Simon’s Town Real Estate News

Simon’s Town Property and the New Credit Act

The impact of the new National Credit Act (NCA)is so enormous that it will implode growth in the already slowing housing market. According to Mr. Erwin Rode, economist for Rode and Partners, “more interest rate increases will be unnecessary, because the National Credit Act
will reduce the strong demand for credit in the economy.” [Burger Monday 2 July 2007]

The new NCA is designed to ensure that credit applicants can repay the credit due to strict criteria . The act place the onus on the lending party and if a bank for example lend you money and it can be proven that you were not credit worthy the bank cannot re-claim the money
form you.

The NCA will have a direct impact on you if you have a residential property in the market. In Simon’s Town we have seen that it takes on average 120 days to sell a home. If the NCA takes more people out of the market it will take even longer to sell a home.

Selling a home used to be a relatively simple procedure but it now becomes complicated because the seller does not know the financial position of the buyer.

Qualification of the buyer has become a more critical task when you are selling your home.

Prof. Francois Viruly, a property economist at the University of the Witwatersrand, believes the NCA will impact most on the middle to lower ends of the market en more so in the buy-to-rent market where marginal investors operate.

The opposite reaction is also possible for the buy-to-rent investors where people may decide to rent rather than buy because they find it to difficult to qualify for a loan.

click to enlarge The only proof that the act will impact the market is the time it takes to sell a home and Indexes like the ABSA House Price Index. The latest ABSA Index, issued on the 2 July 2007, shows that the house prices in the middle segment of the market declined to a nominal 14,9% year-on-year in June 2007. But they indicate that it’s too early to measure the impact of the NCA on house prices.

What do you do when you want to sell your Simon’s Town Property given the new Credit Act?

• Always determine the price to sell your home and never price to negotiate. An estate agent like SimonsTownRealty.Info will show you the difference between the two and the impact it may have on your transaction.
• Never use an estate agent who wants to please you with an unrealistic selling price just to get the listing. You may chase the pot of gold at the end of the rainbow.
• Ensure that you choose a real estate agent who does whatever is possible to financially
  qualify the prospective buyer of your home.
• Use a good bond originator and see if you cannot negotiate as a condition of the sale that the buyer uses your bond originator. This will ensure a qualified person who can knock on the doors of many banks.

I wish you have the best day ever today.

Johan Horak.
P.S. When you need a professional real estate agent in Simon’s Town who will be your gatekeeper, your marketer then contact me today. 021 786 4028 or 082 870 2004.
P.P.S. Why should you? Because I will rather turn you down today than let you down tomorrow.
P.P.P.S. If you need advice call me today at 082 870 2004 or 021 786 4028.

Tags: Legal, Real Estate Agent, Trend