I am buying a house

Can you afford it?

The very first step in buying a house, is making sure you can afford it. Most of the banks in South Africa have a calculator that will show you your "affordability". Be very careful that you don't over-extend yourself. Only buy a house that fits within your budget. Consider all the costs involved in purchasing a property. Along with the cost of the bond, you should consider the insurance on the property, rates and taxes, as well as maintenance and upkeep costs. One thing that makes a big difference when buying a property is putting down a deposit. Not only will this bring down the monthly cost for your bond, but it also lowers the risk of the bond for the bank, which means you can negotiate for a better interest rate.

Make a shortlist of where you would like to live

Before jumping in and visiting random houses, first determine where you would like to stay. Would you rather stay close to work, but maybe drive a bit further to visit friends and family? Are you planning to stay close to schools or university? Another factor to consider is the average house price in each suburb. Why not get in touch with an estate agent or two and discuss the different suburb options? Many suburbs also have Facebook community pages that you can join and ask which suburbs would suit your needs. Lastly, even though we don't always want to think about it, is the crime in each suburb. Ask at your local police station or the local commutity safety forum for some statistics.

Let's go hunt for your dream home

This is where the fun starts! Driving around on a Sunday afternoon, you can visit all the homes that are on show that weekend. You can browse all the online property websites to get a sneak peek of each property before booking a viewing. Or you can skip the hassle and contact an estate agent, who will find properties that will perfectly suit your needs. We know it's tough, but make sure you stick to your own needs. Even if a house is really beautiful, think carefully to ensure it meets all your needs. It's no use buying a beautiful home, but then you don't have enough bedrooms for your needs. Or having a swimming pool, but you are too busy to maintain it.

Make sure you aren't buying someone else's problems

When visiting the property, perform a thorough investigation to make sure it's not going to cost you more to fix than what your budget would allow. Here are some things to consider: - Have a look at the walls to make sure that there are no cracks in the walls. If there are cracks, are they just superficial, or are they structural cracks? If unsure, take somebody with you to help you in this process. - Do the walls have damp in them? Some of the symptoms of damp in walls is that the wall will be discoloured (although a fresh coat of paint can hide this). Feel the wall to see if the plaster is maybe loose, or maybe if some areas feel drastically colder than other areas on the wall. (Hint: Most people never bother to paint or fix the damp issues inside closets, so that's a good place to inspect. - Look up! Check the ceilings for any damage, such as a skew roof, or any leaks. - Check the outside of the property for any pests or bugs that could damage the property. An example of this would be borer bugs that could eat the wood in a lapa. - Check for any exposed wiring or faulty electrics. Ask for the current owner to turn on the stove and oven, to make sure they are working. Ask if you can wash your hands, which gives you a good excuse to test the hot water in the house. - If there are any alterations or expansions built onto the house, make sure that these alterations are on the plans.

Sign the Offer to Purchase (OTP)

Once you have found your dream home, the next step is for both the buyer and seller to sign an Offer to Purchase (OTP). This is a document that stipulates the conditions of the sale. This is where you and the buyer will negotiate what will be included in the sale, as well as any other terms. Do you need to sell another property before buying this one? Is that beautiful water feature in the courtyard included in the sale? Make sure that all the details in this document are correct, as it is a legally binding document: - Check that the address and description of the property is specified correctly. - Ensure that the terms of occupation is correctly specified, and the amount for occupational rent. (Hint: this is usually 1% of the property's value per month) - If an estate agent is involved in the sale, ensure that their commission is specified correctly.

Apply for a bond

Once the OTP has been signed by both parties, you can apply for a bond, either via a bank or a bond originator.. If you are dealing with an estate agent, they can assist you in this process. It's a great idea to apply with a range of different institutions, so that you can shop for the best interest rate. Once the application forms have been sent in, the bank or bond originator will do an initial approval to ensure that you can in fact afford the property. If the property is above a certain value, they will send out a property valuator to value the property accurately. After the bond has been approved, you will receive a full quotation stating all the terms for the bond. Go through this document carefully, as this will affect your finances in the long run. Things to check are: - The term of the bond. Usually bonds are for 20 years, but you can negotiate a different term if you prefer. - The interest rate. This is where you can compare the different quotes so that you can choose the best deal. - The monthly repayment. This is the amount that you have to pay every month to service your bond. This will include capital amount, as well as any interest on the bond

Electrical Certificate of Compliance (COC)

Remember! It is the SELLER'S responsibility to provide the Electrical Certificate of Compliance (COC). It is illegal to sell a property in South Africa without this certificate.

Legal Transfer Process

When the OTP has been signed, and the bond has been approved (if you are buying with a bond), the attorneys take over the process. There are three sets of attorneys involved in a property transfer: - The transfer attorney, selected by the seller - The cancellation attorney, selected by the seller's bank - The bond attorney, selected by the buyer's bank.

Don't forget to insure!

Nothing could be worse than spending your hard-earned money on your dream home, and losing it to some disaster. Make sure you are adequately insured!

Wait patiently!

The only thing left for you to do, is wait for your home to be transferred into your name. This is where the attorneys we mentioned earlier submits all the documents, and the deeds office processes the transfer.