The secret to finding the best property deals before anyone else does (Market Makers)

Success is a team effort and the property game in my opinion is the greatest team sport ever invented. In my books I often refer to what I call market makers, people who are at the cold face of new opportunities, and if you want to make it in the property game you need to get close to the market makers. The old adage, it is not what you know but who you know applies very strongly to property circles in South Africa.

Although there are a number of market makers in the property game, there are two that stand out if you are looking for the best property deals in the market: Estate Agents and Property developers.

When most investors or any property buyers for that matter want to purchase a property, what is the first thing that they do? They run out and buy a newspaper and think that they are finding bargains in it.

This might come as a surprise to most, but if you see a property advertised for sale in the Saturday newspaper you are too late. The best property deals that have been done in the past and will continue to be done in the future will never ever be advertised in the newspaper.

Just to drum this home even more on a personal note not one single property that I own or have developed was ever advertised in the newspaper.

The reason for this is quite simple. In SA, Agents have to spend enormous sums of money on advertising cost that are paid upfront and only recovered once the commission becomes payable.

Because the commision earned by the agent can be considerably reduced by the advertising costs, agents will do everything in their power to try and sell the property without having to incur the advertising costs.

To do this the agents begin by calling their list of preferred investors, in other words investors that they have previously done business with. If the preferred investors are not interested, the agents move on to phase 2 which involves e-mailing their database, which for some agencies can consist of thousands and thousands of buyers. If they are still unsuccessful, the agents only then advertise the property in the newspaper.

Once the property is advertised in the newspaper, as a potential investor you are in reality the third tier of purchaser that the agent is trying to reach. You will suddenly find yourself as one of many amongst the madding crowd calling the agent and trying to do a deal.

In a rising market the sale of the property then becomes nothing more than an auction and you will end up paying the seller full asking price or more to secure the deal. Estate agencies, particularly the larger agencies, actually admit that they don't advertise in the newspaper to sell houses, but rather to attract more sellers to give them mandates.

The lesson in this as an investor is love them or hate them you need to draw close to estate agents. The next time you go to a show house, don't do what everyone else does, in other words, leopard crawl around the house, be rude to the agent and then run out the house without leaving your details. Take the time to introduce yourself and to explain very clearly what kind of property deals you are after. And so what if the agent calls you 3 times a day after that, it just might happen that one of those calls could change your life forever.

Property developers are also market makers that are worth drawing close to because they know what properties they will be bringing to the market before anyone else does. By drawing close to developers, you will position yourself to have the first pick of any new product coming to the market long before the product has even been advertised.

Buying properties directly from developers is a win win for the investor for a number of reasons:

  1. The investor gets to choose the best units in the development prior to the launch date. I am sure you have seen many advertisements for the sale of developments that state on the launch date that five units have already been sold. The five units have been sold to investors that have contacted the developer directly and you can be sure that they are also the five best units available.
  2. By purchasing a property off plan from the developer, the investor is purchasing the property at today's price for a product that may only be delivered in twelve to eighteen month's time. In an upward moving market, just by signing an offer to purchase the unit and paying a small deposit, your unit could increase in value by twenty to thirty percent before transfer, and in a slow market by 3 to 10% before transfer.
  3. An additional bonus for investors buying units from developers is that there is no transfer duty payable as most developers are registered for VAT. The effect of this is that if the bank grants you one hundred percent finance to purchase the property, you will not have to fork out an additional amount over and above the purchase price to take transfer.

If you do not know any estate agents or property developers personally, allow me to introduce you to some of the best players in the game under market makers.

Commercial Property Agents

Andries Louw andries@annenberg.co.za
AJ andrew@annenberg.co.za
Michael Birch michael@mbps.co.za
Tony Bales tony@balesdelaporte.co.za
Mike Clark mikeclark@polka.co.za
Kevin Childs KevinC@pearscommercial.co.za
David Harris dharris@eris.co.za
Graeme Smith graeme@360prop.co.za
garyp@diamondproperties.co.za
jean@devmark.co.za
Justin Leve justin@benchmarkprop.co.za
Len Pears pears@fast.co.za
Morgan Morris morganmorris@mweb.co.za
Steven Ruffel steve@annenberg.co.za
Pieter Prinsloo pieter@annenberg.co.za
Rob Murray rob@robmurrayproperties.co.za
Clinton Marais cmarais@broll.co.za
William Wakefield wwakefield@broll.co.za

 

Residential Property Agents

Dylan Burke dylan@ipsinvest.com
Bill Rawson bill@rawsonproperties.com
Belinda Keys belinda@seeff.com
Ingred Blicher-Hansen ingred@seeff.com
Carol Bracken carol@greeff.co.za
Kyle Curran kyle@headsproperty.co.za
Heather Cape hmcape@greeff.co.za
Ron Durbach ron@rondurbach.co.za
Elaine Dobson elaine.d@sothebysrealtyss.co.za
Vangelis Doucas vangelis@greeff.co.za
Mike Greeff mike@greeff.co.za
Heads Residential Property jonathan@headsproperty.co.za
John Herbst jherbst@pamgolding.co.za
Kurt Wucherpfennig kurt@seeff.com
Scott Picken scott@internationalpropertysolutions.com
Simon Raab simon@greeff.co.za
John Birkett birkettj@intekom.co.za
Stephen De Villiers devilliersstephen@gmail.com

 

Residential Letting Agents

Paul Grobler paul@propertybureau.co.za
Seeff Rentals rentals@seeff.com

 

Auctioneers

Farrell Perling Farrell@Claremart.co.za
Jonathan Smiedt jonathan@claremart.co.za
Rael Levitt RLevitt@alliancegroup.co.za
Tanya Javanovski tanya@rawsonauctions.com
Rob Whiteley rob@rawsonauctions.com

 

Property Developers

Nikki Davy nikki@rabie.co.za (Johnny Rabie)
MFS Property Developments mfs.pd@bigfoot.com (Miguel da Silva)
Drew Danford drew@bellandia.co.za
Jon Eagar jeagar@eris.co.za
Giancarlo Lanfranchini giancarlo@swishproperties.co.za
Nicholas Hayes nicholash@amdec.co.za
johnny@airportcity.co.za (Johnny Cullum)
Mark Mouton mark@atterburycape.co.za
Simon Waner simon@warnerprojects.co.za

 

Financiers

Rowena Marthins RowenaM@Nedbank.co.za (Commercial and new developments)
Andre Olivier andre@silverbackkonsult.co.za (Commercial and bridge funding)
Colin Bird colinb@grindrodbank.co.za (Commercial and new developments)
Else Van Der Walt ElseV@Boe.co.za (Commercial and residential)
Grant Kelly Grant.Kelly@standardbank.co.za (Residential)
Leigh Wiltshire lwiltshire@businesspartners.co.za (Joint Ventures)
Dumisani Ncala dumisaninjr@boe.co.za (Structured finance)
Lance Hunter Lance@quantumcapital.co.za (Structured finance)

 

Real Estate Attorneys and Conveyances

Adriaan Hoeben ahoeben@shg.co.za (Litigation)
Brett Weddell prop1@pagdens.co.za (Litigation)
Hette-Lize Walters claremont@kdj.co.za (Conveyancer and property law)
Mike Collins Mike.Collins@dlacdh.com (Conveyancer and property law)
Debra Gouws debra@gouwsattorneys.co.za (Conveyancer and property law)
Martine Newman  martinen@stbb.co.za (Conveyancer and property law)
Belinda Lewis         belindal@stbb.co.za (Conveyancer and property law)
Martin Sheard MartinS@stbb.co.za (Commercial and property law)
Alison Tooley AlisonT@Pincus.co.za (Conveyancer and property law)

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