South African homeowners are up to their necks in debt. According to the latest South African Reserve Bank figures the average South African is borrowing the equivalent of 78% of their monthly disposable income and spending 9.3 cents of every rand they earn each month to service their debt. And this is when interest rates are near record lows with the prime rate at 9.25% p.a.Those homeowners who were around in 1998 will remember the prime rate reaching 25.5% p.a.
The Reserve Bank is already warning that interest rates are likely to rise and speculation is rife among Economists that this could happen by mid-year.
Throwing a lifeline to financially strapped and other homeowners is a new South African company with an innovative solution. This recently launched Estate Agency, HomeBid, uses qualified professionals such as Registered Professional Valuers and Attorneys culminating in a bidding process – and only charges 1.95% commission.
HomeBid introduces an unbiased and independent professional Valuer to the seller upfront to undertake a valuation report of their home, including a current market valuation. Using Internet marketing and other modern marketing methods HomeBid ensures the home is viewed potentially by over 2.5 million home buyers a month.
Another new feature is that all potential buyers of a home are financially pre-qualified by the HomeBid financial team prior to making a bid for a home listed on HomeBid.co.za. For the first time in the industry these financially pre-qualified buyers have access to an unbiased and independent valuation report of the home prior to making their bid. This transparency and integrity between buyer and seller is a hallmark of this world- first solution.
The bidding process is confidential and is handled by attorneys appointed by HomeBid for the seller. The successful bidder and the seller meet in the attorney’s offices to finalise the sale agreement whereafter the attorney transfers the property to the buyer.
The HomeBid process differs substantially from the traditional estate agency model and at 1.95% commission can potentially save buyers and sellers R65 000 for every million of the value of the home. This contrasts with the 5-7.5% plus Vat traditional commission charged by estate agents.
Property Industry veteran, Neville Berkowitz (62), a pioneer of property economics in South Africa, institutional adviser and residential developer, acting as an advisor to HomeBid, says after being involved in the property industry for over 40 years, HomeBid’s innovations in the residential market are the most exciting and revolutionary he has seen.