Friday, August 14, 2009

Cut in Repo Rate

Yesterday, 14 August 2009, the South African Reserve Bank made a surprising announcement regarding the repo rate. The repo rate will be cut by 50 basis points bringing it to 7%. Many economists did not see this cut in the rate coming. They had expected the rate to remain unchanged. Economists had expected this cut to have happened back in June.

On a bond of R500,000, this week's rate cut of 0.5% can give the home owner roughly a monthly saving of about R170. This cut in the repo rate doesn't mean that you should now go out and spend this saving on something else.

The repo rate is also known as the repurchase rate. This is the rate at which the Reserve Bank lends money to other banks.
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Thursday, August 13, 2009

Buying a house: The outside of the house – Part 2

The Woodwork and light fixtures
  • Check door frames. If it’s metal, check for rusting and if it’s wooden, check for rotting. Also check for gaps between the frame and the wall and also the condition of the wall, e.g. cracks.
  • Inspect the window frames on the outside of the house. If has not been looked after, it might just need to be treated. If the frames are badly damaged, it would probably need to be replaced.
  • Check to see how many light fixtures are outside. You many need to add extra fittings. Ensure that the light fixtures that are there are in working condition.
The Garage
  • If the house has a garage, ensure that you can go in and look. If it’s locked, make sure that the estate agent opens it.
  • If the garage is attached to the house and has an inter-leading door into the house, check it thoroughly. The wall between the garage and the house has to adhere to strict building codes.
  • Check the condition of the garage door. Is the door remote controlled and does it work? Is the house alarm connected to the garage?
The garden
  • Large trees close to a house always makes me a bit nervous. Speak to a professional about the type of tree the house has and what potential damage it could do. Some large trees could damage pipes and the foundation of houses. Ever seen a large tree growing on a pavement and it has destroyed that part of the pavement completely?
  • If there is a garden, it will need to be maintained. It might not be the type of garden you like, so think about what enhancements you could do to the garden.
  • If the house has a pool, check that it is in working condition. If has dirty water in it, the pump might not be working. There could be cracks in the pool that would need repairing.
  • Check the landscape of the garden. If it’s been uncared for, you would need to do quite a bit of work to get it all pretty again. Also, check the condition of the paving.
  • What type of outside security does this house offer? Is the front enclosed? Does it have railings or a wooden fence?
  • Check the condition of the wooden fence for rotting and weathering. It may just need to be treated or it might need to be replaced.
  • If it’s a metal fence, then it should be galvanized to prevent rusting.
  • Are the walls high enough (including those between your neighbours)? If there is an open field at the back of your house, you would need to take some additional measures to prevent unauthorized access onto your property.
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Monday, August 10, 2009

Buying a house: The outside of the house – Part 1

When buying a house, one should not only look at the inside of the house but also the outside. Take a walk around the outside and look around and inspect. When you apply for a loan, your bank will sent out their own assessor/building inspector, but it’s always good to do you own inspections.
The Roof
  1. Check the roof. Stand back and see if everything looks fine. Do you see any loose or missing tiles. Is the roof dirty (moss growing) and would it need to be cleaned?
  2. If the roof line is uneven or sagging, it could be a number of things like: rotting of the beams/frame, the roof is settling (if newly built), termite activity, etc.
  3. If the roof is not tiled but has metal sheeting, check for rust.
  4. Check the guttering and down pipes for cracks. If it’s metal, check for rust. If it’s plastic, check if it’s broken and if it needs to be replaced. The older type of homes usually have asbestos guttering which might need some screws replaced to prevent leaking.
  5. Some people don’t clean their gutters and their might have a little “garden” growing which just needs cleaning out.
  6. If the house hasn’t been well cared for, a pit of paint would nicely spruce up the outside of the house.
  7. Check the fascia boards as the ends do tend to get damaged from the weather if not cared for properly. Usually minor damage can be repaired but if it’s in a bad condition (rotten), then it would need to be replaced.
The Paint
If a house has been newly painted and is up for sale, I get suspicious and wonder what the owners are trying to hide. There might of course be nothing wrong at all as most people do tend to make their homes a bit nice looking, hoping to get a better price for the house.

The Wall and Brickwork
Check the walls for cracks. Many homes have minor (hairline) cracks to some extent. If there are big cracks, or even little gaps between walls it is advisable to get a professional opinion.

Some people prefer face-brick houses as it’s considered to be less maintenance than having to paint the house every few years (depending on the quality of paint). Face-brick walls has it’s own form of maintenance as it needs to be oiled every few years or so. If the brickwork was not properly cared for, then it could show signs of erosion and would crumble away due to moisture and salt or chemical attacks. If you see any of these signs, get a professional opinion.

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