Tips for home buyers from one of the Cape’s recognised experts.

Tips for home buyers from one of the Cape’s recognised experts.

Those who believe, as do most estate agents, that for the typical salary-earning middle class South African there are few better and safer investments than residential property are inclined to assume that those they try to persuade to go this route and acquire property know how to go about avoiding the many pitfalls that lie in wait for the inexperienced purchaser and the buyer who possibly for the first time is trying to become a property owner.

“Our experience,” says Rowan Alexander, a Director of the Brackenfell-headquartered estate agency, Alexander Swart, “is that newcomers to the property market are often nervous and hesitant.  They need all the guidance and reassurance they can get.  The truth is that for the first time buyer the purchasing process is by no means as straightforward as many people seem to think is the case.”

The predicament of the buyer unfamiliar with property dealing is likely, says Alexander, to be complicated by the fact that, although there has recently been a slight slowing down in buying activity, in all the more popular areas of Greater Cape Town many potential buyers are likely to be interested in the homes that come onto the market – especially if these are priced below R2,4 million or, more particularly, below R2 million.  The market here is very much alive and active, says Alexander.

“In the areas in which we operate,” he says, “we can virtually guarantee that homes for sale in the more ‘affordable’ price brackets will attract anything from five to 25 possible buyers.  The nervous newcomer to the market has, therefore, to face the fact that he is up against quite stiff competition.  Sometimes this is not too serious, but the situation calls for boldness and instant action if the home is not to be ‘lost’ to another buyer – and this can cause considerable anxiety for the person new to property buying.”

Equally confusing, says Alexander, is the fact that the would-be buyer, scanning the property websites and reading the printed media, will be faced with a bewildering variety of choices and this can lead to a feeling of being overwhelmed.  It has, he says, even been known to lead to buyers giving up their search for a home.

So – what does Alexander suggest the buyer new to the property market should do?

As a first step, he says, he should seek the advice of a mortgage bond originator or his bank to find out just what size bond he will qualify for – presuming, of course, that he has an unblemished credit record and is therefore eligible for a loan.  The originator will then give him a written pre-approved confirmation of how much the bank will be willing to advance to him.

This pre-approval rating, says Alexander, will show the agent and the seller that the buyer is serious and not just ‘testing the water’ as so many people like to do.  It will also put him in a position where any offers that he makes will have a far better chance of being accepted because the seller knows that finance will be immediately available.

The second step that the new buyer should take, says Alexander, is to team up with an estate agency and an agent that he feels truly comfortable with and that he can trust.  This is not always possible, but it is a goal very definitely worth pursuing.

“Certain agencies have over the years established a reputation for fair play and for having a caring and responsible attitude – and these are the agencies that the buyer should work with.”

Experienced agents, says Alexander, help the buyer to identify his specific needs and likes.  In some cases he may even put these in writing to clarify his thinking.  Once they are defined the agent will then try to match from his stock offerings what the client genuinely needs.  Obviously in most cases not all the specified points will be met, but once the agent has these preferences defined he can do a more efficient job.

By way of contrast, says Alexander, a bad agent will decide what he wants to sell the client and will hammer away at trying to get him to agree.  Regrettably some of these agents will always succeed in the short term.

When viewing property, says Alexander, the potential buyer should learn to select in his mind the best of the first two that he sees and then compare this with the third property he visits, again writing off the less satisfactory one – and this process should then be continued until he has found the home that establishes his benchmark and suits him best.  However, Alexander warns, unless the search is to go on forever, the buyer may at some stage have to accept a compromise in one or other aspect.

“We do have buyers who find their dream home at the right price in a very short space of time.  However these are the exception rather than the rule,” says Alexander.  “For most the perfection is not reached until the buyer moves on to his second or third home.”

Many inexperienced buyers, he adds, worry that they will overpay, that they are being conned into accepting a price that is not market-related.  If this is their concern they should insist that the agent gives them in writing a list of their recent sales, with details of how long the property was on the market and how close the accepted offer was to the original list price.  Experienced agents, he says, do not overprice because they know that today’s buyers are ‘savvy’ and cannot be duped.  If, however, the record shows that the agent’s homes took on average, say, four months to sell and that the accepted price was usually 10% or more below the list price these are very definitely grounds for mistrust.  (Alexander Swart’s last 10 residential sales took place on average within 37 days of the home being listed and at 97 % of the asking price.)

For further information contact Rowan Alexander on cell phone number 082 581 3116 or by email rowan@asproperty.co.za.