Property Professional Nov/Dec 2016 by Property Professional

NOV/DEC 2016

THE SOUTH AFRICAN PROPERTY INDUSTRY MAGAZINE

FIRST-T I ME B U Y E RS :

ARE HOMES MORE AFFORDABLE I N T E RV IE W

BERRY EVERITT ON CAPTURING THE

LUXURY MARKET SHARE WITH EXCELLENCE

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HOW TO RETAIN TOP TALENT

CHANGES TO

SECTIONAL TITLE RULES 2016/10/27 2:46 PM

INDUSTRY NEWS

IS THE US HOUSING MARKET REALLY ON TRACK?

THE LATEST INDUSTRY TECH

BERRY EVERITT ON LUXURY PROPERTY AND THE POWER OF PORTALS

Catherine Davis PUBLISHED BY THE CREATIVE GROUP 6 Beach Road, Old Castle Brewery, Woodstock 7925 087 828 0423 facebook.com/PropertyProfessional twitter.com/Property_Prof

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BUILDING RELATIONSHIPS

US realtor Tom Salomone on luring repeat clients

What landlords should know

RESIDENTIAL EVICTIONS

THE CREATIVE GROUP CEO Shaun Minnie shaun.minnie@thecreativegroup.info Editor Kim Maxwell Content Business Manager Catherine Davis Content Strategist Bridget McNulty Art Directors Mark Peddle and Leah de Jager Copy Editor Kirsty Wilkins Online Editor Andy Möller

ADVERTISING Sales and Marketing Manager Michèle Jones michele.jones@thecreativegroup.info 084 246 8105 Advertising, production and subscriptions Jackie Maritz jackie.maritz@thecreativegoup.info Printing Paarl Media | Disclaimer: the publisher of this magazine gives no warranties, guarantees or assurances and makes no representation regarding goods or services advertised within. Information correct at time of printing. © 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 unsolicited material.

COVER PHOTOGRAPHY: STEVE MARAIS

ith education and government turmoil affecting the national mood, many South Africans are thinking twice about what they invest in. In our cover story (page 26), CEO Berry Everitt predicts that property will remain competitive in 2017, but reminds us that professional agents need to communicate the value proposition of each property clearly, and have the requisite skill set. Yes, there’s a growing realisation that being a property consultant is tantamount to running your own business within the framework of a chosen brand. Anne Schauffer canvases opinions (page 21) on how agents should retain their top talent. Has property become more affordable for first-time buyers? Earning potential is still the key indicator affecting buyer affordability – read Neesa Moodley’s take on page 43. Or, if your potential buyers don’t earn enough to go it alone, is co-buying a flat or home a feasible consideration among friends (page 33)? Be sure to read about implications for landlords, tenants and investors since the recent Sectional Titles Act amendments were introduced. Then join the debates on Property Professional’s Facebook page and sign up for the Property Professional e-newsletter – details on page 19.

33 47 26 HOW TO MAKE CO-BUYING PROPERTY WORK FOR YOUNGER CLIENTS

2016/10/27 1:32 PM

LOCAL NEWS

LOCAL INDUSTRY NEWS Marriott International and Amdec sign R3bn hotel deal Marriott International has partnered with South Africa’s Amdec Group in a R3bn investment in five branded hotels, catering for different market segments for international and domestic visitors. Of this, R1bn is earmarked for the Johannesburg developments Marriott Hotel Melrose Arch and Marriott Executive Apartments, expected to open in mid-August 2018. There will be three hotels in Cape Town: the first Marriott Hotel in the city; the first upscale extended-stay brand in South Africa, Residence Inn by Marriott; and AC Hotels by Marriott, the first hotel under this brand for the Middle East and Africa region, aimed largely at the middle-class market. First to open, in June 2018, will be the 189-room modern, designled AC Hotel Cape Town Waterfront at The Yacht Club, a mixed-use landmark by Amdec that includes residential flats and prime-grade offices in the Roggebaai Canal tourism precinct. Amdec’s mixed-use development, Harbour Arch – modelled on the award-winning Melrose Arch in Johannesburg – will be constructed in the bourgeoning Culemborg node. It will house the 200-room Cape Town Marriott Hotel Foreshore as well as the 150-room Residence Inn by Marriott Cape Town Foreshore. Harbour Arch, set to dominate the city’s skyline and act as the new gateway to the city centre, is expected to open in 2019. Marriott has been aggressively extending its footprint across Africa, opening its first branded hotel in Rwanda in October. It announced a series of expansion plans, propelled by the continent’s growing middle class, which is expected to drive tourism and business travel. ABOVE AC Hotel, Cape Town Waterfront BELOW Marriott Hotel Melrose Arch, Johannesburg

PROPERTY PROFESSIONAL

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LOCAL NEWS

INSPIRATION FOR ASPIRANT AGENTS

koko Sebola’s journey into real estate might well be familiar to other agents: he trained in a career outside of property and dabbled in a few other areas of interest before the real estate bug bit. Sebola is a law graduate from the University of the Western Cape and holds an HR diploma from Midrand Graduate Institute. He has moonlighted as a waiter at Mike's Kitchen and News Café, and tried his hand as an HR consultant, customer relations officer and a sales rep. Fast-forward 10 years. Today Sebola is a Leapfrog Property Group franchise owner in Midrand. “I got into real estate because I like interacting with people and the opportunity it offers to be part of helping others achieve the dreams of acquiring a home. It honestly brings me so much joy,” he says. Sebola recalls his first sale and commission: “It was incredibly exciting and made me realise that I can make a decent living from property. I was lucky to have been given great mentorship. But the road was tough. You continuously need to be learning and to push yourself to reach high standards so your clients keep coming back to you. “I plan to become the top sales agent for the group and the number one Leapfrog franchise in the not-so-distant future.” Sebola’s advice to aspirant realtors? Link up with an experienced mentor, get all the required training and work really hard.

APP OPENS UP RENTAL MARKET Two Capetonian entrepreneurs have launched the HouseME bidding and tenantscreening app for South Africa’s home rental market. Its founders claim landlords can achieve greater returns on investment on their properties through the online auction platform and access a database in which registered tenants are rated on their conduct. Since its launch in Cape Town and Stellenbosch in the first week of September, HouseMe founders Ben Shaw and Kyle Bradley claim it has served 30 new landlords a week, with a 100% success rate in securing rentals. They say landlords have achieved a 15.5% upside by listing their properties on the auction platform for an average of five days or more. The mobile application and web portal offers an online auction mechanism where landlords receive bids on their rental properties from prospective tenants. At present, landlords advertise their properties for a set rental and often accept the first tenants to put a deposit down. Says Shaw: “It’s clear that both landlords and tenants will benefit from a transparent bidding mechanism, particularly where a property is in high demand and a fair price unknown.” Landlords are often anxious about the quality of tenants and the condition their property will remain in. Users registered on HouseME can establish reputations as solid, trustworthy and responsible tenants. Bradley says this is also an opportunity for landlords to cut their expenditure on high letting agency fees, because tenant suitability has already been verified and they can be confident that maintenance issues will be reported timeously via the app’s dashboard. Shaw says tenants are not always able to view properties before they arrive, which is why HouseMe claims to “verify every property listed and provide up-to-date photographs on the app”.

PROPERTY PROFESSIONAL

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LOCAL NEWS

TYPES OF ZONING: RESIDENTIAL

Know your zoning Rezoning often occurs when an investor is looking to make a profit. It means that residential dwellings can be converted into commercial properties or that residential land can be used to develop cluster housing (apartments or townhouses). Says Charlotte Vermaak, principal of Chas Everitt Nelson Mandela Bay: “Purchasers should be aware of any restrictions beforehand as you may not use property for purposes other than that for which it is zoned. In some instances, local authorities may allow owners to use a small percentage of their houses for business purposes. This normally is restricted to 20%.” Applications should be made to the local authority if you intend to change a premise’s use. The process can be tedious, complex and expensive. To avoid complications, an experienced attorney or town planner should be able to guide you. Vermaak suggests that, if purchasers intend on rezoning, they stipulate in the offer to purchase that the offer is subject to approval or consent to use the property in a specific manner. They should stipulate who should carry the cost of the application.

RESIDENTIAL 1 stipulates that properties can have one dwelling per stand or erf. Coverage is 40%, which is perfect for residential dwellings. For example, on a 1,000m2 erf

RESIDENTIAL 2 can have a density of between 10 and 20 dwellings per hectare, ideal for cluster housing or townhouse complexes.

RESIDENTIAL 3 permits between 21 and 40 dwellings per hectare, also perfect for cluster housing or townhouse complexes.

RESIDENTIAL 4 allows for a density of between 41 and 120 dwellings per hectare, for construction of blocks of flats.

BUSINESS 3 means stricter zoning is in place. A wider variety of businesses will not be allowed to open in the mall.

BUSINESS 4 does not involve shopping centres at all and makes provision for office use (such as office parks).

you could build a dwelling covering up to 400m2 including garages and outbuildings.

TYPES OF ZONING: BUSINESS BUSINESS 1 refers to general business in the form of shopping centres. This is mostly unrestricted, which means the developer or owner would be allowed to have almost any type of shop on the premises.

BUSINESS 2 refers to shopping centres with certain restricted businesses. Bottle stores or pet shops are two examples.

NOVEMBER/DECEBMER 2016

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LOCAL NEWS

App to improve your processes

64% 64% of Homeowner Insights respondents would consider buying a townhouse or cluster

26.6% In the past 20 years flats and townhouses have made up 26.6% of newly completed buildings Property inspections. Necessary and a legal requirement for rentals. But also time-consuming and admin-intensive. Enter Property Inspect. The app works as a management system to allow you to work through more inspections in a shorter space of time – and more eﬀectively at that. Translation: use it to save photos and voice recordings, and take notes using templates and checklists. From there, you can create professional reports while you’re on the road. These can be viewed online and then shared with clients, landlords and other agents. Or you can use the app as a diary to schedule and delegate appointments, and receive real-time reminders of where you need to be next. Aside from saving you time and admin hassles, it protects agents, tenants and landlords from potential disputes. Professional inspections are essential if proof of damages is needed. Says property law specialist Ilse Pretorius: “Viewing a dwelling is not the same as inspecting it for the purposes set out in the Rental Housing Amendment Act, that is, inspecting it for possible defects. The inspection is therefore not just a visit to show the dwelling to the tenant. A formal joint inspection, with both the landlord and tenant present, must be done before the tenant moves into the dwelling and again towards the expiry of the lease. These are peremptory provisions in the act.” Property Inspect is available for Android and Apple devices, and includes diﬀerent packages, depending on the required number of users and properties.

63% In the past three years, 63% of all residential development units financed by Absa were sectional title units Source: The Homeowner Insights – Absa and Columinate's annual report reﬂecting consumer behaviour about home ownership

NOVEMBER/DECEMBER 2016

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LOCAL NEWS

MORE BLACK BUYERS ENTERED THE LOCAL RESIDENTIAL MARKET DURING THE PAST 12 MONTHS

Black home buyers represented 62% of applications received by ooba in Q2 2016, a 4% increase on the same period in 2015. Similarly, 73% of all applications received from first-time home buyers were from black home buyers compared to 70% in 2015. This reflects the changing economic demographics in South Africa Rhys Dyer, CEO, ooba

ASK THE EXPERT Kevin Swart, project director of PG Building Glass, on glass as a noise management solution. HOW DOES PG SMARTGLASS HELP TO REDUCE NOISE IN A NEW BUILD?

It is a range of specialised single-glazed (X1) and double-glazed (X2) glass solutions. Glass controls noise by reﬂecting it back towards the source and by absorbing noise energy within the glass. Our four X2 (Standard, Elite, Plus, Superior) doubleglazed products are not specifically designed for noise management but inherently provide sound comfort.

are always better than one to reduce sound travel but the nature of each respective pane will have a distinct performance eﬀect. The introduction of a laminate carries significant sound management properties. HOW DOES A LAMINATE AFFECT THE PROCESS?

PG SmartGlass delivers a range of comfort benefits that include: a cooler or warmer home when it's hot or cold respectively outside (so year-round energy-saving benefits), a brighter home through its ability to filter out specific UV light without the loss of perceived light and (given Sans 10400 legislation that controls permissible window sizes) the ability to use more glass in a home to maximise views and aesthetic appeal.

The highest noise insulation is achieved using an acoustic laminated glass. Sound dampening within a double-glazed unit is improved by the additional mass/thickness of the glass through which the sound travels. For example, 2mm x 4mm glass versus 1mm x 4mm glass. The improvement from a single 4mm to a double-glazed 4mm is 3dB. Where a laminated glass is used within the double-glazed make-up – a 6.38mm outer glass – a further 6dB reduction is achieved. For context, consider that a 10dB diﬀerence either halves or doubles the perceived sound. In summary, increasing the mass of the substrate and/or introducing a laminate into the make-up reduces the sound transmission. So introducing a sound-dampening PVB laminate into the make-up is far more beneﬁcial than increasing the thickness of the glass.

WHAT SHOULD CLIENTS CONSIDER TO IMPROVE SOUND INSULATION?

WHICH GLASS IS BEST TO MANAGE NOISE IN A HIGH-TRAFFIC AREA HOME?

WHAT ARE THE BENEFITS?

It can be improved in different ways – by increasing the thickness of the pane, by using laminated glass (where panes are laminated together to form a single pane) on its own or within an insulating glass unit, also known as double glazing. The larger the gap between the panes, the better the insulation. IS DOUBLE-GLAZING THE MOST EFFECTIVE NOISE MANAGEMENT SOLUTION?

It’s not inaccurate to say it is but this is only the case when at least one of the panes uses a polyvinyl butyral (PVB) laminate. In other words, two panes

Soundprufe is our specialised laminate to manage noise thanks to its special vinyl interlayer that oﬀers much better sound control than traditional PVBs. It can be specialised within a double-glazing solution. Few people realise that the second pane provides this beneﬁt. WHERE CAN HOMEOWNERS LOCATE GLASS SUPPLIERS?

Specialist combinations can be made up – we recommend they contact our call centre and specify their needs for a custom solution. Phone 0860 695 695 or visit pgsmartglass.co.za.

PROPERTY PROFESSIONAL

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Over 1 million satisfied customers.

Over the last 15 years, BetterLife Home Loans has helped over 1 million people achieve the dream of owning a home. Our service promise is to assist your clients throughout the entire finance application process and to make it convenient and easy. What’s more, our preferential relationships with SA’s leading banks means that we are able to secure the best deal possible for your clients. But, enough from us. Because our clients are so happy with our service, they do the talking for us.

Here’s what they have to say... “Thank you so much, Candice Dexter and BetterLife Home Loans, for excellent service YET AGAIN! You guys are awesome! You helped my client obtain finance so quickly!” William Docherty “Annetjie Smit from BetterLife Home Loans helped us through every single step of the process of obtaining a home loan, and was always there to assist and always there to give feedback. I am really impressed, customer service is really top of the line. You will not be sorry.” Carolina Rautenbach “Mariette Myburgh and Candice Dexter from BetterLife Home Loans always provide exceptional service and dedication in securing bond finance for my clients.” Danie Small

Let us help your clients too. Call us today.

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LOCAL NEWS

BRIDGET MCNULTY

A HOUSE, YOU’RE BUYING INTO THE NEIGHBOURHOOD, TOO

While buying the worst house in the best area you can afford has often been touted as sage advice, in reality this strategy has had mixed results. Factors such as condition, view and demand for the type of property will influence the change in price of the lower value properties. Important to note, though, is that the more affluent the area, the worse the worst properties perform Anne Porter, Chairperson, Knight Frank Residential South Africa

As healthcare improves and life expectancy extends, property developers are increasingly building for an older population

evelopers in the US and Europe have been catering to senior citizens for some time. And it seems that South Africa is finally catching up. People over the age of 60 make up about 8% of the population, with those aged 50 or above make up about 15%. This figure is expected to rise as life expectancy increases every year. Affordable retirement property is in great demand as older buyers seek to lessen the pressures of home ownership and security issues. Sectional title schemes are thus an attractive option to keep costs down. As well as security, which is front of mind for many older buyers, retirement properties need to be single-level with wheelchair access, include medical care such as full-time nursing and incorporate restaurant facilities. But they also need to cater to the younger, more independent retiree who recognises the need for these amenities but still wants to live a full, rich life. “There is a shortage of retirement villages in South Africa that cater to this market,” explains Simon Bray, CEO of Private Property. “Some have waiting lists of 10 years or more. Property developers have recognised the demand and are building more of this type of property.” Private Property also reports that there are certain retiree hot spots particularly popular with older buyers. These include the KwaZulu-Natal South Coast in the Scottburgh area; Howick, also in KZN; and the Cape Winelands. In Gauteng, areas such as Alberton and Moot are popular due to their facilities, the lifestyle they offer and their reasonably priced property. Wherever this next flock of senior citizens chooses to settle, it’s a property segment worth keeping an eye on. It’s not often that such a desirable portion of society is in the market for such a specific kind of home.

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WHEN YOU BUY

PROPERTY TREND: CATERING FOR AN AGEING POPULATION

PROPERTY PROFESSIONAL

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WHAT’S ON

All you need to know to stay plugged in to the property industry in South Africa

FEBRUARY

DECEMBER

4-8 7

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WHAT IEASA NQF 5 REAL ESTATE WORKSHOP – MODULE 3 WHERE HB Forum Building, Val de Grace, Pretoria CONTACT bit.ly/2dYPdGA

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WHAT IEASA NQF 4 REAL ESTATE WORKSHOP – MODULE 4 WHERE HB Forum Building, Val de Grace, Pretoria CONTACT bit.ly/2e8WWkw

WHAT IEASA NQF 5 REAL ESTATE WORKSHOP – MODULE 3 WHERE HB Forum Building, Val de Grace, Pretoria CONTACT bit.ly/2dpRW78

Save on an online learning course 12

CHARTALL BUSINESS COLLEGE is starting two new real estate qualifications in February. NQF 4, which commences on 1 February, covers the required sales, marketing, ethical, legal and financial skills for the industry. NQF 5, on 2 February, expands on the above but also balances theory and practical experience to build competency as a principal agent. Property Professional readers can save R2,495 for the online learning option – simply quote the promo code “PROPERTY PROFESSIONAL”. Terms and conditions apply. chartallcampus.com

PROPERTY PROFESSIONAL

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2016/08/22

2:26 PM

INTERNATIONAL NEWS

Megacities of the future KIM MAXWELL

THE US, based on demographics, seems to have the most favourable growth outlook for

BY 2050, GERMANY will have approximately two workers for every retiree. Unlike Europe, Africa faces a youth bulge. By 2050, its workingage population will be two-and-a-half times current numbers.

retirement homes, followed by Japan and Western Europe. Retirement home operators and the real estate industry should profit from this demand.

THE UN PREDICTS THAT by 2050, the world’s population will be 10-billion, an increase from today’s 7.3-billion. The number of Asians living in megacities with populations of more than 10-million is expected to double by 2025.

1 2

2030

2050

By 2030, nearly 9% of the world’s population should live in only 41 megacities. And the number of people in developed countries aged more than 60 years old will exceed those who are younger than 25.

Thanks to people living longer and the baby boom generation progressively reaching retirement age, elderly populations are increasing rapidly. Demand for assisted living facilities is expected to grow fast.

Emerging markets should account for almost two-thirds of global infrastructure spending by 2025. Rising urbanisation and the continued expansion of megacities in emerging markets will drive sustained demand growth. Public and private spending on infrastructure will create ongoing opportunities for local contractors, equipment suppliers and property developers or landlords.

Source: UBS House View – Years Ahead 2016 14

PROPERTY PROFESSIONAL

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INTERNATIONAL NEWS

A house or a home? H

ON THE HOUSING LADDER: YOUNGEST FIRST-TIME BUYERS

ccording to new research from Halifax bank, the average first-time UK buyer may be 30 years old but the youngest first-time buyers are 27 years old and live in south Wales. Yet price and location play their part. The top 10 UK areas with the oldest firsttime buyers are all in the southeast of England. The analysis by Halifax reveals a strong relationship between UK locations that have relatively low average house prices and the youngest first-time buyers. All 10 areas with the youngest first-time buyers have prices below the national average of £200,754. Said Halifax mortgages director Chris Gowland: “The majority of areas in the country where the average age of firsttime buyers is two to three years below the national average of 30 are outside southern England, mostly locations where house prices are typically lower both in monetary terms and in relation to earnings, factors that help to reduce the size of the deposit needed.”

ow do people spend, save, invest and feel about money? An international mortgage survey conducted in June 2016 surveyed nearly 15,000 participants in 15 countries via the internet. In 11 of 15 countries, more than half expected house prices to rise. Only Italy (37%), Poland (43%), France (46%) and Australia (50%) differed. Across Europe, 60% of people considered houses where they lived to be “expensive” or “very expensive”. Across Europe “location” was the reason most often cited for expensive housing, with “increasing population” next. “Level of interest rates” and a perception that there are just “not enough houses being built” came third. One in three (33%) people indicated that part of their life is on hold due to their housing situation. Of those who were forced to compromise, many have moved into a smaller home than they wanted. Others have had to settle in an area they do not really like. Half of Europeans and 43% of people in the US and Australia agreed that house prices are forcing them to stay in a current home. UK news media coined a phrase “the bank of Mum and Dad”. It refers to parents or other relatives increasingly contributing to help their children buy a home. Turkey (75%), 16 percentage points ahead of Italy, has the highest share who agree that parents should give their children money to help them buy a house. Poland (56%) and Romania (53%) also have relatively high percentages who agree that parents should support these home-owning aspirations. Yet more than two in three (69%) in Europe say they are happy with their housing situation. However, home owners are happier than nonowners in all countries surveyed. The “happiness” gap between home owners and nonowners is widest in the UK. “PARENTS SHOULD GIVE THEIR CHILDREN MONEY TO HELP THEM BUY A HOUSE” Respondents were asked if they agree. Those in each country who agree or strongly agree are depicted below. European consumer

Netherlands

47%

22%

Spain

35%

Czech Republic

36%

37%

France

37%

Germany

38%

Belgium

38%

Luxembourg

42%

Austria

43%

Romania

53%

Poland

56%

Italy

59%

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Turkey Sample size: 14,937 Find more international property news at propertyprofessional.co.za

Source: ING International Survey Homes and Mortgages September 2016

Australia US

75%

27% 34%

NOVEMBER/DECEMBER 2016

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TOOLS OF THE TRADE

GOODIES AND GADGETS FOR WHEN YOU’RE ON THE GO RYAN SCOTT

Immerse yourself in the increasingly digital industry with the latest tech

TOMTOM GO SAT NAV 5200

BOSCH MT PLR 50 C

YOU NEED IT BECAUSE GPS navigation has become an integral part of our daily lives. This smart dash-top device feeds into that. THE NITTY GRITTY The built-in Wi-Fi means you can plan your route beforehand to ensure you don’t take an unnecessary detour while en route to your meetings – and you can receive real-time traffic updates while you’re on the road. The device also supports hands-free calling and smartphone messaging. X-FACTOR It comes with a lifetime’s supply of international maps as well as an alert for speed cameras, which is (happily) legal. R5,999; Dion Wired

YOU NEED IT BECAUSE You need to be accurate when measuring the distance between the kitchen and lounge during a property inspection. Enter digital measuring: slick, simple and exact. THE NITTY GRITTY This option from Bosch is especially designed for the DIY market so it’s user-friendly. The laser technology measures areas of up to 50m and can take distances, areas and volumes into account. X-FACTOR A large colour touchscreen presents the information clearly if the clients would like to see the details immediately. R2,199; takealot.com

PROPERTY PROFESSIONAL

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SAMSUNG GEAR 360 YOU NEED IT BECAUSE Your online property listings need to be presented professionally. That means using slick, high-res images and videos. THE NITTY GRITTY The front and back lenses shoot at 180° both horizontally and vertically. The result is an impressive 360-degree video of your property – no stitching necessary. Video records at 3,840 x 1,920 high resolution and you can shoot photos at 25,9MP. X-FACTOR When last were you able to show a property’s beautiful Italian tiles or ornate high ceilings in the same shot? Now you can take your digital images to a new level – every level, in fact. R6,999; Samsung stores

Wealth creation and shares for all those who work for Leapfrog, medium or long term Francesca Beebé Leapfrog CT Southern Suburbs

IMAGES: SUPPLIED

GOPRO KARMA YOU NEED IT BECAUSE To optimise your property listings, use GoPro’s new drone to film the inside or outside of buildings – or shoot aerial footage. THE NITTY GRITTY The legs fold inward to make this drone one of the easiest to transport. You can also shoot footage for up to 20 minutes at a maximum altitude of 4,5km and at a distance of up to 1km away. X-FACTOR The actual GoPro camera – as well as the gimbal – are easily detachable and can consequently film independently of the drone. R22,000 estimated price for complete kit; ormsdirect.co.za

For franchise / agent opportunities call Bruce Swain 082 783 7198 bruce.swain@leapfrog.co.za

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2016/10/27 10:10 AM

REBOSA is calling on all estate agents to

TAKE THE REBOSA EQUALITY PLEDGE TODAY REBOSA has a zero tolerance approach to all forms of discrimination in the real estate industry and in society.

DISCRIMINATION

STOPS WITH ME

Go online to www.rebosa.co.za and show your support by taking the ONLINE PLEDGE and saying “NO” to discrimination.

WWW.REBOSA.CO.ZA REAL ESTATE BUSINESS OWNERS OF SOUTH AFRICA

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2016/02/25 4:14 PM

5 reasons to sign up to the Property Professional newsletter right now

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For franchise / agent opportunities call Bruce Swain 082 783 7198 bruce.swain@leapfrog.co.za

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2016/10/27 10:12 AM

A home is more than just a house.

It’s where special bonds are formed. It’s the place your clients dreams begin, and where they make their plans to achieve them. It’s where they celebrate, because it’s where they can truly be themselves. Home truly is “where the heart is”, so make sure it’s the best home your client can get. From handling their paperwork to applying (and negotiating) with the banks, there’s so much we can do on your behalf to help your client successfully finance their dream home.

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2016/10/26 9:30 AM

SOUTH AFRICAN

HOW DO YOU RETAIN TOP TALENT? ANNE SCHAUFFER

As a real estate brand, is keeping talent a matter of financial incentives or investing in training – or is it more complex than that?

ncreasingly, real estate brands are fine-tuning their identities. Differentiation is key to attract property consultants who align themselves with the brand image and ethos, and to appeal to a niche market. Previously, becoming a property professional was rarely considered a career by school leavers or graduates. Today – aside from the obvious lures of reputed high earnings, a flexible lifestyle and the dearth of jobs in other sectors – real estate brands are providing quality in-house training, mentorship and support for professional qualifications.

NOVEMBER/DECEMBER 2016

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SOUTH AFRICAN

Help your agents to achieve their hopes, dreams and desires, and you’ll be well on your way to creating an ecosystem in which everybody wins Adrian Goslett, regional director and CEO, RE/MAX of Southern Africa

CHANGING THE GAME

There’s a growing realisation that being a property consultant is tantamount to running your own business within the framework of your chosen brand. If you’re a great consultant, you’re in demand. For agencies to retain top talent, they first need to attract real estate agents who fit their brand’s profile, are committed to being professionals and are driven to succeed. How is BEE recruitment and training working out? Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, is outspoken about his concerns: “The number of realtors in South Africa has halved in the past eight years. The tighter market caused some natural attrition. But in 2008, the Estate Agency Affairs Board (EAAB) changed industry entry criteria. The stringent barriers are restricting all comers to the real estate industry, have created dysfunctional behaviour and are seriously hampering transformation and growth.”

INTERNSHIP ISSUES

Geffen believes that the EAAB’s mandatory year-long internship has effectively made it impossible for people to become agents. Says Geffen: “To expect candidates to put themselves in a position of low earning capacity for that long is too onerous. If you can’t independently support yourself for at least six months, chances are you won’t make it. The sad reality is that there’s a pool of BEE talent out there we’ll never get to nurture into future top-earning realtors, because the EAAB’s internship barrier is financially insurmountable to most.” He believes one simple change would kick-start transformation and open the door for the industry to grow its next generation of senior agents and principals. According to Geffen the EAAB should do a “training audit of the large companies. Those with proven track records should be allowed to reduce the internship period to three months. Then let new agents work on

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SOUTH AFRICAN

What can a brand do to entice top talent to remain at companies, particularly when increased job mobility seems to be the norm? The balance is tipping away from financial rewards. Says Pam Golding Properties CEO Andrew Golding: “Given the dynamics of the real estate business, there is a finite limit to the incentives that companies can offer and still be sustainable. Most offers that are too good to be true are simply that.” For Geffen, there are about 27 agents who have been with the company for more than 20 years. He ascribes it to one thing – loyalty. Says Geffen: “You have to make your business your family. And you stick by your family through good times and bad. If you’re loyal to your family, they are loyal to you.” CHANGING MINDSETS

You have to make your business your family. And you stick by your family through good times and bad

IMAGES: iSTOCK BY GETTY IMAGES

Lew Geﬀen, chairman, Lew Geﬀen Sotheby’s International Realty

their own and earn realistic commissions, but under supervision and with continuous training. If companies don’t consistently coach candidates to Board exam-ready status, they lose the year-long internship waiver”. He adds: “That wouldn’t happen, though, because the time and financial investment to bring new talent into the fold is just too great to throw away through carelessness or neglect of their agents’ needs.” He’s not alone in decrying the current internship criteria. Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, describes RE/MAX training programmes as focused around effective strategies with the consumer. Says Goslett: “Our training doesn’t cater for any specific demographic but instead affords everyone the same opportunities to take their business to a higher level. Legislation and the costs associated with qualification remains prohibitive in enticing new entrants to the market. This is even more evident in the case of those from previously disadvantaged communities.”

Goslett feels that the first strategy to hold on to high-performing employees is to change your mindset as a business owner. Says Goslett: “Firstly, understand you can’t ‘hold on to’ anyone. Secondly, stop seeing agents as employees. Instead, start seeing them as clients. Help them reach clarity in terms of what they want to achieve and exactly how they plan on achieving it. Provide insight and input using your experience. Then hold them accountable for activities that will lead to their goals and objectives.” He continues: “Provide value that is relevant (what they need), irresistible (superior to your competitors) and irreplaceable (cannot be found anywhere else). Build and protect a positive, productive environment and office culture that promotes unity. Your systems, training, technology, support, office staff and brand should be geared to helping an agent make more money in less time. Help your agents to achieve their hopes, dreams and desires, and you’ll be well on your way to creating an ecosystem in which everybody wins.” Likewise, Goslett believes incentives are short-term gimmicks that provide instant gratification but rarely leave a lasting impression: “Recognition is important and should be bestowed on individuals who shine. But I would sooner help an agent take their business to a higher level, enabling them to provide a better life for themselves and their families.” BEYOND INCENTIVES

Golding says, “Provided the remuneration and/or incentives are fair and adequate, in our experience it is not the incentive by itself that motivates agents to stay or leave. Rather, it is a range of other factors including: a sense of belonging and identity with the values and culture of an organisation or brand; the services the brand offers agents and clients; the geographical reach which impacts referrals; and training programmes and upskilling opportunities.” Golding agrees that, increasingly, job-hopping has become a trend. But in real estate, he says, many successful agents tend to stay with the companies or brands where they’ve been successful. Says Golding: “In the more established companies, it’s not uncommon for agents to spend more than 20 years – and in some cases, more than 40 years – with the same company. The increased mobility tends to be a phenomenon associated with younger people. Maybe this is still going to play itself out as this generation gets older. But presumably there is also a possibility that these individuals will be satisfied where they are and not chase the next best offer.”

NOVEMBER/DECEMBER 2016

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Metro Franchise of the Year. Top Metro Office by No. of Sales & Sales Value JHB North East

Country Franchise of the Year. Top Country Office by No. of Sales & Sales Value Gordon’s Bay

Top Metro Agent by No. of Sales Bernie Muller Leapfrog Edgemead

Top Metro Agent by Sales Value Steven Van Rooyen Leapfrog Milnerton

Top Rental Team by Gross Comm. Harry van der Linde Leapfrog Pta East Rentals

Top Rental Agent by Agent Comm. Lina Caraggi Leapfrog JHB North East

Top Agent by Highest Comm % Elaine Carstens Leapfrog Gordon’s Bay

Best Young Office Leapfrog Moreleta Park

Manager of the Year Deena Pitum Leapfrog JHB North East

Andrew Stephenson Leapfrogger of the Year Petra van Asch - Leapfrog Melkbosstrand

Adminsitrator of the Year Catherine Winn Leapfrog Gordon’s Bay

Icebreaker of the Year Owen Thomas Leapfrog JHB North East

Awards &

* Could not attend: Odete Dias & Standley Luntz (Leapfrog JHB North East) - Top Metro Partnership by No. of Sales & Sales Value. Di Plumridge & Mariette Longland (Leapfrog Langebaan) - Top Country Partnership by No. of Sales & Sales Value. Simon Rachomanyane (Leapfrog Vanderbijlpark) - Top Country Agent by No. of Sales. Floris de Kock (Leapfrog Polokwane) - Top Country Agent by Sales Value.

The Annual Leapfrog Convention for 2016 was held at the beautiful Vineyard hotel in Cape Town. The party evening held at Stardust was outstanding with everyone getting into the spirit of the musical theme, with Elton John, Amy Winehouse, Britney Spears and Kiss in attendance. The keynote speakers, Brett Archibald and Siphiwe Moyo, were exceptional, both delivering strong messages in entertaining and memorable presentations. The highlight of the convention was the Gala Awards dinner, where a record number of Leapfrogâ&#x20AC;&#x2122;s top producing agents, franchisees and administrators, were honoured for their achievements.

Move on Move up

www.leapfrog.co.za

Celebrations Thank you to all attendees, sponsors and everyone involved for making this a wonderful occasion.

MAN

SELLING

LUXURY CATHERINE DAVIS

From local to national to global: Chas Everitt International Property Group CEO Berry Everitt on the benefits of international luxury partnerships, in defining their strategies for 2017

26â&#x20AC;&#x192;

PROPERTY PROFESSIONAL

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COVER STORY

y meeting with Berry Everitt is inside what may be Johannesburg’s most expensive residential sale yet. The home is in Houghton, of course, and on the market for R110m. It has the requisite sweeping staircase, an indoor pool, Versace armchairs and automated everything ... Everitt, driving up the manicured driveway in his black Aston Martin DBS and bespoke suit, could well be the owner. He’s not, but this is his market. “The luxury market is one of our focus areas. Our three goals are to capture market share, capture the luxury market share, and do everything with excellence,” he says. That’s why the company, Chas Everitt, is part of Luxury Portfolio International, a global network of premier, locally branded agencies. Says Everitt: “In the past nine months, we’ve seen an improvement in the luxury market in South Africa, especially in Johannesburg. We’ve hired a team of private bankers who understand that luxury environment. They fit in with the Luxury Portfolio International offering. Dealing with the 3-million high-net-worth individuals around the world gives us a great deal of confidence that we will be able to give our clients what they’re looking for.”

The luxury market is one of our focus areas. Our three goals are to capture market share, capture the luxury market share and do everything with excellence

GROWING THE BUSINESS

Watch Berry Everitt on video about digital disruption in the online real estate industry: propertyprofessional.co.za

The company wasn’t always so global. In fact it, wasn’t even national when Everitt’s parents, Charles (Chas) and Tilla, started the business in Randburg in 1980. Everitt bought the business from his parents in 1997. A few years later he took the brand national. “Once you get to a medium-size business you start competing with the big players, so we needed to establish a national footprint,” he says. “It also meant we could reap the beneﬁts of scale, displacing the cost of our investment in training and technology. It was part of my dream to take our strong value proposition and grow it nationally.” Everitt says he was never concerned about losing the family brand established on his parents’ watch: “The roots were so ﬁrmly embedded in the culture of the brand from the beginning – we weren’t going to lose it. The company had a culture of attracting like-minded people and it still does.” NOVEMBER/DECEMBER 2016

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COVER STORY

Part of Chas Everitt International Property Group’s recipe for success is its high agent retention rate and Everitt insists they work hard for it. “People want to work for a company where they are appreciated and where they can add value. We have incentive plans for our agents. One of those is helping them look after their retirement – agents aren’t known to be good at that. We also have “fun-ventions” every year to incentivise top agents. It’s great for them but also for me. I get into the trenches with them and hear about what they’re doing in a casual environment. Many of the strategic decisions we make come from those discussions.”

Print v digital advertising

PORTAL POWER

What about the real estate industry feeling under threat by dominant property portals? Everitt takes a calm, cooperative approach. “We’ve got to keep our eye on the portals as they have a lot of power. The two big players – Private Property and Property24 – they’re head to head, and the industry has picked its partner in Private Property. The competition is good, though – it keeps them honest.

The housing market is going to depend on sentiment – and sentiment is going to need to be bolstered by the professional agents who clearly communicate the value proposition of each property “But because of the power they wield, the industry as a collective recently created a data repository through the Estate Agents Portal Company. This will ensure that the listing data gets fed through economically to the strong portals. If a portal prices itself out of the market, we might just slow down the feed to that particular portal until we get the prices right. “Without the listings, there will be no eyeballs to those portals – the ﬂow of those listings is what’s critical to the portals and what they’ll be ﬁghting for. Agents have

the power to slow that flow down for those that don’t cooperate.” Everitt points out that security measures are being built in to trip up disruptors, but says real estate agencies are the only ones that have access to sales information. “As an industry, we should find a method to monetise the information that we have and the data flow to various sources, and to create new markets. The key players in the industry – the ones who create and drive the trends – are quite far down the line with certain plans.”

IMAGES: STEVE MARAIS

EVERITT’S 2017 STRATEGY

After the year we’ve had in South Africa, Everitt predicts that the property market in 2017 will remain competitive. “It’s tough to look into a crystal ball on a national level because each city has its own attractions. Cape Town will continue to grow – there’s no more land between the ocean and the mountain now. The North Coast in KwaZulu-Natal is still attractive. And Johannesburg, as the economic hub, is going to be stable. The banks are going to be lending more in the big cities than in the rural areas, and they’re keen to lend. “We do have our challenges as a country but Chas Everitt’s focus is on taking more market share and making up the diﬀerence if the market’s a little slow. The housing market is going to depend on sentiment – and sentiment is going to need to be bolstered by professional agents who clearly communicate the value proposition of each property. If agents have that skill set, the year will be stable.”

Says Everitt: “Print is not dead. We see some brands still spending in these publications and we know sellers like to see their ads in print. The luxury environment is still focused on print – you can position a property beautifully.” He continues: “Chas Everitt has reduced their print advertising spend, however, and is spending more online.” But Everitt emphasises the need for a strategy behind that. It’s not enough to just put your properties on the portals. It’s about purchasing a lot more products to get your clients’ homes positioned correctly and to attract the right buyers. “You need to provide goodquality photography, video and floor plans. You need to make use of social media. Then you’ll create stickiness for your clients’ properties. That’s what can differentiate one real estate company from another,” he says.

PROPERTY PROFESSIONAL

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PP Mag Oct 2016.pdf

2016/10/25

7:40 PM

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PROPERTY

PROFESSIONAL THE SOUTH AFRICAN PROPERTY INDUSTRY MAGAZINE

2016/10/28 9:59 AM

HOW MUCH MUST A PROPERTY SELLER DISCLOSE? Sellers and buyers are generally aware of the implication of the voetstoots clause in an agreement, essentially that it protects the seller from comebacks from the purchaser regarding latent defects in the property. It is also appreciated that a seller cannot hide behind the voetstoots clause if he fraudulently failed to disclose the existence of material defects that he knew of. What is not so well known is how liquid the concept of a material defect has become. It now includes non-physical attributes such as the absence of approved plans for all buildings on a property. In the recent case of Ellis v Cilliers the court noted that a defect has an element of something that renders a property not fit for ordinary and common use thereof. In that case the purchasers found out, when they started renovating, that the foundational wooden structures of the timber house had decayed, causing the house to subside on one side, rendering the floors unlevel. To remedy this, the owners had put a cement screed over the wooden floors and covered them with carpeting. So too were the ceilings leveled by means of a false ceiling.

The sellers, relying on a voetstoots clause, denied knowledge of the decayed foundations, denied that the unlevel floors and ceilings were defects but rather aesthetical renovations and thus denied liability. The court found in favour of the buyers and affirmed that a defect was any material imperfection preventing or hindering the ordinary or common use of the property. Therefore the sellers should have disclosed these unusual qualities because, although they allegedly did not deem them significant, our law is that: “Where a seller recklessly tells half-truths or knows the facts, but does not reveal them because he or she has not bothered to consider the significance, this may also amount to fraud”. In any event, said the court, a seller has a duty to disclose any “unusual or abnormal qualities” in a house, and the uneven floors were such an unusual feature that they should have been revealed. Take care to disclose to a seller those facts that may be important to the seller. For guidance as seller or purchaser, speak to us at info@stbb.co.za

WHEN IT COMES TO HOME OWNERSHIP, LET OUR FAMILY LOOK OUT FOR YOURS

MORE THAN JUST THE PAPER WORK

List with a tech world leader. As profiled by Apple. apple.com/business/harcourts

By nature, real estate is a mobile business - on the road, meeting clients, inspecting properties and showing homes. Our teams now have instant access to an unprecedented level of sales tools and information wherever they are – a virtual real estate agency in their pocket. Tools across the suite of apps are designed to simplify the complex, boost productivity and ultimately clinch that sale. Do you want to take your real estate career to the next level? Let’s make it happen. Harcourts. With you all the way. 082 568 0782 | harcourts.co.za

“A leader in innovation…” Apple Inc. press release, October 2015.

NEWSWORTHY

HOUSE SHARE NEESA MOODLEY AND PATRICK CAIRNS

Co-buying property, especially for millennials, is a feasible option when looking to buy for the first time. How, then, do you advise clients who are keen to split the costs with friends?

roperty has always been considered a great investment. But for some ﬁrst-time buyers – millennials in particular – it may be tricky to meet the bank requirements needed for loan approval. Most banks will allow up to four people to apply for a joint bond, however. Co-ownership also means that the loan applicants can share the cost of rates, repairs and maintenance. Nevertheless, there are also a number of potential pitfalls that need to be assessed carefully. • Credit reports: with any joint bond application, the bank will take every applicant’s credit report into account. If any of the applicants has a poor record, this will impact the interest rate the bank attaches to the bond. Check everyone’s credit records before starting out. Clients can do a free credit check once a year at any registered credit bureau. • Transparency: everyone needs to be completely honest and open about their ﬁnances. If they are not prepared to discuss their current income

and expenses with their partners, then co-buying is not an option. • Legal contract: set down the terms of the agreement in writing so everyone knows exactly what their commitments are. • Legal advice: consult a lawyer who can help to specify the proportion of each person’s financial interest, the division of costs and how each person will deal with a partner who fails to meet the required payments. • Exit strategy: what will happen if one of the partners wants to sell their share of the investment? This may require putting the property on the market or refinancing it under the name or names of the partners left. Selling involves costs and there’s no guarantee that the bank would agree to refinance the property. Steven Barker, head of home loans at Standard Bank, says that – as with any other bond application – if your client does their homework, they can increase the chances of approval.

NOVEMBER/DECEMBER 2016

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On home loan applications

ALL PROPERTY BUYERS, SELF-EMPLOYED OR SALARIED, WILL HAVE TO OBSERVE THE FOLLOWING POINTS:

Clients must supply copies of the IDs for all directors, members or trustees in their venture.

Deposits allow the application process to become smoother as it reduces the risk the bank needs to take on. Ideally, the client would need to save for a bigger deposit than normal. For example, they should work towards paying 20% upfront instead of 10%. The bank then only takes on 80% of the loan-to-value risk. “A large deposit undoubtedly weighs the odds in your favour,” Barker says.

2 3 To protect both owners, each partner should keep a record of all documents and payments made that relate to their joint property. As an additional precautionary measure, each partner should include a note in their will to address what will happen to their share of the property in the event of their death.

If your client is buying property with a loved one and they are unmarried, one of the bank requirements is that at least one party should live on the property. It is also important that individuals take out joint life cover in the event of one party’s death.

As a rule of thumb, the bond repayment, taxes and property insurance shouldn’t exceed 25%-30% of the buyers’ joint income.

4 5

Is surety an option? “Only as a last resort and even then, we are moving away from the surety model,” says Barker. Typically, a family member or spouse would offer suretyship – and the banks tend to prefer a joint ownership structure. When someone stands surety, it means that they are undertaking to repay the loan if clients default or are unable to meet the repayments. Previously, this was the equivalent of standing guarantor. However, with the National Credit Act in place, standing surety for someone has taken on greater significance. Careen McKinon, provincial sales manager at bond originator ooba, says the implication is that the surety applicant will be 100% liable. Should they apply for any lending in the future, this mortgage will appear as their liability and it may impact future lending. Should the primary applicant default on the mortgage, the surety will be accountable to service the debt. For example, let’s say Ms Smith wants to take out a R1m home loan. Her brother decides to stand surety for her. A year later, he wants to take out his own home loan for R2,5m but the surety stands on his credit profile as though he has taken out the loan himself. This will be taken into account when the bank is carrying out an affordability calculation.

PROPERTY PROFESSIONAL

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NEWSWORTHY

Set down the terms of the agreement in writing so everyone knows exactly what their commitments are

Is your client self-employed?

IMAGES: iSTOCK BY GETTY IMAGES

They need to provide the following: • Comparative financials covering a trading or working period of at least two years. • A letter from their auditor confirming their personal income. • If their financials are more than six months old, they will need up-to-date signed management accounts. • A cashflow forecast for the next 12 months. • A personal statement of assets and liabilities. • Personal and business bank statements (six to 12 months, depending on the banks’ requirements). • Latest IT34, which serves as confirmation from Sars that your client’s tax affairs are in order. • Company, CC or trust statutory documents.

NOVEMBER/DECEMBER 2016

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ADVERTORIAL

3 WAYS TO MEET BUYERS AND SELLERS IN THE MEDIA Research has repeatedly shown that real estate agents and brokers should be using print and digital content marketing tactics to capture an audience, brand themselves and prove their ability to outperform competitors – ultimately landing more stock and selling more houses. The Creative Group can help to do just that WHAT IS CONTENT MARKETING? Instead of pitching your products or services, you are delivering information that makes your buyer more informed. If your business delivers consistent, valuable information to buyers, they ultimately reward you with their support and loyalty.

HOW DOES IT WORK FOR REAL ESTATE AGENTS?

Create relevant content

People read the content

Publish in print and online

Readers will be interested in more of your content

If readers enjoy it, they’ll remember it

When it's time to buy or sell, you’ll be the agent of choice

You build trust and engagement

THE CREATIVE GROUP can help you create high-impact, consistent messaging and brand awareness in the right editorial environment for the right media platforms, with cost efficiencies in mind. Get in touch: email michele.jones@thecreativegroup.info or visit thecreativegroup.info

PROPERTY PROFESSIONAL

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ADVERTORIAL

WHERE CAN YOU USE THE CONTENT? The Creative Group content marketing team can assist with:

1 Print Print is not dead. More than any other medium, advertising in newspapers is considered to be the most believable and trustworthy. Why print is as effective as ever: > Print is memorable and has permanence It’s an investment in brand awareness longevity. Every time a reader looks at the page, they see your brand and the information is easily retained. > Print is tangible and portable, maximising reader engagement. > Print has credibility Readers take the credibility generated by the quality of print content and apply it to the advertising. > Print has standout value The digital world is inundated with advertising. Print advertising allows your brand to stand out without the clutter. Keep print in your marketing mix because the pass-along readership of print doubles and even triples its reach. Adding print newspapers to a multichannel marketing campaign will: • Make TV campaigns 2 x more effective • Boost your ROI by 3 x • Make online display ads 4 x more effective

2 Digital platforms All the content created by you or for you – written, video, infographics – can be shared across digital platforms including: > Your website Home buyers are looking for added value in the form of expert advice and commentary. Make sure your website offers it, whether property news stories, how-tos or video content. It will also improve your search engine rankings. > Social media Facebook is an incubator of business – it allows interaction that is nonthreatening, which makes it easy for an agent to be “known” by Facebook friends. Twitter is a good platform for sharing news and listings, while LinkedIn is the ideal space to share opinion pieces and industry news. > Banner advertising Share your brand message and listings with a targeted online audience. You can choose who to target and when to target them, and track the results.

IMAGE: iSTOCK BY GETTY IMAGES

Gerry Human, Ogilvy & Mather London’s global executive director

Real estate relies on visual content – it helps buyers find meaning and they expect video to give them a better sense of a home. Using video allows each property to be marketed to its fullest, instilling trust and competency with sellers and buyers. If your site has video, users are likely to stay longer; the longer a user stays, the more likely they are to translate into a lead. YouTube is now the top video research destination for house hunters in the US. According to the National Association of Realtors (NAR), 73% of sellers say they would choose a real estate agent who can market their property with video.

8.28m

YouTube’s users. The second-largest search engine after Google

8bn

Facebook’s daily video views by the end of 2015

Source: Newsworks (US) research

When brands are placed alongside carefully edited and skilfully curated content, they are imbued with the same lustre or attitude as the host. When print ads have been well thought-through, they can be immensely powerful and effective

3 Video

Last year we commissioned an independent study on the engagement levels that print readers offer advertisers. The results confirmed what we have always known: no audience is as engaged as a print audience. We believe the sweet spot lies in combining digital and print advertising for maximum effect

700+

Videos shared on Twitter every minute

79%

Video portion of all consumer internet traffic in 2018

NAR’s US sellers who would choose an agent to market their property with video

Esmaré Weideman, CEO, Media24

NOVEMBER/DECEMBER 2016

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2016/10/27 11:19 AM

LEGAL UPDATE

THE NEW

SECTIONAL TITLE RULES LUCINDA JORDAAN

Five years after amendments were first drafted, the Sectional Titles Schemes Management Act came into effect in October – with consequences for noncomplying property owners, trustees, investors and developers. This is what they need to know

A MORE COST-EFFECTIVE SOLUTION

Bauer continues: “Now, compliance is key; there are thousands of sectional title disputes in court and the ombudsman is at least fulfilling the main function: dispute resolution, which seeks to free up the courts and results in settling disputes more efficiently, much faster and more cost effectively. For instance, if you have a problem in a sectional title scheme, you’re looking at R200,000 in legal fees at High Court, while the ombudsman could settle it for as little as R10,000.” This is especially good news for tenants who felt that they had little recourse because of excessive litigation costs and now have rights to complain, says Mike Spencer, owner and manager of Bloemfontein property management company Platinum Global. “The new act will force property owners to look carefully at their management and how effectively property is being managed,” he says.

The gist of the acts is in regulation of the industry, which is a good thing: homeowners’ associations weren’t regulated, so there was no uniformity Michael Bauer, property manager, IHFM

THE BENEFITS OF STRICTER REGULATIONS

Publication of the Sectional Titles Schemes Management Act finally grants the ombud greater control and regulation of all community housing schemes and, more significantly, powers to advocate rule amendments to sectional title schemes. This effectively means that communal property owners and associations will immediately have to gear up on requirements. Says Spencer: “They’ll need to be conversant with the act. And if they run buildings properly, they’ll have no worries. But what’s important to remember is that trustees are now responsible – and more likely to be called out as negligent if not careful. In fact, they could be held liable for malefidi (gross negligence or bad faith) if not registered and compliant with CSOS.” On the whole, property management companies welcome these clear guidelines and stringent regulations, noting that a controlling body was long needed to regulate the industry. And with the CSOS already established, it is hoped it will be amenable to relooking at sections of the act that hamper efficiency or negatively affect the managing of communal schemes.

IMAGES: iSTOCK BY GETTY IMAGES

mendments to the Sectional Titles Act brought two interesting legislative developments to the property industry: the introduction of the Sectional Titles Schemes Management Act and the Community Schemes Ombud Services Act (acts 8 and 9 of 2011). The latter led to the establishment, in April 2015, of the Community Schemes Ombud Service (CSOS), headed by chief ombud Themba Mthethwa. It sounds complicated (and is) but these changes were aimed at bringing all housing-related legislation under the administration of the Human Settlements Department and at helping body corporates to manage and regulate community schemes. These include sectional title development schemes, share block companies, home- or property owners’ associations, retirement schemes and housing cooperatives or group housing. Says Michael Bauer, property manager of Cape Town property management company IHFM: “The gist of the acts is in regulation of the industry, which is a good thing: homeowners’ associations weren’t regulated, so there was no uniformity.”

PROPERTY PROFESSIONAL

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What has changed

KEY STIPULATIONS IN THE ACT REQUIRE DETAILED ADMINISTRATION, REPORTING AND AUDITING PROCEDURES. THEY INCLUDE:

Every body corporate has to have a 10-year maintenance plan and a separate long-term maintenance reserve fund based on expected costs. This is apart from a current budget for short-term maintenance. “This could mean that schemes that have not made good provisions already will have a hard time not increasing their levies substantially. Well-run schemes that have sensible, good reserves will have to reallocate their funds to short- and long-term reserves and will be much less affected,” says Spencer.

Trustees need to appoint a managing agent to run the property. This, says Spencer, is akin to Australian regulations, with an executive managing agent reporting to trustees or owners every six months. “It’s a positive move, as it makes life a lot easier and simpler for owners and trustees, especially with the ruling that the person who handles a body corporate is not allowed to handle funds unless they are registered estate agents.”

Whether schemes have strong reserves or not, their levies will have to be revised, if only to include contributions to the CSOS. Given a seed fund of R40m, the service will only partly be funded by taxpayers; it is set to become self-funding through annual contributions from associations and schemes, and those who seek the service’s intervention, for which they will have to pay an application and, possibly, an adjudication fee. The CSOS can be approached not only to settle disputes, but also to help schemes to recover arrears levies.

3 5

The act is specific about scheduling meetings, establishing a quorum and voting by proxy. No person may hold more than two proxies and an owner may only vote once, irrespective of the number of units to their name. This all has property managers in a tizz. “The proxy rule has advantages as not enough people attend AGMs, so often people had a controlling vote by means of proxy. One could use it for good or abuse that power. Now, with limited proxies, chances are they won’t make a quorum and

All community schemes need to be registered with the CSOS and to send regular copies and reports to the new ombud’s office on the financial health of the body corporate, along with an audited annual report. They also need to register a domicile with the chief ombud, local municipality and local registrar of deeds.

4 Any changes that are made to levy contributions and rules must be certified in writing. This applies to levies and to all body corporate rules and regulations.

meetings will be delayed. This makes it difficult for managers, as it will necessitate many more meetings and incur additional costs for body corporates,” says Bauer.

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Find more useful training and industry advice on propertyprofessional.co.za – click on Tools of the Trade in the top navbar

HOW TO IMPROVE YOUR ONLINE REPUTATION ONLINE REPUTATION MANAGEMENT IS SO IMPORTANT THAT IT HAS BECOME A FIELD OF ITS OWN. HOW CAN YOU ENSURE THAT YOUR ONLINE

What influences your online reputation? Estate agents should keep four major elements in mind: 1 The length of time it takes to respond to clients. The faster the better. 2 Whether or not stale listings are still available on your website. 3 The quality of listings: great pictures and descriptions give clients a better impression of the properties available. 4 Involvement on social media: responding timeously and professionally is important. Controversial topics can affect online reputations of work and personal accounts.

PRESENCE REFLECTS YOUR WORTH? PRIVATE PROPERTY HAS THESE TIPS

PROPERTY PROFESSIONAL

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AGENT DEVELOPMENT

A "sold" banner is a great ad for an agent’s effectiveness. A property marked as sold stays on Private Property for

sold

14 days How can agents improve credibility?

Is it ever a good idea How to leave old important is stock online? social media?

• Respond quickly and efficiently to clients. • Create professional property adverts. • Ask for testimonials from satisfied customers. • Publish property- or area-related content to illustrate expertise.

A recent survey by Private Property contradicted the idea that properties in the process of being sold should be listed as available so as to lure potential buyers. Consumers don’t believe old stock should be on the market. If a property is sold, it should be marked as such. There is no issue with leaving "offer pending" stock on the site, however, provided it is clearly marked as such. There is a possibility that the property could become available again. “One of the most frequent complaints from portal users is about property that has been sold or rented still being listed as available,” says Simon Bray, CEO of Private Property. “When a consumer contacts an agent and is told that the property is no longer available it leads to anger, frustration and a feeling of deceit. It creates a bad perception about the agent and the portal.”

Social media accounts are in the public domain, so they are vitally important for online reputation management. Show your expertise by posting interesting property content and interacting with users on these platforms, particularly Facebook, Twitter and Instagram. Deal with any complaints promptly. Avoid posting anything controversial on business or personal accounts.

How to improve online reputation Do • Post professional listings • Respond promptly to queries and complaints • Be active on social media

Don’t • Take a long time to respond • Leave stale listings online • Be controversial

It takes many good deeds to build a good reputation and only one bad one to lose it BENJAMIN FRANKLIN

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“It is not in numbers, but in unity, that our great strength lies.” THOMAS PAINE

Rebosa invites you to join together in the best interests of the South African real estate industry.

WWW.REBOSA.CO.ZA

REAL ESTATE BUSINESS OWNERS OF SOUTH AFRICA

FINANCE

IS PROPERTY MORE AFFORDABLE FOR

FIRST-TIME BUYERS? NEESA MOODLEY

A leading bank says income levels have improved over the past 10 years. Have first-time homes become more affordable relative to these levels?

ince the introduction of the National Credit Act in 2007 and the subsequent changes to affordability assessments by banks, purchasing a property has become more difficult. Along with the changes in inflation and affordability, buyers need to put down significantly bigger deposits when applying for a home loan. However, this year, Standard Bank released its findings that the property market is now more affordable for first-time home buyers than it was 10 years ago. Affordability has improved on the back of the average income, growing at a faster rate than that of house prices, combined with a low interest rate environment.

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FINANCE

The hard numbers Earlier this year, Lightstone Property carried out a survey to determine what a buyer would need to earn to be able to afford different value home loans. The study made use of the following assumptions:

10.5%

A buyer who can exhibit the financial discipline to save for a sizeable deposit is considered a safer risk than a buyer who has not been able to save for a deposit at all

A 20-year mortgage at a fixed prime rate (10.5%).

100%

Financing of 100% with no deposit made but transfer and other related costs excluded.

30%

No more than 30% of a person’s gross monthly salary allocated for mortgage repayments each month (this is based on mortgage lender standard assumptions). The study revealed that the median value for a property in the Western Cape is R680,000, the highest of the provinces. A client would then require a monthly salary of R22,600. The Eastern Cape has the lowest median value of a property (R380,000) requiring a salary of R12,600. To afford a property in Gauteng, where the median value is R620,000, the client would typically need a salary of R20,600.

According to Standard Bank economist Siphamandla Mkhwanazi, with house prices lagging behind income and interest rates remaining low – thus anchoring the cost of a mortgage – the average first-time buyer is in a relatively better position now than they would have been in 2006. The study, based on Standard Bank’s mortgage applications data over the last 10 years, shows that the median income for the first-time home buyer grew 92% from R15,000 a month in Q1 2006 to R29,000 a month in Q1 2016. The median first-time instalment grew 81% from R3,510 a month in Q1 2006 to R6,345 in Q1 2016. HOUSE PRICE GROWTH IS RELATIVE TO AVAILABLE DATA

Interestingly, different property experts have varying figures when it comes to house price growth – figures based on their individual data records. Shaun Rademeyer, CEO of mortgage originator BetterLife Home Loans, says that in the first-time-buyer sector of the market, continued strong demand was indicated by

a 6,2% increase in the average home price in the year to end-June, compared to a 3,8% increase in the previous 12 months. Says Rademeyer: “First-time buyers continue to account for 46% of all home loan applications and almost a third of all home loan approvals.” Kay Geldenhuys, property finance processing manager at mortgage originator ooba, says their data showed that the average purchase price for first-time home buyers had a year-on-year growth of 4.3% for the period from 1 July 2015 to 30 June 2016. First National Bank’s household and property sector strategist John Loos says that the national average house price inflation rate for the 12 months up until June 2016 was 7.4%. “Based on our average house price inflation rate and the way interest rates rose over the 12 months to July, the instalment payment on the average-priced home rose by 14.4% year-on-year for June,” he says. According to Dawid Malan, head of strategic stakeholder engagements at Absa Home Loans, price growth in the first six months of 2016 for small-sized homes (80m²-140m²) was 9,2% on

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Are first-time buyers getting a better deal?

a year-on-year basis. That means the house price growth figures will differ, depending on who you speak to and the data available to them. But that does little to change the fact that buyers need to save so that they can put down a bigger deposit, reducing the bank’s loan-to-value ratio. Basically, the bigger the deposit, the more comfortable the bank is to grant a loan. A buyer who can exhibit the financial discipline to save for a sizeable deposit is considered a safer risk than a buyer who has not been able to save for a deposit at all.

IMAGES: iSTOCK BY GETTY IMAGES

HOW MUCH CAN BUYERS BORROW?

Geldenhuys says that while banks do not have specific loan-to-value ratios for firsttime home buyers, there are two banks on the market who may consider lending up to 105% home loans to qualified first-time buyers in the affordable lending segment. She says the opportunities are available for first-time buyers with no deposit to access 100% home loans. But banks are extremely cautious where the buyer has no equity in the property.

Geldenhuys says the qualifying criteria for 100% bonds would include the following: • An impeccably good credit record with a track record of repaying existing contractual debt responsibly. • A solid overall credit rating based on the specific bank’s assessment. • Proof of income as well as an income and expenditure statement, which indicates that there is sufficient net surplus income to afford the home loan instalment. The bank will also ask the loan applicant to demonstrate affordability should the interest rates increase and for all future propertyrelated expenses, such as rates/levies. • The property purchased is in good standing and is situated in a suburb where property prices show steady growth. Buyers can gain a 100% home loan at Absa, depending on the quality of their application and the type of property they are buying. FNB offers home loans ranging from 90% to 105%, depending on the client’s personal credit profile and home loan application.

• Y our credit profile is important when you apply for any type of loan – more so for a long-term commitment such as a home loan. The better your credit history, the more likely it is that the bank will grant you a favourable loan to value and price. • Make use of research tools such as the affordability calculators available on most bank and mortgage originator websites. This will help you figure out what size loan you can afford. • Owning a home means extra expenses over and above your monthly bond repayment. Albertus van Staden, head of credit at FNB Housing Finance, cautions that you should furnish your home as and when you can afford to instead of taking out further credit. Remember that your monthly and annual home ownership costs will include municipality rates, taxes, insurances and levies. • Different types of property carry different expenses. A sectional title property, for example, will include a levy for your home insurance and the general maintenance of the common property. If you buy a freehold property, you don’t pay a levy each month but you are directly responsible for all maintenance. • Weigh up the pros and cons of buying versus renting. Buying is not always the best option: if you might be moving within a few years, then renting might be your best option. The transfer and bond registration costs will not be recouped over the short- to medium-term. • With a 20- to 30-year credit agreement for your home loan, you can’t afford to overlook interest rate hikes. Ideally you should buy at a price where you can afford interest rate hikes of a few percentage points.

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Intern estate agent induction training and logbook workshops Unique rental business model that enables you to earn more without all the administrative hassles of managing a rental book For more information, contact: Gerhard KotzĂŠ | 082 447 5698 | gerhard@realnet.co.za

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INTERNATIONAL

SMOULDERING VOLCANO The US housing market is back on track. Or is it? Why mortgage debt remains a concern

GEORGINA GUEDES

he American housing market, the villain that toppled the global economy in 2008, seems to have rebounded. However, while US house prices are approaching their all-time highs of 2006, this doesn’t necessarily paint the whole picture. An August 2016 article in The Economist suggested that despite efforts to fix the plumbing of the American mortgage market, housing in the US remains “a dangerous menace to the world economy”. On average, US home prices have recovered nearly all of their losses from the economic crash although, when adjusted for inflation, they are still 20% below their 2006 peak. When assessing whether a housing market is frothy, which means showing early signs that a bubble might be approaching, The Economist looks at two measures: the ratio of price to income and the ratio of price to rent. Currently, American housing prices appear to be at fair value, with some areas looking stretched. In theory, those areas may ultimately decline.

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INTERNATIONAL

MORTGAGE REGULATION CONCERNS

What is possibly more concerning is not the housing prices themselves but the mortgage infrastructure underpinning the market, which in many cases has been left with a legacy of complex relationships and guarantees as a result of the crash. And that is where the trouble lies, according to The Economist. The US housing market is the world’s largest asset class, worth $26-trillion. That is more than America’s stock market. The mortgage debt underpinning this is the world’s biggest concentration of financial risk. The prevailing property price growth has meant that the portion of households with mortgage debts greater than the value of their property has decreased from a quarter to less than a tenth. And the banking industry has cleaned up its act somewhat, putting a trillion-dollar buffer in place to protect itself from another crash.

IMAGES: iSTOCK BY GETTY IMAGES

THE REAL RISKS

However, much of the housing market risk doesn’t lie with the banks. This is because since the 1980s, in the US, mortgage lending has mainly been the job of the bond market and not the banks, which is not how things work in many other countries. This means that loans are bundled into bonds, guaranteed and sold as investment products around the world. Global investors own $7-trillion worth of the US mortgage market. When those investors panicked in 2008, the government took over and now 65% to 80% of new mortgages are stamped with a guarantee that protects investors from the risk if homeowners default. Government now controls the size, design and availability of mortgages. The Economist observes that although this situation seems crazy, politicians believe that the thicket of rules and presence of vigilant regulators will prevent unethical lending from taking place. It certainly allows US households to service their debt more easily. However, this position may be wildly optimistic. As housing is seen as one of the few ways in which lower income Americans can accumulate wealth, there is an inbuilt political pressure to loosen lending standards. As a result, housing crises have popped up frequently in American life. It has been suggested that rather than allow the cycle of remorse and repetition to repeat, it might be better

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INTERNATIONAL

At a time when it’s increasingly difficult for a mortgage servicer to turn a profit, the next leg of the tightening scenario may mean higher fees for home buyers Christopher Whalen, senior MD, Kroll Bond Rating Agency

to continue reforming the system to ensure that it cannot be used as a political tool to stimulate the economy. Until this happens, the task of making ﬁnance safer will remain only half done.

The recession before the one in 2008 was largely a byproduct of a tech bubble in 2000 – not froth in the housing market.”

SKETCHING SCENARIOS

While CNN’s views are heartening, it is still worth keeping an eye on the US housing market for South African investors, because – as we learnt when the last bubble burst – the ripples can impact elsewhere. South Africa, for its own socio-political reasons, has struggled to recover from the global economic crisis altogether. While the repo rate has remained unchanged through a third Monetary Policy Committee meeting, many homeowners are struggling to keep up with their mortgage repayments. Credit bureau Compuscan cited new data in September 2016 showing that the number of mortgage accounts with adverse enforcements listed on them increased by 26% from quarter to quarter. Even those accounts with mortgages of R3m and above had been missing payments. “In the first quarter of the year, we noted that consumers were struggling to keep up with their vehicle and asset finance loan repayments. The fact that the second quarter’s data indicated that consumers were struggling to make their mortgage payments is extremely concerning,” says Compuscan senior data analyst Jacobus Eksteen. “On the whole, consumers tend to prioritise their mortgage payments as this type of debt is usually taken seriously by consumers. They have a lot more to lose if they don’t make payments on this type of account, so the trends we’ve seen in our data leads us to believe that consumers have really been feeling burdened financially.” While market circumstances in the US and South Africa don’t correlate directly, the fact that South Africans are already struggling to stay afloat in the maelstrom of internal pressures means more people will battle to weather another global downturn, which some analysts predict may come.

KNOCK-ON EFFECT?

For now, the housing market is stable, but as explained in Jon Marino’s August 2016 CNBC article, the restrictive regulations could critically wound the mortgage market at a time when central bankers are left with few levers to pull to sidestep a crisis. This could grind home sales to a halt and put the brakes on a market that is expected to generate $1.6-trillion in originations this year. Kroll Bond Rating Agency’s senior MD Christopher Whalen tells Marino that mortgage lenders continue to receive pressure on their margins from low interest rates. “At a time when it’s increasingly diﬃcult for a mortgage servicer to turn a proﬁt, the next leg of the tightening scenario may mean higher fees for home buyers,” says Whalen. SOME AGREE, SOME DON’T

Despite these mortgage concerns, for now, at least, the US property market remains strong. In a May 2016 article by CNN’s Paul R La Monica, new home sales in the US were at their highest level since 2008. And thanks to affordable mortgages and a rebound in housing prices, Brinker Capital senior investment manager Thomas Wilson told CNN that consumers should start spending more. He noted recent positive figures from luxury home developers as a good sign. Says Wilson: “There is a trickle-up effect. More first-time buyers are entering the market, which makes it easier for people to sell.” Wilson believes the housing rebound won’t lead to another real estate bubble. “It’s worth remembering that the cause of the most recent downturn is rarely what creates the next one.

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PROPERTY INSIGHTS

THE

RELATIONSHIP-CENTRIC RE TOM SALOMONE

US realtor Tom Salomone explains why real estate professionals should work harder at building relationships if they want repeat clients

he nature of the property industry is changing. The need to build relationships and apply focused eﬀorts is more important than ever. HOW IT WORKED PREVIOUSLY

1880-1970s: the real estate broker-centric era Growth depended to a large extent on growth of home ownership. The broker owned the office, listings and signs, did the advertising and generated the sales leads. Brokers provided agents with tools and workspaces. A 50:50 agent’s split was the norm, after taking off any office fees. 1980-2000s: the agent-centric era Many believed that agents were doing the majority of the work while brokers collected most of the profits. In addition to shifting brokerage commission dollars to the agents, brokers also shifted the desk/office rent/administrative fees to the agents. So property professionals had more power and profits but also more financial responsibility. They also had to undertake their own advertising and generate their own leads. HOW IT WORKS NOW

2000s: the consumer-centric era Technology means consumers can access the internet anytime, anywhere. It has been so impactful in such a short

space of time that it has quickly pushed us into the next era. Millennials are the next big demographic of home buyers – these hyper-connected consumers are changing the real estate landscape. In 1964, 40% of buyers searched the newspapers when searching for homes. The purpose of the ad was to spark interest and importantly, to connect the agent with the consumer so the agent could provide more details.

If anything will make you the best in your careers, live your life with these words: and then some In 2015, close to 90% of US home buyers started their search online. Listing portals provide consumers with incredible information online, not only about property but also about the neighbourhood. It’s about agents learning to provide value in this age of information and embracing these changes in technology.

BIG DATA

When we search the web, book a vacation or buy from the grocery store, data is stored and later analysed. This is used to reveal patterns, trends and associations relating to human behaviour and interactions. It’s the basis for business intelligence, which is about taking information and turning it into data about consumers. In real estate, this translates as using information to create the whole consumer picture: to ﬁnd out who buys what, where and why. And who will sell a house when, where and how. Yes, a knowledgeable consumer still has power but in brokerages today, those who use the data intelligently see the real beneﬁts. Consequently, it will become harder for agents who ignore or fear emerging technology to work within this industry. My global exposure provides a unique perspective: no two countries are alike when it comes to the practice of real estate. I always get asked the same question while travelling: as technology continues to shape our industry, will the role of the real estate agent become obsolete? My answer is no. In 2015, about 5-million homes were sold in the US. Of those, 90% were sold with a realtor member of the National Association of Realtors (NAR) and 5% by other real estate professionals (those who don’t subscribe to NAR’s code of

PROPERTY PROFESSIONAL

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C REAL ESTATE BUSINESS ethics). The remaining 5% were those who sold their own homes. In the US, the trust factor in real estate professionals is high. Top real estate companies won’t lose their control over the market anytime soon.

IMAGES: iSTOCK BY GETTY IMAGES, SUPPLIED

AND THEN SOME

But they need to work at it. Average people do what is expected of them. So an average person goes to work from 9am to 5pm and does a good job. On a sports team, average people do what is expected of them for the time expected of them. In relationships, average people remember birthdays and anniversaries – they do what is expected of them. But great people do what’s expected of them. And then some. The person in your company who is the best probably does a little bit more, whether it’s more phone calls or marketing. That sports team, those Olympics kids, they practice more than anybody else. That’s how they became the best. And in relationships, the best ones don’t wait for birthdays, anniversaries and holidays. They are doing great things all year round. As agents, the things you do in your communities, you do out of your heart. That’s who real estate people are and that is what they do. There has never been a profession where I’ve

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seen more people do more for their communities. If anything will make you the best in your careers, live your life with these words: and then some.

What is NAR? Tom Salomone is the 2016 president of NAR, America’s largest trade association. NAR has 1,2-million members and headquarters in Chicago. Members are residential and commercial realtors including brokers, salespeople, appraisers and property managers. NAR distinguishes between a realtor and a real estate professional. By their definition, only a member of NAR can be called a realtor in the US. Through their code of ethics, members commit to protect and promote the interests of their clients.

THE RELATIONSHIP DIFFERENCE

Real estate continues to be and will always be a relationship-centric business. Practitioners should never underestimate the human factor in the transaction. That’s where we need to master our skills. For instance, drastic cuts on commissions aren’t enough to maintain business. Technology is changing the way everyone lives and we cannot continue operating our business by acting as if it’s not. We need to continuously update our knowledge and adapt our business models to serve new demands. As agents, you have to earn trust. At NAR we spend $40m on consumer advertising a year, educating US consumers about why a realtor oﬀers a competitive advantage. Maybe on a national level, the South African property industry needs to spend time explaining to consumers why their ethics are better than average. And I’ve always said to agents: if your broker isn’t doing that for you then do it yourself. Try to market yourself as an agent and explain why you are the best at what you do.

2016/10/27 11:09 AM

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TOP TIPS CILNA STEYN

things an attorney wishes landlords knew about evictions

While there are procedures in place pertaining to residential evictions, legislation such as the Prevention of Illegal Evictions and Unlawful Occupation of Land Act balances this out. The fact that owners are entitled to obtain eviction orders conﬁrms this right. Divorce is the best analogy. While you may have a court order to get divorced, you still have rights as a spouse if you are in an unhappy or abusive marriage.

2 RESIDENTIAL EVICTIONS ARE TECHNICAL

If an attorney is not well-versed in residential evictions, it can lead to a protracted, costly process. Owners should therefore employ a specialist they can trust. They should also consider educating themselves on the process via books or blogs – an attorney can provide direction on suitable reading material. Additional knowledge will help landlords ease some of the stress associated with an eviction.

3 ALTERNATIVE METHODS

DON’T WORK

Too many owners approach attorneys after trying varying creative – and illegal – approaches to get rid of problem tenants. By this time, the owner has often given the tenant suﬃcient ammunition to delay the eviction. This in turn can lead to frustration, a strained relationship between the landlord and tenant, and an opposed eviction – eﬀectively

wasting more time and money. In terms of arbitrary evictions, once the Rental Housing Amendment Act is promulgated, these actions will be criminalised and punishable by jail or ﬁnes.

If an attorney is not well-versed in residential evictions, it can lead to a protracted, costly process

4 THE COURT ORDER IS NOT THE END OF THE PROCESS

Once the attorney obtains the eviction order, the tenant has a specific time period in which to vacate the premises. If this does not happen, the attorney instructs an officer to undertake the physical eviction. The sheriff determines these costs, which differ between cases. The attorney has little control over this part of the process. In many situations, the sheriff requires assistance from the South African Police Service, which can further delay the eviction. If owners are unprepared for this part of the process, it can also lead to frustration.

5 COMMUNICATION NEEDS TO HAPPEN THROUGH THE ATTORNEY

Once the lease agreement has been cancelled or eviction proceedings commence, contacting the illegal occupant can cause untold problems. For example, if the lease is cancelled and the owner communicates with the occupant, indicating an agreement still exists, it may lead to its tacit reinstatement. This means the whole process restarts. Hence, once landlords give instructions to the attorney, it’s essential to communicate through the attorney.

Cilna Steyn is an attorney specialising in evictions and is the founding partner and MD of SSLR Incorporated. She is the author of The Landlord’s Guide – Property Rental and Eviction, and publishes articles regularly.

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IMAGE: SUPPLIED

1 OWNERSHIP RIGHTS OUTWEIGH OCCUPATION RIGHTS

Evicting a tenant ranks among landlords’ biggest concerns. Make sure there are legal checks and balances in place for owners

2016/10/27 11:11 AM

Century 21’s prestigious accolades programme for top performing agents. The annual incentive programme rewards those who live up to the ethos and performance levels embodied in Century21. The Century 21 South Africa ‘Capture Your Moment’ National Convention 2016 was held at the President Hotel, Bantry Bay, Cape Town on the 14th - 16th September 2016.

Congratulations To Our Winners

Helene Fulton - Agent Of The Year

Rustenburg - Franchisee Of The Year

Upper Highway - Franchise Of The Year

Century 21 East London

Century 21 Dainfern/Lonehill

Century 21 East Rand

Marion Ten Cate Brand Ambassador Of The Year

Century 21 Head Ofﬁce

Century 21 Atlantic Seaboard

Century 21 Bellville

Century 21 Durbanville

Century 21 South Africa recognise the outstanding performance of our top achievers in South Africa and further congratulate those who were nominated for an award. Century 21 South Africa thank our Estate Agents, Principals and allied professionals for their dedication and hard work, to achieve this outstanding growth - there is no better vindication for a brand when growth occurs from within and there is no better prospect for the brand to grow its footprint nationally when it is vindicated by its own people.

THE WORL’S LARGEST REAL ESTATE ORGANISATION

Tel. 011 455 0066 | www.century21.co.za #C21CapturePerfection

south africa

LIFE HACKS JO-ANNE STRYDOM

Do you have what it takes?

WHY DON’T AGENTS LAST?

There are about 30,000 estate agents in South Africa, excluding interns, compared with about 80,000 two decades ago. Influencing factors include finances – new agents often believe that going into real estate is easy money and so do not have the appropriate financial foundation in place. Industry transformation, economic recession and new education regulations (see Property Professional, September/October 2016) also have an impact. In addition, agents are bound by an ethical duty as per the code of conduct and a legal duty to abide by case law and legislation, and they need a drive to survive. Not everyone takes these non-negotiables seriously enough.

WHAT INFLUENCES SUCCESS?

It’s important to stay up to date with the latest trends, area inﬂuences, research and statistics. Your buyers and sellers have access to most of the information you do. To stand out, you need to do more and know more. Learn from the statistics and understand that there will always be ups and downs. Ensure you make provision for the tough times. In reality, it might be more beneﬁcial to join

a reputable estate agency or franchise group. The backing of a well-known agency with good market experience, sound systems in place and training opportunities can only increase your chance of success. Hard work, passion, energy, perseverance and the ability to adapt to change are all important character traits. Word of mouth is your best marketing tool, so make sure you are dedicated to serving your clients; every buyer and seller is important. In addition, make sure you comply with the regulatory bodies’ rules and regulations, set realistic goals and ensure that you are ﬁnancially stable. Everybody needs a home, whether it is to rent, buy or develop – so there is plenty of demand in the industry. It’s a fast-paced and exciting career for those willing to put in the time and eﬀort.

Your buyers and sellers have access to most of the information you do. To stand out, you need to do more and know more

5 REAL ESTATE MYTHS

1. To become an agent is quick and easy. Fact: it takes time, money and effort to qualify. 2. As an agent, you are your own boss. Fact: The industry requires a team effort. You will always work with other agents, even if you are a sole proprietor. 3. All agents earn good money. Fact: In South Africa, the average salary is less than R10,000 a month. 4. You can work your own hours. Fact: Good agents often work 24/7 – clients come first. 5. Simply find a seller and tenant, and you have a deal. Fact: You will be required to be an expert in various fields.

Jo-Anne Strydom has 21 years of real estate experience, initially as a sales agent before moving into training. She studied Real Estate Advanced Practices in Miami and is an accredited real estate assessor and moderator in South Africa.

NOVEMBER/DECEMBER 2016

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he perception of real estate is that it’s ﬂexible, with the ability to set your own schedule and control your income. This is not the case. Instead, it’s unpredictable and the stakes are high. Owning a successful business, even as an agent working as part of a group or franchise, is not something you simply stumble into.

While real estate is an exciting industry, it’s not the career for everyone. Do your research first before making any decisions – starting with these pointers

2016/10/27 11:15 AM

MOTIVATION ED HATCH

Pin down productive vs nonproductive time

PRIORITY ONE: PRODUCTIVE TIME

Realtors help clients make the best possible decisions when buying and/or selling property. If we never did that, we would never be paid. It is the talent we bring to our operating theatre. Productive time is time spent engaging with a buyer or seller. Once a relationship is built and they get to know, respect and trust you, they are more likely to become repeat clients. Consequently, they are less likely to disagree with your opinions or negotiate your fee. 56

PRIORITY TWO: INDIRECTLY PRODUCTIVE TIME

To achieve our first priority, we need to find new buyers and sellers. Indirectly productive time is therefore time spent proactively engaging with lead generation. Without that, we would never find ourselves in our operating theatre. The focus here should be referred clients. Someone they know and respect has raved about you, so they are predisposed to trusting you and are less likely to question your ideas and rates. The last type of client – strangers – will not know you at all so it will take more time to build up a relationship with them.

PRIORITY THREE: NONPRODUCTIVE TIME

After we have gained additional clients and have helped them buy or sell their property, there is still the transactional maintenance needed to reach the settlement. While this is neither productive nor indirectly productive, it is still important – it’s just not the best use of our talents. Based on the above, how did you spend your time last week? Did you put first things first? If you can accurately measure how you spend your working day, week and month, you will become much better at managing your time appropriately and develop the habit of putting the most important things first.

Productive time is time spent engaging with a buyer or seller

Ed Hatch is the president of Ed Hatch Seminars and a senior instructor for the Council of Residential Specialists in the US, UK, Europe, Africa and Asia. Based in the US, Hatch has addressed international audiences since 1990 on topics including negotiation, business and strategic planning, customer service and leadership.

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I was once reading the local paper in a Johannesburg hotel when I came across an article about Christiaan Barnard, the surgeon who performed the first heart transplant. According to the piece, one operation could take anywhere between four and 12 hours. At one point, Barnard was performing five or more transplants a day. How could he possibly pull that off? The maths just doesn’t add up. But it is possible. Let me ask you: are there trained nurses and other doctors (such as an anaesthetist) in the operating theatre? Of course there are. So, when the surgeon walks in, the patient is ready. As author Albert EN Gray said, “A common factor all successful people share is not hard work, good luck or even astute human relations … It is the ability to put first things first.” To do that, we have to decide what our priorities are, then become aware of how good we are at putting them first.

Are you putting first things first? These pointers will give you a good indication of where you need to focus your attention

PROPERTY PROFESSIONAL

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