that one will have to deal with this kind of person in every industry. WHAT CHARACTERISTICS, IN YOUR OPINION, MAKE FOR A GREAT ESTATE AGENT/BROKER AND WHY? The characteristics of a great estate agent, in my opinion, are honesty,

WHY DID YOU DECIDE TO PURSUE A CAREER IN PROPERTY?

reliability and a love for people. If you give people a fair deal they will

I never really decided to pursue a career in property; it happened by

come back the next time. You show your clients that you are professional

chance. As a young man looking for work I got an opportunity to start

by being reliable. And you have to love people, because that love urges

working as a valuer-in-training. My mentor taught me that although

you to want to help them realise their dreams.

property is fixed, the property market lives and moves and breathes. I suppose you could say that his passion for property rubbed off on me.

WHAT ARE SOME OF YOUR CAREER GOALS? My main goal at the moment is to increase our exposure and establish

WHAT DO YOU FIND TO BE THE MOST ENJOYABLE AND THE MOST

Engel & Völkers as the go-to agency in Sunninghill. When people in

CHALLENGING ASPECTS OF THE JOB?

Sunninghill think of buying or selling property, they must think Engel

For me the most enjoyable part of my job is the joy that I bring to sellers

& Völkers. During the next year we aim to set up a satellite office in

and buyers when the deal is done. The sellers are excited because

Sunninghill, which will increase our exposure and bring us closer to this

the deal is done and they can start looking for something else, or they

goal. This is not going to be an easy task as we are new to the area, but

have the money in the bank. The buyers, on the other hand, are excited

watch this space.

have done everything you can but you lose a listing for a reason beyond

CANDICE HUGHES R AW S O N P RO P ERT I ES

your control. It’s difficult to keep things level and not on a roller coaster; you have to remind yourself to focus on the positives, which always outweigh the negatives, and not to give up. WHAT CHARACTERISTICS, IN YOUR OPINION, MAKE FOR A GREAT ESTATE AGENT/BROKER AND WHY? I think consistency is vital: the advice given was to find your own way and stick to it – don’t try to be someone you are not – and that was

WHY DID YOU DECIDE TO PURSUE A CAREER IN PROPERTY?

priceless. Focus on the relationships and keep building them. People are

I was ready for a career change, and taking the skills I had I wanted

likely to sell at some point and you want them to turn to you because

to try something new. I’ve always been interested in property, and this

they trust you and they have a good relationship with you. Don’t focus

passion, as well as being a people person, seemed to be a great fit for

on getting a listing, as you lose sight of the bigger picture. Be open

being an agent, and a challenge.

and try everything. If you aren’t trying, you aren’t working, and in this industry you have to be working all the time. Be a sponge, listen to other

WHAT DO YOU FIND TO BE THE MOST ENJOYABLE AND THE MOST

agents and ask questions – knowledge is critical. Focus on listening to

CHALLENGING ASPECTS OF THE JOB?

people: if you gather information you can do a better job and address

I think the relationships I build and the constant learning and improving

their needs. Lastly, always smile – it is worth a thousand words.

is what I thrive on – and, of course, seeing some beautiful homes. Also, when you know you have gone above and beyond to help someone,

WHAT ARE SOME OF YOUR CAREER GOALS?

and standing out for it – when you do something that is out of the

To be known as an agent who does an exceptional job, always. To be

ordinary agent’s way and it is acknowledged and appreciated. There

the agent of choice because I’ve been personally chosen or through a

obviously are challenges and disappointments, for example, when you

referral. And to be a legend in my area.

PP May/June_Subbed_V3.indd 46

2015/04/23 3:57 PM

Leapfrog Franchises to be taken to the next level At Leapfrog we've always placed a strong emphasis on professionalism, training and growth. To further this end we've appointed a highly skilled Franchise Development Manager, Deon van Zyl. Deon, a qualified CA(SA), has an impressive background in financial management and good experience when it comes to improving businesses' performance. “Deon is a young guy with plenty of passion as well as entrepreneurial expertise and we're very excited to have him on board”, says Bruce Swain, MD of Leapfrog Property Group. Van Zyl believes that “Leapfrog has achieved a lot in the past 7 years. The company has expanded over South Africa and it is a household name that people are very comfortable

LEAPFROG

with. However there is still a lot of scope for growth in the residential property market, I relish the opportunity to join a company that is innovative and precise in its growth policies”.

A Man with a Plan Deon shares that his goal for 2015 is to expand Leapfrog as a whole; “Leapfrog has top agents and clients have given us a lot of positive feedback. We therefore have started to expand in areas where we had a small market share. We are dealing with many franchise queries and have started to set up franchise operations, giving prospective owners the assistance and guidance to start up a business under a very strong national brand”. As Franchise Development Manager Deon will not only be working on bringing new franchisees on board, but also focusing on helping existing franchisees to improve productivity and profitability in their businesses. While van Zyl will be based in Gauteng he will be travelling and meeting with Leapfroggers around the country. In the meantime feel free to contact him at

082 858 7222 / deon.vanzyl@leapfrog.co.za

“Effort only fully releases its reward after a person refuses to quit”.

Move on Move up

Napoleon Hill www.leapfrog.co.za

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Page 48: F I N A N C E A N D F I G U R ES

HOW DO HOME LOANS MEASURE UP? P RO P ERT Y P RO F ES S I O N A L H A S G AT H ER ED I N F O R M AT I O N F RO M B E T T ER LI F E H O M E L OA N S O N T H E D EM A N D F O R R ES I D EN T I A L P RO P ERT Y

When comparing the BetterLife Home Loans data for the 12 months to end February 2015, we see that the demand for residential property in South Africa continues to hold up well, despite the slow rate of economic growth in the country.

GENERAL AVERAGE HOME PRICE ROSE

5.89%

AVERAGE DEPOSIT REQUIRED ROSE

16.96%

R939,000 17.12 % FIRST-TIME BUYERS BOND APPLICATIONS DECLINED

ACCOUNTABLE FOR

31%

AVERAGE HOME PRICE ROSE

OF TOTAL VALUE OF LOANS GRANTED

4.85%

AVERAGE DEPOSIT REQUIRED ROSE

8% TO

6.4% R654,000 8.52% On a lighter note, homebuyers in middle-incomeÂ households will be granted relief on transfer duties. From 1 March 2015 no transfer duty will be payable on property acquired up to R750,000, a R150,000 increase above the previous threshold. ( Sour c e : B e t te rL i f e Ho me L oa n s)

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STRONG RELATIONSHIPS ARE BUILT ON SOLID FOUNDATIONS We know the importance of relationships. Working together allows us to understand your needs so we can offer the best real estate solutions for you. With over 152 years of banking experience, this is how we’re moving real estate forward.

They call it Africa. We call it home. www.standardbank.co.za/cib

Authorised financial services and registered credit provider (NCRCP15). The Standard Bank of South Africa Limited (Reg. No. 1962/000738/06). SBSA 204201 – 04/15 Moving Forward is a trademark of The Standard Bank of South Africa Limited

PP May/June_Subbed_V3.indd 49

2015/04/24 9:34 AM

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PROPERTY PROFESSIONAL

TOP PERFORMING AGENTS WHAT IS THE MOST VITAL BUSINESS TOOL THAT ESTATE AGENTS SHOULD HAVE AT THEIR DISPOSAL IN TODAY’S MARKET AND WHY?

BARBARA ROGERS PA M G O LD I N G P RO P ERT I ES

Information and data and the procurement thereof, and face time with clients, as the property industry is about relationships. DO YOU REMEMBER THE FIRST PROPERTY YOU SOLD? PLEASE TELL US ABOUT IT. The first property I sold was with the help of my mentor. It was a very charming “bungalow-style” home in Camps Bay that belonged to an elderly lady who had lived there for 45 years. On my first “show day”

WHAT ARE YOUR TOP THREE SECRETS TO SUCCESS?

a German lady walked in and fell in love with the property. She had

Communication; understanding my clients; and timing – when to reach

decided only the day before to purchase and this property was the first

out and when to let go.

she had seen. She thought she could not buy the first property, and I told

WHAT IS THE ONE THING YOU WISH SOMEONE HAD TAUGHT YOU OR TOLD

her to go away and think about it. Two days later she signed the offer.

YOU WHEN YOU FIRST STARTED OUT IN PROPERTY AND WHY?

WHAT ADVICE WOULD YOU GIVE TO NEW KIDS ON THE BLOCK ABOUT

I was in the very fortunate position to have a fantastic mentor who taught

MAKING A SUCCESS IN THEIR CAREER IN PROPERTY?

me all the basics of real estate. However, only with time and experience

Find a good mentor and learn from them – work, be dedicated and

did this knowledge become my own and I developed further.

be sincere.

WHAT IS THE MOST VITAL TOOL THAT ESTATE AGENTS SHOULD HAVE AT

CJ VOGEL JAW I TZ P RO P ERT I ES

THEIR DISPOSAL IN TODAY’S MARKET AND WHY? Today’s real estate agents require far more than a fax machine and Filofax to perform day-to-day operations. The tools and apps needed for today’s agents are all about information and how that information is gathered, communicated and delivered to clients and other real estate professionals. Time is of the essence and access to information is vital.

WHAT ARE YOUR TOP THREE SECRETS TO SUCCESS?

DO YOU REMEMBER THE FIRST PROPERTY YOU SOLD?

To be persistent and hard working – this means working long hours, but

PLEASE TELL US ABOUT IT.

being passionate about something you love isn’t really work; to deal

After three months of not succeeding and almost giving up my real

and communicate with people effectively – I have grown my network by

estate career, the big moment finally came. I was so nervous signing

being open with people and treating them fairly; to always be positive –

that offer to purchase that I had difficulty holding the pen because my

think success, not failure. Positive things happen to positive people.

palms were sweating. The sympathetic purchaser noticed and put me at ease. Fifteen years later, that same property is still being managed

WHAT IS THE ONE THING YOU WISH SOMEONE HAD TAUGHT OR TOLD YOU

by my rental division.

WHEN YOU FIRST STARTED OUT IN PROPERTY AND WHY? Never stop closing deals. Networking comes naturally to me and this

WHAT ADVICE WOULD YOU GIVE TO NEW KIDS ON THE BLOCK ABOUT

went a long way towards building my company. But simply meeting

MAKING A SUCCESS IN THEIR CAREER IN PROPERTY?

people, growing contacts and building relationships, on their own, do

Always be willing to try and try again; get your priorities right; use

not grow a business. Being complacent, lazy and stopping closing will

resources wisely; stay focused; develop good relationships; and never

never make money.

be complacent.

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Page 52: P RO P ERT Y P RO F ES S I O N A L T O P P ER F O R M I N G AG EN T S

CHERISE ANSARA

WHAT IS THE MOST VITAL BUSINESS TOOL THAT ESTATE AGENTS SHOULD

EN G EL & VÖ LK ER S

The most vital business tool to have is the knowledge of the market you

HAVE AT THEIR DISPOSAL IN TODAY’S MARKET AND WHY? are selling in. Know your area and know your clients. If you have this one tool, you are set. DO YOU REMEMBER THE FIRST PROPERTY YOU SOLD?

WHAT ARE YOUR TOP THREE SECRETS TO SUCCESS?

PLEASE TELL US ABOUT IT.

Always stay in contact with your clients; strive to be different; and never

Yes. The first property I sold was listed on a Thursday and sold on a

procrastinate – do what you have to do today to ensure sales tomorrow.

Saturday to the first person who viewed it. I did hardly any work on the property and was misled into thinking that this job was easy.

WHAT IS THE ONE THING YOU WISH SOMEONE HAD TAUGHT YOU OR TOLD YOU WHEN YOU FIRST STARTED OUT IN PROPERTY AND WHY?

WHAT ADVICE WOULD YOU GIVE TO NEW KIDS ON THE BLOCK ABOUT

I honestly wish someone had told me exactly how much work was

MAKING A SUCCESS IN THEIR CAREER IN PROPERTY?

involved in this job. I don’t think people wanting to get into this industry

Don’t ever give up. Keep going and do your best every day, even on

realise how hard-working they need to be.

slow days. The rewards will come.

WHAT IS THE MOST VITAL BUSINESS TOOL THAT ESTATE AGENTS SHOULD HAVE AT

LEMANDA ENGELBRECHT S EEF F P RO P ERT I ES

THEIR DISPOSAL IN TODAY’S MARKET AND WHY? To know your market and your stock. You can only begin to have an effective sale after you have matched a prospective buyer’s need with the matching stock you have in store. DO YOU REMEMBER THE FIRST PROPERTY YOU SOLD? PLEASE TELL US ABOUT IT. Yes – a small but very neat little house situated in Retief Street, Secunda. The sale was successful mainly because the property was correctly priced for the market at that time. Securing the bond for this

WHAT ARE YOUR TOP THREE SECRETS TO SUCCESS?

transaction took one month, followed by registration a very anxious

Continuous passion, integrity and motivation.

three months later.

WHAT IS THE ONE THING YOU WISH SOMEONE HAD TAUGHT YOU OR TOLD YOU WHEN YOU FIRST STARTED OUT IN PROPERTY AND WHY? That from then on my time would not be my own! To be a successful agent you must be willing to place your customers’ needs before your own at all times, and this makes time management very unpredictable.

NUMBERS TO KNOW N U M B ER S T O K N OW I S A F E AT U R E T H AT CATA L O G U ES T H E M O S T N O TA B LE , Q U I R K Y A N D S U R P R I S I N G S TAT I S T I C S I N S O U T H A F R I CA . S EE T H I S I S S U E ’ S CO U N T D OW N …

PP May/June_Subbed_V3.indd 52

WHAT ADVICE WOULD YOU GIVE TO NEW KIDS ON THE BLOCK ABOUT MAKING A SUCCESS IN THEIR CAREER IN PROPERTY? Work hard, do long hours and place your customers’ needs before your own. To summarise: dedication, dedication, dedication.

The Knight Frank Wealth Report 2015, produced in association with Standard Bank Wealth and Investment, says those with at least $30 million in assets in Africa will increase by 59% over the next 10 years. The research findings put the growth of Nigeria’s ultra-high-net-worth individuals by 2024 at 90%, but the top spot for Africa is reserved for the Ivory Coast at 119%. (Source: SA Commercial Property News, 18 March 2015, “Ranks of super-rich Africans on the rise”)

2015/04/23 3:57 PM

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Page 54: T E C H T O O LK I T

TECH TOOLKIT WhatsApp calling AVAILABLE FROM: free for Android users – download the app from

the official WhatsApp website

LOVE IT: free voice-calling on instant-messaging service WhatsApp is

now available to all Android users. Previously, WhatsApp voice calling was only available to users who were invited to use the calling service. However, the latest update of the WhatsApp app, version 2.12.19, allows users to use the service without needing an invite. WhatsApp has more than 700 million users around the world, and now with the added feature of free voice-calling the app will now become even more popular. IN A NUTSHELL: free voice calls are certainly going to make a huge

impact on the wallets of all estate agents, who are known for spending large amounts of time (and money) on their phones. *All prices approximate.

Any.Do app AVAILABLE FROM: free on iOS, Android and Google Chrome LOVE IT: we live such demanding lives that trying to remember both our

personal and work to-do lists can be challenging, to say the least. With the Any.Do web app you can easily sync your tasks from your mobile

to your home computer. The app has a daily planner and allows you to upload files, set reminders, share and delegate – just to mention a few of its functions. IN A NUTSHELL: the app helps you stay on top of things with your

mobile device – a must for busy estate agents.

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Page 48: T E C H T O O LK I T

CamCard app AVAILABLE FROM: free to download from the

Windows Phone or iTunes stores

LOVE IT: business cards are just as important

today as they ever were. The only problem is,

what do we do with them? For busy estate agents who donâ&#x20AC;&#x2122;t have the time to organise or carry around their ever-growing Rolodex of business cards, this app is ideal. With CamCard you are able to scan and read card information with your phone camera and sync the data across smartphones, tablets and the web. IN A NUTSHELL: the convenience of this clever

little app, particularly its web component, make it a convincing choice for your business card library.

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the iPhone 6 battery, the reality is that if you are on your phone all day, the battery is never going to last as long as you would like it to. This is where the Lenmar Maven iPhone 6 battery case comes into play. The internal battery can charge your phone on the go with 3 000mAh of power to provide a 110% charge. At 96g, it is lighter than your average case and great to hold with its rounded edges and a soft-touch finish. IN A NUTSHELL: the Lenmar Maven iPhone 6 battery case more than

doubles your battery life while protecting your iPhone, making this a great buy.

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Page 56: D EV EL O P M EN T U P DAT E

DEVELOPMENT UPDATE

MARKET BUYING INTO STEYN CITY’S PEDESTRIANISED LIFESTYLE The interest shown in the newly launched Steyn City Lifestyle Resort has seen 50% of the first freehold stands released in phase one and 90% of the 93 flats released in the new show village being sold at the weekend of 14–15 March 2015. Sales and Marketing Director Seamus Moore says: “This equates to R700m in land and build sales in the opening week alone, revealing just how strong market appetite is for this first-of-its-kind property development, where pedestrianised living is at the fore of the design and the public has access to ready-built product and can view the infrastructure investment up front.”

more than endorsed our unique offering of

“The market has now spoken and more than endorsed our unique offering of pedestrian-style living” Giuseppe Plumari, CEO, Steyn City Properties

pedestrian-style living.” Despite the almost overwhelming initial response, Plumari reports that Steyn City will continue to exceed potential homeowners’ expectations by quickly responding to the attention it has received. To achieve this, the Steyn City Properties management team is analysing the data from the sales achieved during the opening weekend, the outcome of which will determine how best to structure future phases of development to meet the demand. This will see the announcement of

Steyn City Properties CEO Giuseppe Plumari

new off-plan offerings in the next few weeks to

adds: “The market has now spoken and

potential buyers and investors.

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Page 58: D EV EL O P M EN T U P DAT E

NEW DEVELOPMENT FLOURISHING IN BIG-TICKET SUBURBS

experiencing a peaceful ‘country’ atmosphere.” However, they note, a shortage of homes for sale in these areas has been a constraint on

New development is changing the face of several of Joburg’s heritage

purchasing until recently, with existing owners being reluctant to sell.

suburbs, making them even more appealing to high-end buyers. In

“In addition, many of the original homes are quite dated and difficult to

Atholl, Inanda and Illovo, land is in demand for the development

renovate or retrofit with the green features and energy-saving equipment

of upmarket cluster homes and boutique estates, says Sotheby’s

now favoured by so many high-end buyers.” Although there is quite a

International Realty area specialists Arlene and Leon Carroll. Many

lot of land still available for new development, it is relatively expensive

homebuyers buying older homes on a large stand with the intention of

compared to land in less central areas, because of stock shortages.”

demolishing them and rebuilding. These buyers form a very mixed group, the agents say, ranging from “Position is definitely the key driver of demand in these areas,” they

top executives and professionals who want to live close to Sandton, to

say, “because they are so central to the Sandton, Rosebank and

families that are upgrading to seniors that are downscaling.

Johannesburg business centres and close to the city’s best shopping venues, top schools, the Gautrain network and OR Tambo International.

There is no doubt, however, about the willingness of any of these buyers to pay a premium to live in Atholl, Illovo or Inanda. “The entry-level for

“Homes here have clearly become increasingly sought after in recent

these suburbs is between R4m and R5m, but the highest demand at the

years as resistance to long commutes in heavy traffic has grown and

moment is for houses and cluster homes in the R6m to R8m price range,

the tide of decentralisation to luxury estates on the outskirts of the city

while homes in secure nodes and luxury clusters are selling well at prices

has been reversed. Here one can be close to everything while still

from R12m to R25m, depending on their age, position and size.”

based Collins Group’s property holdings outside South Africa. The first of these greenfield projects is a R500m residential development now under construction in Maputo, Mozambique. It comprises 18 blocks of flats, of which the US embassy will lease 34 units for 10 years. The only other tenant is the Anadarko Petroleum Corporation of Texas, which is exploring natural gas reservoirs off the coast of Mozambique. It has entered into eight-year leases for 35 apartments. Render of Dunes Mall, a R480m regional shopping complex, will be the second of its kind in Namibia. Safland is developing it on behalf of a Tradehold-led consortium in Walvis Bay, a city that is fast turning into a regional export hub

Joint CEO Friedrich Esterhuyse said that Tradehold, which historically has been almost exclusively invested in the UK property market, intended to grow its African footprint via its wholly owned subsidiary, Tradehold Africa. It would at the same time maintain its

TRADEHOLD GROWING ITS PROPERTY BASE IN AFRICA

momentum in the UK.

Work has started on a R480m regional shopping centre that Safland

Said Esterhuyse: “We have as a base a portfolio of properties in

is developing for a Tradehold-led consortium in the harbour town of

Namibia, Zambia, Botswana and Mozambique. Initially, we’ll focus

Walvis Bay. To be known as Dunes Mall, the centre will form the first

on those areas where we already have a presence, but in time we

phase of a mixed-use commercial area. The consortium is also erecting

intend expanding our operations to some of Africa’s other fast-growing

a distribution warehouse complex close to Dunes Mall. The mall, which

economies. In Namibia in particular we acquired two shopping centres

will include about 80 shops, is the second greenfield project undertaken

from the Collins Group, in Rundu in the densely populated north of the

by Tradehold since its acquisition last year of most of KwaZulu-Natal-

country, and in Windhoek.”

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Safland CEO Kallie van der Merwe said that in addition to the existing

Esterhuyse said Tradehold was keen to enter into joint ventures with

portfolio, his company was managing a R2.2bn development pipeline,

appropriate landowners to meet its growth objectives. “This is what we

mainly retail, for the Tradehold consortium. “From our base in Namibia

are doing in the case of our Maputo project, which is being developed

we are also investigating opportunities elsewhere on the continent,” said

in partnership with a local company, Cognis 1 Limitada.” Safland will

Van Der Merwe.

manage the existing Namibian portfolio and any new developments.

WESTBROOK MEGA-DEVELOPMENT LAUNCHES IN PORT ELIZABETH The Amdec Group, one of the country’s largest independent property

Supporting New Urbanism principles, the heart of Westbrook will

developers and investors, is transforming an undeveloped swath

feature a 160,000m2 mixed-use node comprising a leading medical

of land in Port Elizabeth into a town-meets-country neighbourhood

facility, a comprehensive retail offering and a business park with more

the likes of which has never before been seen in the Nelson

than 40,000m2 of premium office and commercial space. Says Bedeker:

Mandela Bay area in the Eastern Cape.

“The suburb will include 30ha of open space that ideally lends itself to expansive parks,

Located 12km west of the Port Elizabeth CBD, the R7bn development will transform a formerly derelict and isolated 128ha pocket of the city and will be conveniently situated on a main arterial route north of the Old Cape Road, near the newly developed Baywest Mall. Dubbed Westbrook, the new neighbourhood will feature many watercourses and will comprise 3,500 homes spread across nine residential villages, each of which will offer a variety of houses, flats and townhouses. The neighbourhood will also incorporate a retirement lifestyle estate and the already established Curro private school. “When you create a suburb from scratch,” says

“The suburb will include 30ha of open space that ideally lends itself to expansive parks, picturesque walkways, bicycle paths and children’s play areas – the very things that promise to make this suburb so unique” Cobus Bedeker, development director, Amdec

Amdec Development Director Cobus Bedeker, “you’re able to forge a 21st-century mixed-

picturesque walkways, bicycle paths and children’s play areas – the very things that promise to make this suburb so unique.” About 80% of the bulk infrastructure and services on this development have already been established, and nine show houses forming part of the first residential phase, The Ridge, have been completed and are available for viewing. Designed by architect Lance Kinnear, these homes reflect an attractive contemporary village style. Each will have three bedrooms and two bathrooms and will range in price from R1m to R1.5m. Four of the nine planned residential estates, including The Ridge, will be launched over the next 12 months. Each will cater to a wide spectrum of real estate needs, with house

use community to perfectly create appropriately scaled homes for

prices ranging from R800,000 to R2m. The Westbrook village retail

young and old alike, and to determine what public spaces they want

centre development phase will also be launched soon, and the Curro

to spend time in and the amenities that are important to them.”

school will expand, to provide schooling from preprimary to matric.

The average nominal value of homes in each of the middleNUMBERS TO KNOW

R880,000–R1.85M

segment categories in January 2015 was: • small homes (80m2–140m2) – R880,000 • medium-size homes (141m2–220m2) – R1.204m • large homes (221m2–400m2): R1.85m (Source: Fin24, 6 February 2015, “Middle-segment house price growth continues”)

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2015/04/23 3:57 PM

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Page 62: D EV EL O P M EN T U P DAT E

Render of the Oval Sites, which are zoned for 17 storeys of mixed-use buildings

LAST STANDS UP FOR DEVELOPMENT AT UMHLANGA RIDGE TOWN CENTRE The two Oval Sites in the upmarket Umhlanga Ridge Town Centre

bold architecture can be used to create exemplary buildings. Should

are being released for development by Tongaat Hulett Developments,

the sites be acquired by separate purchasers, the design proposals will need to complement each other.”

the property arm of Tongaat Hulett. Located at the heart of the business/residential/ leisure hub, these last remaining sites account for 30,000m of the 640,000m within the mixed2

use Umhlanga Ridge Town Centre, excluding Gateway, and given their proximity to each other they may well attract a single developer. “The Oval Sites are zoned for 17 storeys of mixed-use buildings, so they offer potential for truly iconic structures,” explains Andile Mnguni, development executive at Tongaat Hulett Developments. “The closest in height comparison to

“The sites have road frontages on all sides, meaning that the structures will be viewable from all angles. This uninterrupted panorama implies that bold architecture can be used to create exemplary buildings”

“The Oval Sites will boast sea views from

1km away and the proposed strong transport links, the buildings on the Oval Sites are likely to appeal to diverse occupants. King Shaka International Airport is a short 17km away, and the sites have been earmarked to include a station on the Go Durban route, eThekwini’s integrated rapid public transport network. Links to the Durban city centre in the south as well as to Bridge City in the west have been incorporated into the plans as well. “All bulk infrastructure is in place, so the stands are ready to be connected by the developer

that is a 12-storey residential zoning, with the balance between four and eight storeys.”

With the Gateway Theatre of Shopping less than

Andile Mnguni, development executive, Tongaat Hulett Developments

the top floors. The sites have road frontages

to the network. An established management association attends to the common interests of its members in the Umhlanga Ridge Town Centre, ensuring that the local environs

on all sides,” notes Mnguni, “meaning that the structures will be

are well looked after,“ Mnguni says. “This is a highly strategic

viewable from all angles. This uninterrupted panorama implies that

location and it represents a matchless investment opportunity.”

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Page 64: WO R D O N T H E S T R EE T

WORD ON THE STREET “Lekgotla has resolved that there should be a ceiling on land ownership of a maximum 12,000 hectares, or two farms, for both natural and all forms of legal persons… Land ownership by foreign nationals will also be prohibited” Gwede Mantashe, secretary general, ANC (Fin24,

28 January 2015: “Cap land ownership – ANC”)

“The continued above-inflation growth in house prices is regarded as a relatively good performance against the background of persistent challenging economic conditions and low confidence levels”

“Africa is one of the regions of the world with huge potential to grow its wealth, driven by a rising middle class and the increased success of many businesses. Importantly, reforms in many countries are being expedited, infrastructure is happening at a startling pace and foreign investors are noticing”

Jacques du Toit, property analyst, Absa Home Loans

Margaret Nienaber, global chief executive, Standard Bank Wealth and Investment

price growth continues”)

on the African continent set to rise”)

(Source: Fin24, 6 February 2015: “Middle-segment house

(Source: Africa Property News, 18 March 2015, “Surge in Ultra High Net-Worth Individuals

“I know there are those who say: ‘Premier, why do you speak about a development for the super-rich?’ I say, you don’t understand. Firstly, an injection of the amount of money put in the provincial economy, in our country’s economy, in the initial phase of development – more than R6bn. And the number of jobs already created has made a big impact on the economy this side: 11,800 jobs” David Makhura, premier, Gauteng (Source: Mail & Guardian, 13 March 2015, “Steyn City: Canapés and golf in shackland”)

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