Thursday, 26 August 2010

STRIKE or NO STRIKE - what does it do to the Mortgage Market

Deeds office closed till further notice....eeeeeeish something the seller who needs his money, or the attorney who needs to transfer the home loan deal or the agent who needs commission or the mortgage originator who needs commission or the bank who want their fees or the buyer who needs a house to live in without paying occupational rent DOES NOT WANT TO HEAR!

Amazing, the very same people who strike for a better wage are not being paid by their bosses the government, but actually by you and I, their real bosses the tax payers.  The government just has an inability to negotiate with their employees as it is easier to spend the allocated budgets on absolute essentials such as top end Mercedes Benz and lease new police headquarters at prices that are more suited to 2025, never mind 2010.  But that's not the only issue.

The choice for civil servants to strike or not - is the true question and like all such situations the impact has an enormous effect on the property industry as whole.  Mortgage transfers aside, bankers, estate agents, financial folk are being impacted by their children being unable to go to school forcing work absenteeism as a starter. Insurance companies are having to brace themselves for high impact claims which overshadow the role they play in property insurance, development registrations, trustee and custodian assignments are being delayed and so these subtle impacts just role on and on....

then comes the prophet of doom talk of the police and the army going on strike and on and on

I gnome not what to say anymore......keep the financial faith the banks are lending fine right now......keep it up guys

Thursday, 19 August 2010

A bank versus an Agent versus commissions versus Sales SCARY

If you think the South African property market you’re working in is tough, spare a thought for the hard working estate agents on Spain’s Costa Del Sol.  eeeish!!!

Without doubt there are less agents in the market and those who have survived the onslaught are OK up there...but.....Agents selling overseas property in Spain have no such luxury. No Buyers and the competition for business has actually increased, forcing even some of the best run agencies to close their doors.  Seen that here in SA as well.

Now we know that the relationship between Banks and Agencies has always been kind off solid and a happy partnership -  SO WHATS THE SCOOP

Imagine this : You work hard “closing” a deal. Your buyer agrees and approaches the bank for a home loan. However the bank deliberately offers tough terms (40%+ deposits) but offers your client 100% finance on another similar property and is also prepared to discount heavily to get the property it owns off its books.- Sounds like a PIP scenario.  lets keep our eyes open.

This is exactly what’s happening in Spain and it is not only putting agents out of business, it’s disrupting the whole middle market as agents who want to make a living only have two choices:

1. Target cash buyers who are in a minority but at least can be closed

2. Sell high-end properties where the competition from banks is less (the majority of bank stock is low to
mid end apartments in sub prime locations)

The result of this situation is that there are far fewer agents than there should be, given the level of demand, selling mid-market property.

An overseas buyer looking in Spain does not just face mis-information from unrealistic property valuations, the people that can really help them and know the market have little incentive to do so.

It is a tragedy for the buyer and for the industry as a whole.

So Are they really - Tight-fisted bankers?

The obvious solution is of course for an agent is to work with the banks but the banks seem unwilling to allow agents to make even a meager living from the process.

Desperate and reactive

Although the situation is clearly terrible, it would be wrong to accuse the banks of cutting agents out through a cynical and well-thought out sales and marketing strategy.

According to what we have heard, banking staff have been told to get properties off their books and in many cases seem willing to accept almost any price.
The banking industry needs to act to prevent this from happening here in South Africa, and judging from what we see and hear they are remaining one step ahead of their European counterparts and working closely with Agents, online sales forces and mortgage brokers...well done Standard bank, ABSA, Nedbank and FNB - LeadSA.

The Spanish economy depends disproportionately on construction. The property sector and wider economy will not recover until the real estate market fully corrects and that correction could be dramatic (if banks start dumping properties onto the market because of a rise in reservation ratios for example) or it could be slower and less painful. A slower correction is better for everyone and for this to happen, banks and agents must work together. Banks cannot sell properties alone, they don’t have the time or expertise; and their unilateral reactive approach is not in their interests, or the interest of the wider economy.

LEAD SA - A Proud South African Initiative

Monday, 16 August 2010

Should I buy, fix, sell and get RICH!!!!!!

Yesterday, I bought a PIP (Yup! a property in possession). 
Thank heavens some other sucker could not afford to pay his homeloan.
I scored, I really, really scored as I could raise some money
from my other homeloan for this house. Oh, what a bargain!

Now, I am going to do quick, fixit, with my gardner and a couple of guys off the street who walk around carrying paintbrushes and ladders with card board adverts.  They are really so cheap and desperate for work that a few more bucks will sort that out.

Then i'll sell it on Private property so that i do not need an agent and I'll save myself a fortune.

Speculation, the mothers of invention. (Sic)

So whats the reality in property!!! Or does reality exist in properties in possession!

Owning property is no doubt great.  Owing the bank money for the property is not so hot, but the truth is not all of us have hard earned cash!!

Second mortgages, even third and fourth ones to cover that little speculative property, can be great when things are good and you have rental income, but not so great when the burning hole in your pocket hurts like crazy.

A quick fixit, can also be a quick drain on cash, especially with no recourse and no guarantees.  so be careful.

Choosing the right place and area.  That is tough to answer.  Position, position, position means cost, cost, cost - You pay big time, for the big view.  So keep these thoughts close and keep your head at all times.

The key thoughts are, are there people with money.  Parents with student kinders.  Older folks needing places without stairs.???

Real estate agents actively active in the area.  Do properties move in the area.  Do the banks finance in the area.  That information is always available for you. get a great real estate agent or mortgage originator to assist you.  they will, they want your business.

Oh, yes, please do not forget, selling means you need buyers.
Selling means you need a nice place for someone who wants it with things that work.

so, let us hope that your painter with the ladder is not the owner of the PIP!!!!  mmmmmmmmmmm

be cool, be cool!!! Its still a good deal, just make sure you prepare yourself well -- ask the debt doctor he can tell you everything

Monday, 2 August 2010

CIPRO - Keep your CC or Company Alive!!!!!


TransUnion would urgently like to alert our clients to the latest deregistration of business entities in South Africa by the Company and Intellectual Properties Registration Office (CIPRO). The deregistrations are due to a failure to lodge annual returns. Our clients would have received business alerts from our monitoring service informing them of business status changes on many of their debtors as a result of CIPRO providing us with a file that contained over 750 000 deregistered entities.

CIPRO uses annual returns to confirm whether a company or close corporation is still doing business, as well as to update their records with the latest information. Businesses must lodge their annual returns within their anniversary month of their incorporation up until the end of the month thereafter. Failure to submit within this specified two-month period will result in incurring a penalty fee of R150. Omitting to lodge an annual return within six months from the anniversary date of your company will result in the entity being deregistered on the CIPRO database.

A business entity will still have the opportunity to lodge its annual returns electronically via the CIPRO website while in deregistration, this will automatically change the business status back into “In business”. However if the entity has been placed into final deregistration a different process must be adhered to. We have provided this process below for your information.


If the deregistration process has been completed (finally deregistered) due to the failure of a business to lodge and pay annual returns, a written application may be made to the registrar who may restore the entity. An application for restoration for a close corporation must be made by the lodgement of a duly completed CK3 form which carries a statutory fee of R150. It is imperative that businesses pay this fee into their CIPRO bank account prior to lodging the CK3 or the application will be denied. Applications can be e-mailed to , and a response on your application should be received between 1 – 3 days.

The CK3 must indicate to the Registrar

• Reason as to why it must be restored

• Intention to lodge all outstanding annual returns and other statutory returns in order to update the information of the entity once restored.

• Letter from the National Treasury and Public Works indicating that they do not object to the restoration of the entity (if immovable property involved)

• Proof of payment of the prescribed restoration fee of R150


For the restoration of a company who has been deregistered due to failure to lodge and pay annual, a written application on a letterhead may be made to the Registrar who may restore the entity.

This application letter must indicate:

• Why annual returns were not lodged

• Reason as to why it must be restored

• Intention to lodge all outstanding annual returns and other statutory returns in order to update the information of the entity once restored.

• Letter from the National Treasury and Public Works indicating that they do not object to the restoration of the entity (if immovable property involved)

• Proof of payment of the prescribed restoration fee of R150

If the business entities application is successful the business status will be amended to reflect Deregistration in Process. It is in this status that a business must then submit the annual returns in order to become compliant.

so do not be shnoop - pay your bucks and protect your assets.