The turmoil in the financial markets during the last 3 years has created, and what I believe is necessary, a change in the mindset of all involved in the South African, and I suppose the global, property market.

But that is exactly what it is – just a change in mindset and not a change in systems, procedures or structure. Simply put, the correct systems and methods of valuating, marketing and the selling of property have always been there and they are all adequate enough to ensure smooth and hassle free property transactions both from a seller’s and a buyer’s point of view.

There always was a system in place were lenders could verify value of homes sold and loan affordability levels of purchasers. Credit scores on prospective purchasers have always been available. Verification of income and employment history details has always been accessible to lenders. All this basic information has always been available in order to ensure that purchasers are financially adequately qualified to purchase homes.

So what went wrong? - The problem occurred when financial lending institutions (lenders), in a frenzy to provide high yields and dividends to clients and shareholders from profits, overlooked what should not have been overlooked and did not adequately verify purchaser’s information when considering home loan applications and approvals thereof. This created a massive amount of loans been granted that should never have been granted and ultimately, resulted in high default rates and negative loan to value ratios.

I remember that in the 1980’s and 1990’s, bond applications were thoroughly scrutinised by lenders and especially all the supporting documentations like income & expenditure statements, balance sheets, letters of employment and bank records. All these were still required in the last 3 years but due to the pressure of performing to shareholders and an obsession to gain market share, lenders did not verify applicant’s documents thoroughly. In the USA the phrase “approvals from applications” was coined. This means that lenders approved bonds from merely reading the bond applications from purchasers without verifying the information contained therein correctly.

The agents at Century 21 South Africa, together with our support team of bond originators are adequately qualified and have the necessary tools to thoroughly qualify any prospective purchaser for an anticipated bond requirement. The South African property market is sophisticated and our systems and procedures at Century 21 rank amongst the best in the world to make the sale of properties in South Africa a pleasant experience.

All Century 21 real estate offices are geared to ensure that the cliché, “Properties for Sale” is exactly that and not “Properties May Be for Sale at the Right Price if We Get the Right Purchaser”. Care is taken into valuating our properties for sale and care is taken on ensuring that when we present an offer to a seller, the chances of a bond approval are high by scrutinizing our purchaser’s borrowing profiles and risk profiles.

Hence our phrase “Century 21 – “Defining Service in Real Estate”. Any of our Century 21 Real Estate offices countywide will gladly assist you in any of your property related queries whether you are a buyer or a seller.

Harry Nicoliades
CEO