Thursday, 10 March 2016

Voetstoots & CPA

Posted on  01 March 2016

Before the Consumer Protection Act (CPA) the common law provided that a person who sold his goods (including a property), were selling it with an implied warranty that there are no latent defects in the goods. A person who sold his goods would therefore be liable if it appears that there was a latent defect in a property.

Example: I sell my car to Piet and shortly after the sale the engine seizes. I would be liable in terms of the common law to repair the damage.

A latent defect is a defect that cannot be seen.

Example: A crack in a pipe that is inside a wall.

A patent defect is defect that can be seen or can be seen be exercising reasonable care.
Example: A crack in a wall or a crack in a wall behind a portrait.

Due to the fact that the latent defect cannot be seen and often a Seller is also not aware of the latent defect, as in our example in 1 above it became common practice to sell goods that are not new, voetstoots. Voetstoots means "as is" and in the event of a voetstoots clause in a contract the Seller is no longer liable for the latent defects in a property.

If a contract contained a voetstoots clause the Seller could only be liable if he knew of the defect and fraudulently hid it.

An agent must take instructions carefully from a seller before marketing a seller's property and also do his own inspection carefully. It often happens that a seller alleges that he did tell the agent of a defect. If the agent's paperwork is in order, this should solve the problem.

In terms of CPA the Seller of goods gives an implied warranty in respect of the quality of the goods in that:
the goods are reasonably suitable for which they are generally intended;
are of good quality, in good working order and free of any defects (latent or patent);
will be useable and durable for a reasonable period of time

The effect of the above implied warranty is that a Supplier can no longer sell his goods Voetstoots.

CPA would only apply if the Seller is a Supplier in terms of the Act and he would only be a Supplier if he is selling the property in the ordinary course of his business. The average home owner is not a Supplier and therefore the average property transaction does not fall under CPA.

It is therefore totally legal to include a voetstoots clause in those transactions that does not fall under CPA.

The most obvious exceptions are developers and people who speculate with properties, who are selling property in the ordinary course of their business, who are therefore Suppliers and have to comply with CPA and cannot include a Voetstoots clause in their contract.

There is a duty on a purchaser of a property to inspect what he is buying and exercise the inspection with reasonable care. (Caveat Emptor – be careful purchaser)

Often defects that appear after the signature of a deed of sale are patent defects, which the purchaser could have seen if he exercised reasonable care when he inspected the property that he is buying, like looking behind the portraits to see if there are any cracks and opening and closing doors to make sure that they close properly.

There is no duty on the seller or his agent to indicate to a purchaser such patent defects, but it is always better to be transparent as it will prevent unnecessary disputes.

Millers Attorneys

Thursday, 18 February 2016

Do home sales go better with an agent?

Should you sell your home yourself, or use an estate agent? Some tips to help you decide.
Many homeowners believe they can sell their own property, with this belief being especially prevalent in times when the property market is performing either very well or very poorly. In a strong seller's market, for example, the reason is that sellers know that buyers will beat a path to their door as soon as they know their property is for sale, easily achieving the sale themselves and keeping the commission they would have ordinarily had to pay an agent. On the other hand, when a market experiences a steep downturn, homeowners may be inclined to try private selling in the belief that their property will automatically be more attractive to buyers if they eliminate an agent’s commission and drop their asking price.
The reality: You need an agent on your side
But the fact is that although you can eliminate an agent, someone still has to do everything an agent would have had to do to safely negotiate a successful property transaction. Even in this high-tech age, successful sales still depend, to a large extent, on certain factors such as:
  • Determining a market-related price
  • Qualifying prospective buyers
  • Creating and paying for advertising
  • Organising show days or viewing appointments
  • Drawing up a valid sale agreement
  • Helping buyers to obtain finance
  • Co-ordinating all the transfer processes.
Most homeowners simply don’t have the time or knowledge to handle all the work required, which is exactly why private sellers still only account for a tiny percentage of successful home sales - in any market. It is also why professional agents are often called in to help after homeowners have experienced a couple of months of trying to sell their properties on their own, with no luck.
No gain, no pain
Those tempted to try their hand at private selling should also bear in mind that the estate agency industry remains just about the only one operating on the “no gain, no pain” principle, in that the client only pays for all the above services if they result in a successful outcome.
Estate agents wield power
Another thing to remember is that it is estate agencies that literally “make” the residential marketplace, with active networking and canvassing, as well as large volumes of advertising that create interest and buyer demand on a scale not possible for private sellers to achieve.
More security with an agent’s assistance
Finally, those contemplating a private sale should know that they have a far greater security risk than those working with an agent. This is because they are generally anxious about putting potential buyers off if they make too many rules about viewing times or ask too many questions about financial capability.
Working with an agent will protect you, in many ways, from hassles such as having people claiming to be prospective buyers just “drop in” to view the property at strange times, or from show day burglars and bogus buyers whose only real objective is to gain occupation of your home. At the end of the day, having an experienced and knowledgeable agent by your side when selling your home is likely to have the best possible outcome for all involved.

Considerations When Selling a Home

Factors to consider when selling a home
As a homeowner, buying your home was probably one of the biggest investments you ever made. So when it comes to selling your home, you need to make sure the process runs smoothly to reap the benefits of that investment.

Most homeowners hope that they can sell their homes quickly and make a decent profit, especially if they have owned the property for long enough for it to have appreciated in value.
There are many reasons for selling a home including upsizing, downscaling, making a profit, job transfers or retirement. However, each of these has the same goal: to sell your home within a reasonable amount of time while ideally making a financial profit.
Once you have decided that you are ready to sell, you need to take a number of factors into consideration to make sure the process is efficient and beneficial for you. 
Right Price

If your house is priced correctly, within the first few weeks of being on show you are more likely to attract a serious Buyer and to sell your property within a reasonable amount of time.
A key factor when selling a house is its price tag. Every Seller should know what their property is worth and researching values of comparable properties can be a useful benchmark. Buyers can easily find out what other homes in their suburb, street or complex have sold for by checking Property24's home values. As the Seller, doing similar research will be a useful guideline to help you establish a fair market-related price: one which is not too high or too low.
Most homeowners hope that they can sell their homes quickly and make a decent profit, especially if they have owned the property for long enough for it to have appreciated in value.
It would be ideal to be able to sell when market conditions are just right and you are able to get a good financial return, but for most Sellers it is not possible to hang on for the market to improve. Also, it's worth keeping in mind that the market you are selling in is also the market you are buying in, which is a factor people often forget.
A Seller will be more likely to sell a home with greater ease when the property is in a sought after location regardless of timing, but if this is not the case, the Seller should consider a sale during a preferred season. 
It may be easier to sell a property during the warmer months, when your home and garden look most attractive and those shopping for a home are more likely to venture out to attend show days.
Based on current statistics, this is when homes listed online receive the most amount of interest from the buying public.
However, throughout the year there are always Buyers, so if you have to list your home during autumn or winter, there are other ways you can create interest. Having a fire going in the fireplace adds to the warmth and ambiance on show days, while additionally displaying warm and inviting images as part of your online property listing can catch a potential Buyer’s attention.
When selling, you want to take into consideration three essential market factors:

1.      The current property market - is it a Buyers market or a Sellers market?
2.      How homes for sale are doing in your area - for how long, on average, do they remain on the market?
3.      The interest rate - are the interest rates currently low or high?

When the interest rate (the percentage charged for the use of money in the form of a home loan) is high, it can negatively affect the Seller after a sale, upon the purchase of a new home. If interest rates are lower, it could be a great time to trade up to a more expensive home without enduring a significant increase in your monthly financial obligations. However, the interest rate can fluctuate, and as such one should never purchase a home without looking at the affordability of Bank repayments should the interest rate rise.

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Wednesday, 17 February 2016

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Sales Agent
076 826 5699
(086) 199-7997