WHAT IS REAL ESTATE?

“I am the basis of all wealth, the heritage of the wise, the thrifty and prudent.
I am the poor man’s joy and comfort, the rich man’s prize, the right hand of capital, the silent partner of many thousands of successful men.
I am the solace of the widow, the comfort of old age, the cornerstone of security against misfortune and want. I am handed down to children, through generations, as a thing of greatest worth.
I am the choicest fruit of toil. Credit respects me. Yet I am humble. I stand before every man bidding him know me for what I am and possess me.
I grow and increase in value through countless days. Though I seem dormant, my worth increases, never failing never ceasing, time is my aid and population heaps up my gain. Fire and the elements I defy, for they cannot destroy me.
My possessors learn to believe in me; invariably they become envied. While all things wither and decay, I survive. The centuries find me younger, increasing in strength.
The thriftless speak ill of me. I am trustworthy. I am sound

I AM REAL ESTATE…

1. THE RIGHT PRICE
Every house will sell - it is just a matter of when and for how much. The key in today's value-sensitive climate is to listen to the market and adjust both the price and the marketing programme if necessary. For sellers, the natural inclination is to try and price the property as high as possible and to listen to the agent who offers the most money. The agent should provide a comparative market analysis because buyers purchase by comparison, so the seller needs to see how his property shapes up against others that have been sold in the area.

2. THE RIGHT AGENT
Sellers should not appoint an agent based on the highest valuation received. Overvaluation is a leading cause of a poor sales result and is unfortunately rather prevalent in today's competitive real estate environment. Also consider the company reputation and ensure that the agent is registered with the Estate Agency Affairs Board. An agency's strike rate is considerably important. This demonstrates how many homes the agency actually sells in relation to how many they attempt to market.

3. SOLE MANDATE
If the seller builds a relationship with an agent, and then awards them a sole mandate, the agent is answerable to the seller and will provide much more information. They are then also contractually obliged to do their utmost to market and sell the home in the allotted time frame. In contrast to the sole mandate, multi-listing on an open mandate property often results in agents prompting buyers to submit lower offers, simply to ensure that they are the first to secure an offer for the seller. Informed buyers may therefore make use of multiple agents to bid the price down.

4. MARKET KNOWLEDGE
It is the agent's responsibility to provide the seller with enough market information about the property in order to determine the correct price. In addition, sellers need to be aware that buyers these days do their homework and often research an area before purchasing property there. Tools such as Property 24's Property SPI are accessible to the public and can provide a buyer with deeds office information and rough price averages for the area. This tool however only provides a very general overview of the area's market.

5. SHOW DAY PREPARATION
Everyone knows that first impressions are lasting impressions, therefore neat and tidy homes make a positive impact. Curtains should be open, light fittings cleaned and all clutter packed away. Colourful pot plants and garden beds also work wonders at an inexpensive cost. The uncomfortable feeling of an unclean house causes apprehension, and the buyer will start to disengage. Sellers should try to look at their home through the eyes of a potential buyer by stepping back and looking at the home objectively. Sellers need to package the home effectively, and homes with pets and smokers need extra attention to odours.

6. TIME PERIOD
It is critical from a seller's perspective that from the 2nd to 12th week after the property is put on the market that the bulk of buyers in the market - in that price range, in that area, and during that time-become aware of the property, and view it over this period. During this critical time-frame it's vital that they see the property positioned at the right price. If not, and the period is extended beyond week 12, then you are aiming at a 'much reduced quantity' of interested buyers, and then only if you drop the price.

7. SIGNING THE OFFER
Price is not everything. A higher price can mean a lot more suspensive conditions that may leave the seller with no sale at all. When a seller receives competing offers, they should always look at all the terms and conditions and maybe rather choose a lower price with fewer suspensive conditions. It is also important to share information about the home with the agent and make sure that what you want excluded is filled in on the offer to purchase. Sellers should also make sure that their tax affairs are in order, otherwise this might cause delays.

8. ADEQUATE MARKETING
The marketing of a property should take place in four parts: word of mouth; for sale signs; show days and printed media. A seller might think that having five agents work on their property would result in five times the exposure; however, this is not the case. The effort required to secure a seller's trust by way of a sole mandate and thereafter deliver a comprehensive and focused marketing campaign with carefully constructed advertising is far greater than the effort required in securing a handful of buyers through poorly focused marketing initiatives while waiting around in the office for the right buyer to come along.

9. DON'T INTERFERE
An innocent word in an effort to assist the sale to the buyer may result in a lost opportunity. The agent is a professional, is being paid to negotiate the best outcome, so let them do their job. When viewing a home, prospective buyers must feel at ease, unobserved, comfortable and free to voice their feelings. The agent knows the buyer's requirements and can best emphasize the features of the house. Sellers should not discuss anything concerning the sale with the client, and never apologise for appearances as it only accentuates or distracts.

10. FIX IT UP
Fix things that are broken. A neglected home makes the buyer feel that he has to spend a lot on maintenance before the house will be good to live in. Many a potential purchaser has turned down a property because 'he did not like the look of it', yet the accommodation, position and price would have been perfect for him. Sellers should make sure that all exterior paintwork is in good condition, flower beds and lawns are trimmed and weed-free, roof and gutters are in good repair and the front entrance is clean and inviting. A professional steam cleaning will also rejuvenate a tired-looking wall-to-wall carpet, and a good polish will bring out the natural beauty of a wooden strip floor. All lights and fittings should be functional and globes replaced where necessary.

Buying a home is one of the smartest investment decisions anyone can ever make – and now there’s hard data to prove it.

Saul Geffen, CEO of mortgage originator MortgageSA says there is a lot of conflicting advice being given at the moment because the market has cooled.

“But the argument that some commentators are putting forward that people should rent because house price growth rates have moderated is spurious. Investing in the property market is a long-term decision that should not rest on every wriggle in interest rates or the current pace of price appreciation.

“Buying property is one of the basic tenets of long-term wealth creation and that should be at the top of people’s minds.”

Geffen points out that it is regular surveys of consumer finances, the US Federal Reserve Board has consistently found a huge gap between the wealth piled up by homeowners and that accumulated by renters.

“In short, homeowners are significantly wealthier than renters right across the income spectrum,” says Geffen.

“Home ownership builds wealth in two ways: through the ‘forced savings’ of paying off a bond, and through appreciation - the rise in the home’s value over time. And the sooner you get into the game, the quicker you can get that appreciation working for you.

“On the other hand, the longer you rent, the harder it becomes to buy. You fall further and further behind.”

He says, however, that consumers are most likely to win by owning, rather than renting, if the following are true:
* They plan to stay put at least three years and preferably more. In most markets, it can take three to six years for a home to appreciate enough to offset the costs of selling and moving. In markets that have had a great run it’s best to enter a property investment decision with a five-year investment horizon or longer plan to ride out a real downturn.

* They’re psychologically prepared. Home ownership means dealing with whatever comes up - from noisy neighbors to clogged plumbing. You can’t just call the landlord for help or pack up and move as easily as when you were renting.

* They have some extra savings. Homebuyers who spend every cent they have buying a house are often blindsided by repairs, maintenance and all the other costs of owning a home. Then they go into debt trying to keep up their current lifestyle. Smart home buyers make sure they have an amount in savings at least equal to two bond payments after the deal closes, and preferably much more.

* They manage their money well. “The ‘forced savings’ aspect only works if you can keep your hands out of the cookie jar. Otherwise, it’s too easy to drain away your wealth with home equity loans, further advances and second bonds. If you’re the kind of person who lives on credit cards and doesn’t know where the money goes, you’d be wise to clean up your financial act before you go hunting for a house.”

Many homeowners do not have a full understanding of how the asking price of a home should be established. They either base their decision on what they need to get out of the sale in order to buy another home or they base it on what they paid and adjust for inflation. Another mistaken concept that prevails is that the real estate agent sets the asking price. The truth is that buyers are the ones who establish what your home is worth in today's market.

When an agent comes to your home and shows you a competitive market analysis, it is made up of homes that have recently sold, homes currently listed, and homes that were listed but did not sell. What these numbers represent are what the buyers were willing to pay for a home similar to yours (the solds), and what the buyers were not willing to pay (the expired listings). It also gives you a gage as to what your competition is (the currently listed).

It is important to take these numbers into account when establishing the price of your home. If you price your home over what the buyers have recently been willing to pay, then your home will most likely not sell. One of the biggest mistakes a homeowner can make is thinking that they will start with a high price and then come down on the price later.The reason this is a mistake, is that the first two weeks that a home is listed is the hottest time on the market. Buyers who have been looking for a home for a while are always excited to see a new home listed for sale. However, most buyers are smart enough to have shopped around and know what houses are selling for in your area. If your house enters the market priced higher than all the rest, the buyers won't even bother looking at it. Later, when you decide to lower your price to what other homes are selling for in your area, it will be too late. You will have missed the initial wave of buyers that a new listing creates. If buyers do look at your home later, they may wonder if you lowered the price because something is wrong with your house. They may be more careful when inspecting the house, which may bring up more problems to fix.
Time on the market always works against you. When all is said and done, you may end up having to come down on the price even farther than your neighbors, just to get it sold.The smartest way to price your home is to be very competitive in the beginning. Sometimes you'll get so much interest in that first wave of buying, you'll end up with two or more offers at the same time. If several buyers are interested in the same property, it can drive the price up higher.

Finally, keep in mind that real estate agents should always advise you to price you home at fair market value. You should hire an agent based on their qualifications and not on how high they are willing to list your home. Remember that in the end it comes down to what the buyer is willing to pay and not what the agent is willing to list it for.