REAL ESTATE, COVID-19 AND LOCKDOWN - FREQUENTLY ASKED QUESTIONS
Category Just Imagine Properties Team
REAL ESTATE, COVID-19 AND LOCKDOWN - FREQUENTLY ASKED QUESTIONS
"Risk comes from not knowing what you are doing."
(Realt Estate Investor Warren Buffet)
The Covid-19 Virus, commonly known as the Corona Virus not only created a medical challenge in South Africa, but it also brought with a lot of uncertainty and stress related to the unknown.
Uncertainty in the real estate is rive and a reality. These unprecedented times can cause fear and panic.
In this brief article we will be answering the most commonly asked questions pertaining to real estate and the Covid-19 Virus, and in so doing contribute to your knowledge and thus limiting uncertainty.
Your first question might be: Would it be a good time to buy property? This is the ideal time for aspirant buyers to start or continue looking for property because of the 2.25% drop in the interest from the Prime Rate of 10% to 7.25% rate since November 2019. The interest rate cut means buying a home is more affordable and more attainable, especially for first-time buyers and current tenants. Buying a property of R 1,000 000 now compared to buying a property for the same price in November 2019 has a saving of R 1 441 on your monthly instalment! This and the fact that the repo rate is at an all time low rate makes property ownership attractive to even the most conservative renting a property.
Your next question might be:
May I view properties in level 4 of the lockdown process?
Estate agents are not included in the list of essential work or permitted services. "Normal" viewing as we know it is therefore not permitted. However, viewing of property via social media is encouraged. Video calls to take a closer look at the property could be arranged.
If the outcome is positive and you do love the property, could you then make an offer on the property?
You can definitely make an electronic offer on a property during this period. You will be protected by adding a suspensive condition in the Offer to Purchase, which will stipulate that the transfer will only go ahead once the home has passed a physical inspection, which will be conducted once the shutdown is lifted. It is also recommended that you include extended time periods into OTP's for bond approval.
You most certainly can apply for a home loan in this period. Just Imagine Properties make use of only the very best bank consultants at every bank and they are geared to assist with every application.
If your offer is subject to the sale of your property, and there are transfers pending, it is important that you keep the property well-maintained and in the same condition as at date of sale (applies at all times, not just lockdown) but access to garden services, pool services etc, is limited. If something happens to property which can only be attended to after lockdown, you must disclose this and ensure it is attended to promptly.
The Deeds Office might open soon, however, they will have to catch up on the backlog created by lockdown. Sellers, Buyers and Estate Agents need to consider the effect of this on the timelines of the Sales Process.
If you bought a house and the property registered before lockdown or registers in the current lock down period (level 4) - may you be able to move?
Yes you may be able to move until 7th June 2020 if you obtain a permit from your local SAPS Station. This permit with a copy of your registration letter permits you to move.
Turning the focus to current home owners - You might be worried about not being able to pay your bond instalments over the next few months as you might face the prospect of reduced earnings during the lockdown being put in place to combat the Covid19 epidemic, and possibly even after that as the economy will take time to recover from the disruption.
However, you shouldn't panic as many new economic relief measures that will help you keep your home are already being put in place by the public and the private sectors. Many banks have announced "payment breaks" on all sorts of loans, including home loans.
For any other questions on the current real estate market please call your Just Imagine Area Specialist.
Author: Just Imagine Properties Head Office
