Not the right way to stretch your dollars...

We all like to save some cash when the opportunity arises, but I am sure you will all agree that sometimes saving money in the short term leads to bigger bills later down the line.

The reason I bring this up is that into today’s economic climate where cash is so tight and transfer fees and capital gains tax on property transactions can be the deal breaker, more and more clients are tempted to take a short cut.

There are certain agents who will offer their clients the option of lowering the Purchase Price on an agreement of sale in order to lower the cost of Capital Gains Tax payable by the seller and Transfer Fees payable by the purchaser. The rest of the Purchase Price is paid “under the table” and the Seller, Purchaser and Estate Agent all benefit by avoiding the full cost of taxes. Sounds like a win-win situation, if you don’t consider the moral implications of tax evasion!!!!

However, the down side, (Yes- you knew it was coming!) is that the Purchaser is not advised properly by the agent. If you lower the Purchase Price on the agreement of sale when you buy the property, it means when you come to sell it in a few years’ time at the correct market value, your “Capital Gain” will be much higher, and you will have to pay 20% of this gain. Your saving at 7% of the lower purchase price maybe a few thousand dollars, but your tax bill when you sell the property could be tens of thousands.

The only person who really gains by lowering the Purchase Price in the long run is the seller, and he will be long gone by the time you sell your house and pay his tax bill for him. Remember that all properties bought pre 2009 only pay 5% tax on the FULL Purchase Price. Post February 2009, all sale of property incurs a 20% tax on the capital gain of the property.

Say NO! to lowering the Purchase Price – it will save you money in the years to come and you won’t have the guilt of tax evasion on your conscience.

On that note, I would like to wish all our valued clients, friends and supporters a peaceful, safe Christmas period and a prosperous, dream fulfilled 2013!

Love from all of us at

Page Properties…

Chasing Rainbows

So, you have finally decided that now is the time to sell your house. Before you put your house on the market, please read this blog about the pitfalls of overpricing your home.

Most people want the best price for their homes. Ok, you’re right, everyone wants the best price for their homes! But research shows that if you overprice your house by just 10% it can sit on the market for as much as 6 months longer than a house that is priced right. Before you jump in there and say, “But, we’re not in a hurry to sell, and when we are, we can reduce the price”. There are more serious issues involved than your house just sitting there.

 

Firstly, estate agents don’t work as hard on overpriced houses as they know that their buyers will not be interested in looking at them, and if they do look and even put in an offer, the offer will be so low as to be insulting to the seller. In most cases, however, buyers do not make offers on overpriced houses.

Secondly, most buyers are educated about the value of property at the time that they are house hunting. In fact, I would go as far as to say, they are the experts on property value. They know what a property worth $300 000 should have, and if your home does not measure up on paper, they won’t even bother looking. You therefore lose the buyers before they have even seen your house.

Thirdly, overpricing helps the competition. What competition? Well, the other homeowners who are trying to sell their houses. If your house is overpriced, the buyers will snap up the cheaper houses thinking they are getting a bargain and you will be left high and dry, with no one to come and view your house, as all the buyers in that price range will have bought cheaper homes.

Another point to remember is, when you eventually do realize that you need to lower your price, the house will have become stale. The buyers will ask themselves what is wrong with the house if it has been on the market for this long and now the price has dropped. You will lose buyers again, as no one wants to buy a white elephant. Stale listings have a negative perception in buyers’ minds, even once the property is on the market for the correct value.

In my experience, I have found that most overpriced houses end up selling for less than the lowest price the seller was initially prepared to accept or even less than the Estate Agent valued it at.

Before you list your property do some research. Buyers are forced to do research in the course of their house hunting. Studies shows that buyers view between 10 and 15 properties in their price range before buying. Sellers should look at other properties on the market too. You should also seek professional help from Estate Agents. It is probably best to get 3 market appraisals.

 But beware the unscrupulous agent who overvalues your house to get the listing.

In the Real Estate Industry this is called “Buying a Listing”. Some agents believe that by giving you a high value for your house you will list it with them. But always keep in mind, the estate agents give you nothing more than a GUEstimate when they value your house. Estate agents don’t determine prices, buyers do, and as already discussed, they know the true value of a property. Just as you want the best price for your house, they want the best house for their buck!

Another point to consider about agents who “buy” listings is that most buyers know who these agents are. They rarely go to them to view houses. So be sure to choose a reputable agent who has a fair understanding of market trends and will give you the best advice.

 

Oh, but wait! What about those mythical buyers you have all heard of, who pay hundreds of thousands of dollars over the asking price or value of the property because they love it so much. Well, they are just that: mythical. You are as likely to see a unicorn in your back garden or find a pot of gold at the end of the rainbow, as you are to find a buyer uneducated enough to pay more than a property is worth.

So remember, more tends to result in less, and less can sometimes result in more. If you place your property on the market at the correct price, you are likely to end up with more money in your pocket, than if you list it at an inflated price.

And for those of you who are still not in a hurry to sell, then either delay putting your property on the market, or put it on the market at a realistic price and only accept offers at that price.

Until next time, be happy, stay safe and please don’t overprice your house!

 

NICKY

Goal setting and investment

Wow! Another week gone already…I have been reading a lot about success and property investment this week, and so I thought I would share some of the insights I have gained. You never know, they might just be the push you need to take control of your financial future.

First things first, if you are going to be successful, you have to set goals. How will you know if you have succeeded without goals? Goals achieved are the benchmark for how successful you are. “A goal is a dream with a deadline,” says Napoleon Hill. If your goal is to own your own home or a profitable property business, then if you don’t set a timeline for this, you are only a dreamer. Life passes dreamers by. The first thing you need to do, is decide on your dream, however frivolous it may seem to you, and then set a deadline to achieve it. This could be relatively short (say 6 months) or long term (10 years.)

This next part applies primarily to those people who would like to invest in property as a business, but the choices you make when buying a family home should also be based on these points.

Ok, so now you know you want to invest in property, ask yourself why you want this. There could be any number of reasons. Being rich, is not a good enough one, by the way, so get creative. It could be security in your old age, a family home for each of your kids, or more philanthropic, like helping the homeless with low cost housing. Knowing why you want something, makes it easier to stick to your goals when the going gets tough, which it will, I promise.

Now, the hard part starts; do some research, in fact do lots and lots of research. Find out which parts of the country or town are going to be most sought after in the near future. These suburbs or areas will have cheaper houses than the current favourites. For example all the areas just outside the “golden triangle” will become more popular as the population grows and when all the professionals in the diaspora return. There are not enough properties in the upmarket areas to service the growing needs of Zimbabweans. Greystone Park, Chisipite, Alex Park, and Mt Pleasant are all areas that have fantastic growth potential.

Find out which areas are good “water” areas, as some properties are priced below value as there is no borehole, but if you were to sink a borehole and get water the value of the property would increase immediately.

 Find out what the market is looking for. Do people want to live in cluster developments or large properties with their own gardens and extras, like a pool and a tennis court? I have found quite a shift recently towards cluster or closed community developments, probably because of the security which these types of property offer. Zimbabwe does not have enough cluster developments to meet demand, and this fuels the ever increasing prices of such developments.

Remember as a property investor it is your job to try and predict the future growth of the property market. We all know that property is a great investment and that in the long term prices will continue to go up. But the rate of this escalation is not so easy to predict, and different areas grow in value faster than others. Research is the only way to make an informed investment decision. Remember property investment should not be made with the heart, but clearly with the head and a little bit of gut instinct. And always buy with the profit already in the investment, in other words if you were to put the same property on the market the next day, without doing anything to it, you need to know that you will be able to sell it for more than you bought it for.

 Of course, the points above are not exhaustive, and I am sure you could all think of many other points to add, but I wanted to get your minds thinking about property investment in Zimbabwe and how to achieve your goals.

OUR NEWS…

Last Thursday we had the pleasure of attending Sabre Business World’s Seminar on the 25 Secrets of Business Success at the Meikles. It was a fantastic day and I think we all left feeling highly motivated and ready to take the Zimbabwean business world by storm.

Thank you to Sally and Brendan Palmer for this inspirational seminar. For more information about Sabre Business World, visit www.sabrebusinessworld.com

And always keep in mind :

“ People often say that motivation doesn’t last. Well neither does bathing…that’s why we recommend it daily.” Zig Ziglar

 Keep yourself motivated and keep improving yourself, and you will achieve everything you have ever dreamed you could have or be!

LATEST LISTINGS

 KWEKWE       $110 000

 

22,6 Hectares of virgin residential land
Ideal for a large scale residential development
(Here’s a chance to invest in property in Zimbabwe!)
All services in place to the boundary of the property, so serving of stands is required.

NOT SO NEW...

ENTERPRISE RD - DRASTICALLY REDUCED TO $290 000

Ideal Office location
4 bedrooms/ offices
Boardroom
Open plan lounge and kitchen
Separate dining room
Borehole
Lots of parking
Good security

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STAY SAFE AND BE INSPIRED!