Monday, October 22

Sight unseen now drawing foreign buyers

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Some investors use remote viewing to sign for properties without stepping inside them

Would you buy a home you have only seen online and have never walked through in real life?

This is what some foreign buyers of South African homes are doing. According to agents, they are relying heavily on online property viewing with a few even signing on the dotted lines without physically seeing the properties.

Most tend to catch planes for final round viewings, but for them to still be considering a property at the end of their searches they would have needed to be sold by the online “show”, say agents.

South African buyers are also making increasing use of online property viewings when looking to purchase homes in parts of the country in which they do not live.

Read: Full range of tools to facilitate viewing

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RealNet says its national service deals with this issue “quite frequently” for many buyers, including those in the UK looking for homes while they work in South Africa on contract, and those relocating from one part of the country to another.

“There is ongoing relocation between Gauteng and Cape Town, KwaZulu-Natal and the Garden Route, for example, as well as between mining towns and other locations where contractors are needed for infrastructure or other medium-term projects,” says managing director Gerhard Kotzé.

Buy-to-let investors who have developed trusted relationships with agents in remote locations will rely heavily on their expertise and “readily buy” properties that deliver the right sorts of returns without viewing them.

Requests are also received from people who live in country towns or estates who want city apartments or townhouses close to work so they can do weekly commutes as opposed to daily.

“Generally these are top professionals and executives who don’t have a lot of time to hunt for properties themselves and would rather give us a brief about their area, space and security preferences.”

A “surprising large number” of buyers are doing so without seeing the property, says Rowan Alexander, director of Alexander Swart Property. 

This includes those from out of the country or province who have visited an area before, liked what they saw, but did not have time to look at houses.

“On returning to their homes they set about researching what is available on the market in the area that like. In some cases, they may be South Africans living and working abroad who are looking for a holiday or retirement home in South Africa, but who may not have been here for several years.”

New technology, like Matterport, allows buyers to view ‘doll house’ replicas of homes and zoom into areas for 3D virtual reality experiences. Picture: Matterport

Buying before ever seeing the property is rare, according to Mike Greeff, chief executive at Greeff Christie’s International Real Estate. 

He says he recalls only one remote sale in which an overseas buyer bought two plots of land without viewing the plots.

“Very often (residential) buyers tend to do their initial search on the Greeff website, narrow it down to the two or three houses that fit their requirements and view those, or send a representative to view the home if they live in another city or overseas.”

He says all buyers of Cape Town property search their areas of choice for properties on the various website portals before narrowing it down and viewing.

In the property industry remote viewing is also referred to as “buying sight unseen”. Basil Moraitis, Pam Golding Properties area manager Atlantic Seaboard, agrees that it happens infrequently and “really only in a hotly contested market”.

He describes such a market as one which is short of stock and has buyers competing for the same property, fearing losing it to a local buyer who has the opportunity to view.

“Invariably, such instances of buying sight unseen occur when the buyer is familiar with a sectional title block after having viewed other apartments in that block and being familiar with its position.”

Properties that are on the market and are rare, well-priced, or being developed will have more chance of being bought remotely, says Ian Slot, managing director for Seeff Atlantic Seaboard and City Bowl.

Popular coastal areas also tend to see, to some degree, more remote buying.

“You could, for example get instances where a Joburg or foreign buyer wants to buy something in Clifton or Camps Bay. These buyers would want to receive photos and a video they can view online and then narrow down their viewing to a shortlist of say three, or might even put in a remote offer.

“This type of buying might also appeal to investors looking for rental properties which they would buy and then immediately list with the same agency for rentals.”
Another case where remote buying may be more inclined to be seen is when a buyer is after the location more than the actual house.

“If it is a prime site on the Atlantic Seaboard in an area such as Clifton, Bantry Bay or Camps Bay, for example, you might find the buyer is more interested in the position than the actual house because they will renovate, rebuild, or even knock it down and build their own dream house.”

Most of Seeff’s remote buyers in Hermanus are from within the Cape, Gauteng and overseas.

“Overseas and other remote buyers might ask for a video of the property so they can get a good feel for it,” says Seeff agent Billy Rautenbach.

Other popular options are vacant plots when there is not a lot of stock and more competition among buyers, and they do not want to lose out on an opportunity, or when the property is in the lower price ranges.

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