Buying A House Can Be A Costly Journey Without An Experienced Guide
The guide comes in the form of a professional and experienced estate agent.
But how do you know you’re getting an experienced “guide” and not being led astray?
The answer is simple: a Fidelity Fund Certificate (FFC).
Why do estate agents need a Fidelity Fund Certificate?
– A FFC is a certificate issued by the Property Practitioners Regulatory Authority (PPRA). It proves that an estate agent is adequately registered and trained with their regulatory board and whose conduct will adhere to the PPRA’s standards.
– The Estate Agency Affairs Act (112 of 1976) states that all estate agents must be registered with the PPRA and possess a valid FFC to operate as an agent.
– The Property Practitioners Act (22 of 2019) replaced the Estate Agency Affairs Act on 1 February 2022 and contains the exact requirements for obtaining FFCs.
– An FFC needs to be renewed annually, and no agent may trade with an expired certificate FFC.
What happens if an estate agent does not have an FFC?
– According to the Act, it is illegal for an agent to operate without a valid FFC. An agent may also not claim a commission for services rendered when their FFC had expired.
– In most cases, this is a clear-cut scenario — if an agent does not have an FFC, they may not operate and may not claim a commission.
What if it is not the estate agent’s fault that their registration is not up to date?
– As with any registration process, there may be delays in processing applications and renewals. However, an estate agent may operate legally and claim their commission if they can prove that they submitted their application or renewal documents on time.
However, when an estate agent relies on their principal to complete the necessary application or renewal process, and the principal fails to complete the registration, the onus remains that of the agent to follow up. In short, the agent may not collect any commission for services rendered until they obtain their FFC or the necessary proof that the application or renewal is in process.
Must the estate agent’s FFC be verified before services are rendered?
– It is advisable for all Sellers to verify an agent’s FFC or obtain a copy beforehand. However, many agents continue operating as usual without a valid certificate.
-The conveyancing agent (a.k.a. transfer attorney), responsible for paying the estate agent’s commission, is bound by law to obtain proof of the agent’s FFC before paying the commission.
– If any party to the sale becomes aware that the agent does not possess a valid FFC during the property transfer, the conveyancer is bound by law to refuse the agent their commission.
What recourse do estate agents have when they lose out on their commission?
– In a case where an estate agent loses out on their commission because of a lack of a valid FFC, where the fault is not their own, the agent will have the right to take the case to court. However, they will not claim against the purchaser or conveyancer but rather against their principal/agency or possibly even the PPRA itself, whichever caused the delay in FFC issuing or renewal.
– The use of Fidelity Fund Certificates and agents’ obligation to be registered with the Estate Agency Affairs Board are steps that ensure a safer business environment for property practitioners, purchasers, and sellers. However, when events such as this occur, it puts the estate agent in an uncomfortable position. They will have to fight for their ability to go on operating within their field.
New Rental and Property Rules
The draft Rental Housing Regulations proposed changes for owners and tenant’s properties in South Africa, covering a wide range of issues, including lease agreements, deposits, rent increases and damages to property. The regulations also outline the rights and obligations of tenants and lessors, with a complete mediation and tribunal process outlined should a disagreement arise between the two parties.
– Landlord may not require payment of a rental deposit greater than two months’ rent, in addition to a reasonable deposit for utilities, keys, remote controls and the like
– If the deposit is equivalent to one month’s rent, the landlord may require the existing deposit to be “topped up.” This will be by an amount equal to the amount by which the rent payable has been increased, i.e. one month.
– The landlord may increase the rent payable in respect of any tenancy. This is provided all of the following are complied with:
*The landlord shall give the tenant notice in writing of the increase;
*The day upon which the increased rent shall become payable shall be not less than two calendar months after the date on which that notice is given;
*That notice shall specify the amount of the increased rent, and the rent shall not be increased within 12 months, and after that, on an annual basis, after the date of the commencement of the tenancy;
*Where the Tribunal has made an order which is still in force, the rent shall not be increased to an amount above the amount specified in the order
Rights and obligations of Tenant
The tenant has the following rights and obligations, subject to the lease agreement:
– Pay the rent as and when it is due and payable under the lease agreement;
– Ensure that the premises are occupied principally for residential purposes;
– Keep the premises reasonably clean and reasonably tidy;
– Notify the landlord, as soon as possible after discovery, of any damage to the premises or the need for any repairs.
On the termination of the tenancy, the tenant should:
– Vacate the premises;
– Remove all their goods from the premises;
– Leave the premises in a reasonably clean and reasonably tidy condition, and remove or arrange for the removal from the premises of all rubbish, failing which the deposit will be utilised for the cleaning and removal of rubbish. This includes the outside area and garden.
– Return to the landowner all keys and security or pass cards. This includes any such devices provided by the landowner for the use of the tenant;
– Leave in or at the premises all other items provided by the landowner for the tenant’s use.
– ensure that usage and other accounts are paid in full
– Repair items which are broken or damaged, failing which the deposit will be utilised for repairs and replacement.
What do estate agents do besides advertise property for sale and take prospective buyers to view them?
- Agents are not merely salespeople, as most imagine. The lengthy, complex transaction process requires much more skill and knowledge than just possessing a good sales patter.
- The internet completely revolutionised how we shop for everything, from clothes to houses. Consequently, these days, estate agents seldom play a vital role in the location of our dream homes. Most buyers start their property search online – but that was never their core function.
- Many people equate the role of an estate agent with that of a travel agent. Still, in reality, they are very different as estate agents are not sales agents but rather facilitators of the complex sale transaction.
- The sale and purchase of property is not the simple transaction one might imagine. The actual exchange of money and goods only happens at the end of a lengthy process. This comprises multiple steps which require more than a nodding acquaintance with diverse fields, including marketing, legal operations and finance.
- The first and most essential step is an accurate property evaluation, which determines the final sale price achieved and the length of time a home spends on the market. This is especially important if the seller is buying another home subject to selling his current property.
Duty of a professional estate agent:
- 1. Share important information about the area
- A good agent will have information about local council rates, crime statistics, schools, recreational facilities, resident demographics, recent property sales and factors like public transport.
- They can then provide you with all the facts, figures and data you need to assist in setting a realistic sale price.
- An experienced agent has the expertise and in-depth knowledge to ascribe the property’s most accurate and market-related value. This will enable sellers to determine a reasonable selling price and the limit to which they can negotiate.
- Once this critical step is complete, an agent’s leg work begins.
2. Skilled marketers
- To sell a home for the highest price in the shortest time requires a skilled marketing strategy utilising the correct online and print media, a strong client and industry network and extensive databases.
3. Able to stage a home
Agents will also offer advice about how to stage your home to its best advantage before conducting viewings with the least possible disruption to the seller’s daily lives.
4. Legal knowledge for both parties
- Very importantly, a skilled real estate agent will have the experience and legal knowledge needed to negotiate a deal that benefits both parties.
- Buyers often don’t realise that although agents may act on the seller’s behalf, they inevitably provide value to the buyer. They act as a link to ultimately negotiate an agreement that best suit the needs of both parties involved.
- The difference between a good and weak agent is most evident – good agents negotiate calmly and rationally, preserving a pleasant atmosphere at all times and relying on hard facts to back up all their statements and arguments.
- Agents are also strictly bound to a code of conduct. This protects both parties against one-sided contracts and costly delays that could quickly occur if an uninformed seller has overlooked a critical transaction component.
- Like any legal transaction, buying or selling property involves reams of paperwork peppered with legalese and financial jargon. This is where estate agents are well worth their weight in gold.
5. Administrative management
• Real estate agents manage the administrative aspects throughout the process. Their thorough knowledge of the relevant legislation that regulates property transactions and all documentation and certification required to meet all regulatory requirements will ensure a seamless conclusion of the sale.
6. General guidance and advice
- Real estate agents also offer guidance and advice and iron out any glitches that occur along the way. It is not uncommon for issues to crop up, and they ensure you, the client, receive the highest level of customer care.
- The best results are achieved by appointing an experienced agent with accredited knowledge about the entire process. They also need to be up to date with all the current laws.
- There’s the old adage that you get what you pay for. This holds true in real estate. Delivering a hands-on, bespoke service to clients in what is often the most significant transaction of their lives takes time, hard work and dedication.
The Harcourts Oyster Team Celebrate Their Recent Market Share Gains – Life’s good on the canals.
Banks are lending despite interest rate pressure.
We live in a time of uncertainty regarding inflation, employment, and various other market influences, but the property market continues to flourish. Now that we have a new interest rate rise of 50 base points, what does this mean to the market? In essence, banks are still lending. Sometimes when the financial situation is constrained, it could be the best time to look for bargains.
- Even though we have just experienced another interest rate hike, the property market is still better than in 2008, when the property bubble burst and house prices plunged. There is always some good news. The market is robust, the banks are agreeable and more people are still moving away from the cities.
- The recent increase in interest rates has not dampened the banks’ appetite to lend. In general, we have seen an almost 10% increase in the ratio of formally granted bonds for April, year-on-year, which is significant, coming off the high base set last year. Property sales will continue.
- With some banks offering loans of up to 105% for qualifying applicants, there are options for aspirant buyers to get into the market. It might be a risky decision at times, but if getting into the market is the goal, there are options.
- Buyer activity remains strong, especially in the middle-priced segments, R1,5m – R3m mark. Stock is still strong in this segment, although possibly not as optimistic as 18 months ago.
- Demand for homes priced at fair market value should not be negatively affected. Everyone wants fair market value, and it’s not too much to ask.
- We are still in the single-digit territory with the prime lending rate below 10% as before the pandemic, and there are opportunities for buyers across all price bands to invest in property. The best time to buy is now.
Paint like a Pro: Some tips
Prepare your substrate properly. We can’t stress the importance of this step enough. Cracks, peeling or flaking areas must be sanded, scraped or smoothed prior to applying
new primer and paint. Otherwise, the thicker, heavier new coat will end up pulling the old paint off the wall and you’ll have wasted the money you spent on your new paint as well as your time.
Protect surfaces. Time spent covering furniture, cornices, door handles or other areas you don’t want to be painted is time well spent. Plastic sheets, drop cloths and plastic packets are your friends. Remember to remove light switch covers, as well.
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Be mindful of the climate. Humidity is no one’s friend, especially when painting. If you live in a province like Durban, you’ll need to be extra mindful of when you get started. Of course, you don’t always have a choice. If you need to paint during a humid period, be sure to take it slow. Make use of slow-drying paint so that you can correct any errors before your next coat. Just make sure you don’t lay down too many coats or the finished surface will look sloppy.
Buy quality tools. High-quality utensils make all the difference. If you’re buying high-quality paint, don’t cut costs with your brushes and rollers, lest you end up using more paint than you need by re-applying. Good painter’s tape is another essential you can’t forget!
Analyse your surface and know how much paint you’ll need to coat your roller with. Heavily textured walls like concrete will require more paint on your roller, while smoother walls with little texture will end up appearing as though you’ve created a texture you don’t want if you use too much. A clean and smooth surface will benefit from a paint-primer product, but a separate primer and paint are always the best bet. Use bonding primers for surfaces like glass or previously high-gloss areas.
Work your way down. Apply paint from the ceiling downward. You can always tell a surface is painted by an amateur by the drip marks, splatters and inconsistent strokes. Paint over your mistakes as you work your way down. Leave an area alone once it’s started to dry, otherwise, you’ll end up with unsightly marks and colour streaks.