1.1.1.
Comparative Marketing Analysis Prepared for Mr & Mrs Naidoo 5 July 2013
Property Details : 51/53 Lakeside Drive, Unit 15, Valleyview, Broadlands, Mt. Edgecombe ERF 2618, Portion 0, Valleyview 128 Square Metres – Sectional Title Residential Transfer Date Date of Purchase Purchase Price
: 28/02/2006 : 16/01/2006 : R 725 000
Bond No. : SB11145/2006 Bond Amount : R 725 000 Financial Institution : First National Bank
I have compared your property with other properties that are of similar size and features and also obtained a Property report from Windeed regarding the market trends in your area. I have studied current and prior copies of the Sunday Tribune, and local weekly publications to see properties that were sold and currently on the market that resembles your property. During my research I have looked at websites such as Property 24, Gumtree, Junkmail and OLX. I have also looked at a FNB survey dated 08/04/2013 which reflects that there is a demand for properties nationally and there is a constrained supply of residential stock in the market. After perusing the Property Report in May 2013 the sales of sectional title units was 16 units. In your area there doesn’t seem to be a shortage of stock contrary to the FNB survey. Buyers are spoilt for choice, this gives the buyer bargaining power to negotiate prices. Also the survey indicates that 89% of home sellers are forced to accept an asking price that is less than the list price. 8.
With reference to the Property report a unit in your complex was sold for R 900 000 in December 2012, your property is 7 square meters larger than the property sold and features of the sold property is very similar to your property. The price per square meter at that time was 7.438. I have visited the Gumtree Website and noticed that a property similar to your property and very close by to you was advertised by a well known Agency in January 2013 for an amount of R 1 500 000 but 6 months later it was re-advertised for R 1 280 000 on 10/06/2013. Subsequently another advertisement was placed for the same property for R 1 250 000 on 27/06/2013. The two adverts in June 2013 was placed by the owner and clearly stated that no Estate Agents are to contact him. It is be quite clear that the property was priced unrealistically. Based on the above information I would say that property is valued at R 1 000 000. I would also like to thank you for giving me the opportunity to provide you with a realistic selling price for your most valuable asset. Please do not hesitate to contact me should you require any futher information. I have attached the Property Report obtained from Windeed for your perusal. Kind regards Vikash Samsundrah
9.
1.1.2. Overpricing by sellers
When doing the CMA I came across properties in marketing area that have been on the market for a very long time. Every time the property is re-advertised the price is lower. This means that the property priced unrealistically and the Estate Agents are listening to the seller to get the mandate and not what the market is telling them.
1.1.3. I live in a predominantly Indian area with low, middle and high income earners. There are also other race groups who have bought properties in my area. We are located central to King Shaka airport, Umhlanga and Durban North. Schools and shopping centres are close by including bus and taxi routes. I would like to say that 80% of people are employed in my market area. Ownership of properties has increased as all council owned flats were converted to sectional title units and tenants were given ownership of these flats with minimal costs.
1.2.1. 3 226 933.71
1.2.2. Mpumalanga Eastern Cape North West
Although the number of properties viewed are different, if you look at the graph the average views are very similar.
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1.2.3. Yes 1. Based on the properties viewed this website is very popular and you will reach a wider
range of people. 2. The analysis is very detailed and this will give you a concise vision on how to market your rental property. 3. You can get assistance to make sure that you advertise in the best way to reach your target market.
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2.1.
The Alienation of Land Act (no. 68 of 1981) This governs the sale, exchange or donation of immovable property, whereby
agreements must be in writing signed by relevant parties or their authorized representatives and include a full description of the property and purchase price in order for the agreement to be enforceable. The act also ensures that clauses in an agreement of sale are mandatory and that omissions of these clauses and information will render the agreement null and void. Special protection is given to a purchaser where the sale of property is paid in installments.
The Sectional Titles Act (no. 95 of 1986) The acts provides for the division of buildings into sections and common
property with the acquisition of separate ownership in sections and joint ownership in the common property. All owners in the complex form the Body Corporate. The Body Corporate controls and runs the scheme in accordance with the requirements of the Act and management and conduct rules. Trustees appointed by the Body Corporate attend to the administration of the Body Corporate. Every owner has to pay a levy for the upkeep of the building excluding the inside of their units. Insurance, maintenance, general lighting and managing agent fees are all included in the levies. This is all governed by the sectional title act as there are procedures put in place to take further action should owners not pay the levy.
The Estate Agency Affairs Act (no. 112 of 1976) This was established to regulate the activities of estate agents by implementing
a code of conduct as well disciplinary measures for estate agents who are in breach of these rules. The act also makes provisions that all estate agents cannot operate without a valid Fidelity fund certificate by the Estate Agency Affairs Board. To protect the public from estate agents who act unlawfully and who do not act in the best interests of the client.
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2.2.
Estate Agent Is someone who is mandated by a seller to sell their property or find suitable tenants to rent their property. The estate agent is paid by commission only on transfer of a property or when a suitable tenant is found.
Lessee Is a tenant who pays rental to a landlord for use of his/her property during the period stated in the lease agreement.
Lessor A landlord who rents his property to a lessee, and receives rental income from the tenant for the use of his/her property.
Valuator Someone who carries out a physical inspection of a property and does market research to establish a monetary value of the property. *********************************************
2.3. Withdrawal of the Fidelity fund certificate Fine not exceeding R 25 000.00 or such high amount as prescribed by the Minister of
trade and industry which is payable to the Board
Criminal charges
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2.4. This is when the estate agent is mandated by the owner of immovable property to handle the day to day activities. This involves looking for tenants, collecting monthly rental, maintaining the property and the upkeep of the grounds. 19.
3.1.
Single residential It is an individual freestanding unattached home with a yard surrounding the house. Basically a single house on a plot of land used for residential purposes.
Commercial property Is property that is zoned for business purposes such as shopping centres, office buildings, restaurants, hotels, warehouses and factories. If an investor invests in this type of property the intention is to derive an income from it.
Industrial property Is property used for industrial purposes. You will find that this property has manufacturing plants, warehouses and factories. Industrial factories are situated away from residential and commercial property and have a mixture of tenants.
Residential sectional title unit It is a unit that is among other units in a sectional title complex used for residential purposes. This owner is responsible for the upkeep of his unit and the surrounding area which is known as the common property. Each owner has an individual share in the common property. The upkeep of the common property is done from the monthly levy collected from the owners which levy also pays for the insurance of the entire complex among other expenses.
Agricultural Property It is land that is suitable for farming i.e. planting crops and harvesting them such as fruits and vegetables and also land whereby livestock graze from such as goats, cows etc. A farmhouse is situated on this land where the farmer resides.
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3.2.
Expropriation This happens when the government has a need for land that is owned privately and the government compensates the owner of the property for taking the land away from him. This land is then used for the benefit of the public e.g. building highways or roads etc.
Title Deeds Property that has been transferred in your own name makes you the legal owner of the property. To prove that you are the legal owner, the description of the property as well as your full name and I.D. together with all relevant information e.g. date of transfer etc. are recorded on a document called the title deed. The title deed is a legal and binding document and no one can take the property away from with your written consent. Copies of the title deed are kept at the deeds office.
Servitude It is a registered right that a person has over another’s immovable property. The servitude is registered at the deeds office and it is also mentioned in the title deed. There are 2 types of servitude. Personal – where it serves a person and Praedial – where it benefits a piece of land. A person wanting to buy a property that has a servitude registered on it will be reluctant to buy as the property serves another person or land. Servitudes restrict full ownership and enjoyment of the immovable property.
Building restriction boundaries This is also known as a building line. This means that this is the closest that the building can be built to the boundary as set out by the municipality or the subdivision of the building. In this area no buildings or any other structures can be built.
Rezoning This is also known as the Amendment Scheme. This is when you change the existing zoning of immovable property or land e.g. when change residential property zoning to business provided you meet the criteria for the rezoning set by the municipality.
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3.3. A conveyancer is an attorney with a post-graduate qualification who by law is the only person who can register the property transactions in the Deeds Office. This is necessary to ensure the protection of all the parties involved in the transaction. They are also responsible for registering of bonds and any other restrictions, servitudes or any other clauses that will have an impact on the future sale of the property. They also handle the cancellation of existing bonds and estate late matters whereby together with the executor of the estate they do all transaction of the property. All conveyancers are regulated by the Law Society through the Legal Practice Bill 2012.
23. 1. I definitely feel that I have gained more insight into my particular market place. I have
found that carrying out the CMA has been a very interesting and a rewarding experience. Having a CMA done also gives you the confidence to approach a client as you have factual information to support the pricing of his property. I believe that the CMA is a priceless tool and it will no doubt allow me to be more professional in my approach when dealing with a seller. Your CMA with regard to the price of a property might not be what the seller wants to hear as he might have some unrealistic price in mind but it is a risk that we have to take as an Estate Agent, we might or might not get the mandate to sell his property. Your advice to him will definitely ring a bell somewhere down the line when his property cannot sell due to an unrealistic asking price. I now totally understand the importance of a CMA as I can jeopardize the time period I am given to sell a property i.e. accepting what the seller asks me to sell his property for an not getting any buyers but the time my mandate will be expiring is drawing nearer and nearer. Also continued advertising and no buyers in sight because of unrealistic pricing of the property will make the property stale. This will also raise eyebrows with regard to the condition of the property.
2. The activities of an Estate Agent involve making very important financial decisions such
as buying, selling, renting a home or investment property and without proper legislation this could leave the door open for corruption, dishonest dealings, money laundering and this could seriously affect the economy of our Country. With legislation, the general public is protected from fly by night Estate Agents who are only interested in enriching themselves rather than putting the client’s interest first. As an Estate Agent you will be acting on behalf of a seller, buyer, investor or landlord and if you are free to do as you please then this will result in emotional and financial stress / loss for your clients. An Estate Agent provides a service to his clients and without legislation the service levels and standards of the industry will be jeopardized. The Estate Industry is being tarnished because there are Estate Agents out there who do not want to be regulated and obey legislation. Having high customer service levels and standards is very important in any industry and if the activities of an Estate Agent are not controlled then this will negatively impact on the real estate industry.
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