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With softer demand for property now and stock levels rising, buyers
are in a prime position to drive hard bargains - but this does not
mean that all property is over-priced.
Indeed, serious sellers are increasingly aware of the need to set
market-related asking prices for their properties - with the help
of their agents - and one of the best ways to do this is by compiling
an ARA or absorbtion rate analysis.
The ARA measures how fast homes in each price category within an
area are being sold (or "absorbed") and enables the home
seller to calculate the benefits of price reduction in terms of
speed of sale.
For example, homes priced at R1,75m may only be selling at the
rate of one every six months, while those priced at R1,55m are selling
at the rate of one every two months. If one then looks at how many
of each type of property are already on the market, you can get
a pretty accurate idea of how long it will take to sell a particular
home - and what you might save in terms of holding costs and lost
opportunities by pitching the property at the correct level.
The ARA is best used in conjunction with the traditional comparative
market analysis (CMA) which takes into account prices of comparable
properties currently in the market as well as of those that have
been sold recently.
Comparing accommodation and size of other properties on sale gives
sellers a good idea of competition in their local markets, while
establishing the actual prices paid for similar homes enables agents
to gauge the market value of the home to be listed.
To be really useful, though, a CMA needs to be compiled by an experienced
agent who is knowledgeable about the specific area. It should incorporate
the agent's recent observations and ideally more than one set of
records because figures from a single source may be outdated or
incomplete.
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| Use your equity to upgrade |
Even in the current market, with interest rates - and bond repayments
- set to rise again before the end of the year, there are still
homeowners seeking to upgrade to bigger and more expensive properties
to accommodate a growing family or a change in lifestyle.
And for homeowners who have built up healthy equity in their existing
properties now might actually be a very good time to consider an
upgrade anyway.
The maths is quite simple. Homeowners who bought their homes several
years ago and have not borrowed against their rising value should
have quite a bit of equity - that is they should owe a lot less
on the property than it is worth.
For instance, if you bought a property with a bond of R600 000
in 2003 and the market value has grown to R1,2m, the equity you
have built up is R600 000 plus the capital that you have paid back
on the bond in the past five years or so.
So if you were to sell your property now you would have a substantial
deposit available to buy a new property, which in turn would make
you a good candidate for a home loan at a preferential interest
rate at most banks.
The current market also favours upgrading because there is a wider
range of properties to choose from. Current market conditions also
allow a lot of room for price negotiations.
The one caveat about upgrading now, though, is that you must be
realistic about the market value of your existing property. Prospective
buyers will most likely drive just as hard a bargain as you would
on an upgrade property.
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Home safety is high on the priority list of homeowners
as evidenced by advanced security systems, burglar proofing and
secure fences and gates.
But as parents know, home safety goes further than
that - hazardous substances such as medicines, cleaning materials
and pesticides should be kept locked safely away from curious little
hands.
One aspect, however, that may be easily overlooked
is workplace poisons or hazardous substances that may be brought
into the home and which could pose serious health risks to family
members, especially young children.
Cases of pesticide poisoning, some of them fatal,
are regularly reported and people who work in the landscaping, garden
services and agricultural sectors should take care that residues
on clothing worn when these substances are used in the course of
a working day are not transferred to their homes.
Meanwhile any herbicides and pesticides used in
home gardens should be applied strictly according to the safety
instructions on labels and be securely locked away after use. All
equipment such as spray packs and mixing buckets should be cleaned
thoroughly after use and family members should be warned not to
touch or eat treated plants or play in treated areas until it is
safe to do so.
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| Retrofitting for retirement |
Retirement has come a long way since the days when
senior citizens either moved to an old-age home or took up residence
with their children.
Increasing numbers of retirees now move to security
complexes or stay put in their family homes - most of which then
need to be adapted to make their lives easier.
High on the list of the changes that need to be
made are:
- Wider doorways that will accommodate a wheelchair or walker;
- Bigger windows to let in lots of natural light;
- Power points installed at waist level or higher;
- Lever-handles for doorways and taps;
- Showers with no thresholds; and
- Rails next to baths and toilets.
Of course not all homes lend themselves to retrofitting
for older residents, for instance homes on split levels. Climbing
stairs to get from one section of a house to another is likely to
become a burden once joints are not as supple as they used to be.
Other poor candidates are houses where there is
no easy access to the garden or where garages and storage areas
are far from the homestead.
In such cases, seniors may want to consider buying
more suitable property while they are still active enough to bring
about desired changes. When buying new property, it may be a good
idea to consider homes built with low-maintenance materials and
already fitted with easily accessible appliances.
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