Making it safer to buy or sell your home in the COVID era using online pre-qualification & virtual viewing

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“I wish buyer No 36 came to view the house first, then I would not have wasted my time showing the 35 other buyers the property”,  was a comment overheard from an estate agent over the weekend.

The property seller shared the same comment.

After each visit the property had to be sanitized all over again.

Introducing 35 unsuccessful buyers through the doors of a seller is a big concern during the Covid era, says Meyer de Waal, who spearheaded the development of an online application for buyers to make sure that they are ready to qualify for the purchase price of the property that they are keen to buy.

We realized that sellers and estate agents are now even more keen to only work with buyers who have demonstrated that they have the affordability to qualify for a home loan, and those buyers who have properly identified themselves.

Gone are the days when people who were bored on a weekend decided to visit one showhouse after the other, just to pass the time.

Sellers and estate agents want to limit the number and volumes of viewers and ensure that only serious buyers visit a property for sale “ says de Waal.

YOUR OWN BUYER’S PROFILE – IT TAKES LESS THAN 10 MINUTES

Once registered, it takes less than 10 minutes to sign up and create your own buyer’s profile, and receive an accurate certificate of the home loan that you may qualify for.

We also realized with the introduction of POPI that estate agents will require full information of a property buyer before they engage with the buyer.

This platform can be used pre- and during Covid lockdown times as the entire process is online and automated.

We added all to the buyer’s online profile as well”, says de Waal.

ARTIFICIAL INTELLIGENCE

Through artificial intelligence, facial identification and recognition plays a vital role in the process.

Sellers and estate agents are able to identify a pre-qualified buyer through uploaded facial images that are validated as the true image of the buyer.

This is supported by a pre-qualification estimate of the home loan the buyer may qualify for.

Buyers are also able to upload onto the online platform, their identity documents and FICA supporting documents, making the collection of important documents easier for estate agents.

A buyer can also indicate the type of property required to purchase, such the pre-identification of the type of property, how many bedrooms, bathrooms and many more, thus assisting the estate agent with their work load and matching the right property with the right buyer.

PRE-QUALIFCATION HOME LOAN INDICATION

A buyer is issued with a home loan pre-qualification estimate which is a very accurate indication of the home loan the buyer may qualify for.

This pre-qualification indication is underwritten by a one of the leading mortgage originating companies, thus adding extra value and extra assurance to the property finance the buyer may qualify for.

Estate agents and sellers are thus able to take only pre-identified and pre-financially qualified buyers to go and view properties.

This will minimize the flow of aspiring buyers through the properties of sellers.

BRINGING THE HOME TO THE BUYER

3D virtual tours have allowed prospective home buyers and sellers the advantage of safe virtual viewings of properties.

A lot of these prospective home buyers could not physically go out and view a property during lockdown and saw the advantage of virtual viewing made easy with 3D immersive technology.

I believe 3D immersive technology will still form part of real estate marketing long after the pandemic is over

Other features we’ve seen take off is the virtual staging of empty properties,

says Wimpie Ferreira of Nichecom, whose company provides virtual reality tours to the property industry.

VIRTUAL STAGING

Agents use virtual staging to create realistic photos of empty rooms in a home, while showcasing individual spaces at their highest potential, providing buyers a real feel of what a space could look like. Click here for an example of a such a virtual staging.

GRAB THE ATTENTION OF A BUYER

The average time someone spends on a portal listing is a few seconds.

That’s how fast people swipe past properties that don’t grab their attention.

At that first stage it has nothing to do with nicely worded descriptions and everything to do with good photography. Images must inspire someone to move their lives and families into making your property their home, says Ferreira.

PERSONAL RELATIONSHIPS

Buying or selling a home is simply too large a complex transaction to be handled solely online, however.

It requires specific knowledge and skills in various fields including finance and law; local knowledge; municipal guidelines; building codes; marketing; sales and negotiation.

You will still need an expert to guide you through the process and to coordinate all the necessary tasks.

It is furthermore an emotional process with huge long term consequences.

The future of real estate finance lies in creating less friction in the buying processes and combine the technology with the personal touch and relationship of the estate agent have with the seller and buyer.

Online processes such as above-mentioned can reduce the friction for a buyer, seller and agent in the home buying and selling process.

MANY OFFERS LINED UP

It is not unheard of that buyers often receive the recommendation from an estate agent that there are already 4 or 5 offers submitted for a particular property, but still the buyer is invited to view the property and then to submit another offer.

Often this practice is followed by estate agents as they know the first 3-4 offers will not materialize, due to the fact that the first, second or even third offers will fail to qualify for property finance.

Yet, all the aspiring buyers are taken to the property to view as few buyers are willing to submit an offer without an actual visit to view the property.

FLISP VOUCHER FOR FIRST TIME BUYERS

Many first time buyers are not made aware of the opportunity that they can apply for a Government subsidy as a first time buyer.

DEPOSIT IN HAND

A first time buyer who qualifies for a Flisp subsidy is automatically issued with a Flisp voucher to indicate the Flisp subsidy he or she can qualify for, once the online home loan prequalification process is completed.

This is similar to having a deposit in hand when you make an offer to buyer and sellers and estate agents favour such a buyer” says De Waal.

The buyer then has a much better chance to jump first into the queue to submit an offer to purchase, as such offer is supported with a home loan pre-qualification estimate as well as a Flisp subsidy amount voucher that can be used as a deposit, or added to increase the purchase price combined with the approved home loan.

This means that the estate agent and the property owner does not have to sell a property 4-5 times before a successful buyer is found who can qualify for the required property finance.

WHAT IS A FLISP SUBSIDY?

The Government is making available free money to first-time buyers who want to secure their own homes.

ALMOST R600 MILLION RAND AVAILABLE

In a recent media release Mr Mbulelo Tshangana, the Director General of the Department of Human Settlements, Mr Tshangana stated that the Government has budgeted almost R600 million to aid first-time buyers to gain access to owning their own homes.

The aim is to provide assistance to some 20 000 beneficiaries under the FLISP subsidy programme.

IS THIS SUBSIDY AVAILABLE TO EVERYONE?

The Finance Linked Individual Subsidy Programme (FLISP) is available to all first-time home buyers who earn a gross income between R 3 501.00  and R 22 000.00 per month.

To qualify, a buyer must further be a South African citizen with a financial dependent, and must have obtained an approved home loan.

The subsidy is also only available if you have not yet taken transfer of your new property, unless you live in the Western Cape or Kwa-Zulu Natal in which instance you can submit a claim within a certain time frame as an existing home owner.

The subsidy is linked to the gross combined household income and works on a sliding scale according to the income of the buyer. The maximum subsidy amount is R 121 626.00, and the minimum subsidy amount is R27 960.00.

STAKEHOLDERS IN THE PROPERTY INDUSTRY STAND TOGETHER TO AID FIRST TIME BUYERS

We realized that in the 2019/2020 financial year, the National Housing Finance Corporation who processes the majority of FLISP applications only received 2 815 flisp applications, and approved some 2 120 applications to a value of R111 million.

This was confirmed in a recent media statement released by Minister of Human  Settlements Water and Sanitation,  Lindiwe Sisulu

NEVER HEARD OF A FLISP SUBSIDY

Our FLISP support service receives daily calls from existing new home owners who are upset that they were not informed that they had access to the FLISP subsidy funds before they took transfer of their properties on the their names.

Once they have taken transfer, they cannot submit a retrospective FLISP subsidy application.

Conveyancing attorneys are the last stakeholder to engage with a new home buyer before the transfer is registered in their name.

We realized that the wide distribution network of LexisNexis, who provides conveyancing software to thousands of conveyancing attorneys, will be the ideal partner to work with.

“The number of applications received is far off the target of 20 000 beneficiaries to be assisted.

That is why we teamed up with LexisNexis, as we need more attorneys to assist their own clients with FLISP applications”, says Waal.

IS THIS MONEY AVAILABLE TO EVERYONE?

Yes it is, but there is a proviso that may prevent a first time buyer to apply for the subsidy.

The proviso is that as the subsidy is “finance linked”, it means that the first time buyer must first qualify for a financial loan.

At this moment only home loans from the traditional financial institutions such as ABSA, FNB, Standard Bank, Nedbank and SA Home Loans qualifies to be linked to a FLISP subsidy.

One would think that with the current low interest rates, first-time buyers would qualify easily for a home loan, says Anele Matakane, who assists home buyers with their FLISP applications as well as home loan applications.

The impact of a credit score often prevents many buyers from raising a home loan.

A credit score can either be “low” or “bad”, “average”, or “good”, up to “excellent”.

Many buyers do not have a credit profile at all, as they want to avoid a debt trap and pay cash for all their expenses.

The impact of Covid-19 worsened the credit profiles of many consumers in South Africa, and many first-time buyers were left without income for a few months at first. This resulted in many credit accounts not be paid up-to-date, with the result that many consumers are faced with credit profiles that indicate late or non-payments towards their accounts.

According to statistics received from the National Credit Regulator, the payment history of consumers deteriorated towards the end of 2020 and in 2021, many consumers are still struggling to improve their credit profiles.

IMPROVE YOUR CREDIT SCORE

A comprehensive service is also available once a Buyer’s Profile is created to assist a buyer with a low of a bad credit score.

Once the credit score is improved, the buyer can continue the journey again to get pre-qualified for a home loan and then start searching for a property to buy.

CREATE YOUR OWN HOME BUYER PROFILE & RECEIVE A FREE BOND INDICATOR CERTIFICATE

Watch the video – How to create your own buyer’s profile.

Sign up here and check if you can qualify for a home and create your own buyer’s profile.

Website : https://www.mybondfitness.co.za/

Meyer de Waal

29 June 2021

meyer@mybondfitness.co.za

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE) 

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