Net-savvy buyers dominate house market
The internet is increasingly dominating the South African real estate marketplace, says John Graham chief executive of HouseCheck. A new generation of internet-enabled buyers are searching the web for suitable properties and they are also using the internet as a tool to do due diligence on the houses they are interested in buying.
Graham says that South African house sales are now driven by younger, well-educated buyers who combine good earning power with business savvy. Mortgage bond originator Ooba reports that in three years, the percentage of first time home buyers rose from 44 percent in April 2010 to 52 percent in April 2013.
Graham says that the average age of these first time buyers is only 33. “These are people who grew up with email, who tweet, message and Facebook constantly and who use the internet and Google as their main source of information.
Proper due diligence is becoming increasingly important for these well-informed first time home buyers, says Graham.
Younger buyers use the internet to:
- Search property portals like Property24, Private Property and IOL Property to check out all properties in the areas they are interested in.
- Compare the seller’s asking price with actual prices achieved in the neighbourhood. To get this information buyers use on-line tools provided by people like Property24 and Lightstone.
- Obtain a detailed evaluation of the true condition of the property – including estimates of the costs of repair. Professional inspection companies, like HouseCheck are now fast moving to centre stage in the average property transaction. This is in line with trends overseas – in the US 80 per cent of houses are inspected each time they are sold.
- Calculate bond affordability using on-line tools provided by companies like Ooba.
Graham says that it is increasingly becoming a “no-brainer” for cautious home buyers to make their offer to purchase contingent both on a bond being granted and on a satisfactory home inspection report.
“Young buyers understand that it really is a good investment for the buyer to spend an extra R3 000 on a fee for a home inspection in order to be sure that a R3-million “dream” house is not a potential ‘money-pit’.
“Most of HouseCheck’s clients find us on the internet. In fact the business process of quoting, collection of fees and delivery of the report is all internet based at HouseCheck.” Graham says HouseCheck uses internet technology in order to hold its fees at reasonable levels.
Graham adds that because of its smart technology, HouseCheck is also able to deliver detailed home inspection reports of a consistent high standard to its clients within one working day of the inspection. “It is interesting that mostly we never meet our clients face-to-face and yet we receive regular praise for our very high level of efficiency and personalised friendly service.”
Graham says that the internet is the real estate marketplace of the future. This is where today’s buyers are most comfortable. He says that estate agencies, conveyancers, bond originators and home inspection services which fail to gear up and use internet-based technologies to the benefit of their customers are doomed to obsolescence.