Looking at our stats from approved transactions this year so far i have to thank two companies for their commitment and great service in assisting our buyers and sellers. Attorney Firm Trutter Crous & Wiggill and Bond Originator Payneless Bonds ….. thank you for your help to date!
Planning and strategizing for the future is no good unless you know what you have achieved thus far. In an industry as volatile as ours where there are so many external factors that can influence the success of the agent and agency we have to be well aware of the pitfalls and try to avoid them as far as possible. One of the ways we try to do this is by looking at certain statistics from transactions that have been successfully registered to date.
The more of these deals there are the better but let’s just say we have enough 2012 data to see some interesting stats coming through.
“The Banks” are very unpopular when it comes to granting home loans and for most buyers this is where it all goes wrong. Not too harp on the subject but the banks are tough, very tough, but for those applicants who have their financial affairs in order it does seem as if the banks are getting a bit more lenient ……… all be it minutely so!
Looking at the clients that have successfully bought properties from or through RealPro this year it is interesting to notice that a very small percentage have been successful with Nedbank and that almost 22% of the transactions were 100% CASH deals with no bond application needed. FNB got almost 15% of the pie and ABSA got just over 22% of the business. Standard Bank is leading the race at this stage with just over 33% of the allocated bonds …… obviously looking to grow their bond book.
Buyers always have a choice of where they want to place their bonds but the repayment rate plays a big part with prime + rates being the norm at the moment. Just as a matter of interest, the average sales price of the properties making up the above data comes to R 845 000 which is also in line with the national average.
Many buyers still apply for 100% bonds in the hope that they don’t need to pay a deposit. In our case, 48% of our applicants applied for 100% bonds and 61 % of those got approved. The average purchase price where 100% bonds were achieved was R 857 000. Average price for all the CASH transactions was R 570 000. Even though it seems as if some of the Banks may have loosened their Credit Criteria slightly, buyers should still plan and prepare for a 5% to 15% deposit to secure a home loan, especially when buying in the higher price brackets of R 1 000 000 +.
Having a good Bond Originator on your side to aid your buyers also helps as they understand the application processes better and can motivate certain issues to the bank which might be overlooked. With the Bond Repayment Rate dropping by 50 basis points from 9% to 8.5% on Thursday 18 July 2012 many prospective buyers might now be in a better position to afford that perfect new home.
Credit profile still plays a huge role for applicants and we don’t see that changing soon so make sure your credit profile is clean and all accounts are up to date and paid on time.
Happy Buying and Selling ……