The Complete Buyers Guide to Purchasing a Property
Category Property Advice
Purchasing a property is not a simple task, with a lot to consider for prospective buyers, from where to buy to financial considerations. This guide aims to help you navigate the process from start to finish.
The Right Agent
It goes without saying that when looking for a new property, that you need to use the right agency. Credibility and knowledge of not only the industry, but the area that you are looking to buy in, is incredibly important to ensure you get the right property, at the right price in an area that ticks all the boxes for what you are looking for.
Research the Area
Once you have the right agent, it's time to lean on their knowledge of the area you are interested in purchasing a property in. Do your own research as well, look at trends in the area, and consider the property values - are they getting better or worse? What makes it special and are there any historic issues or future developments worth considering? Speak to unbiased locals and previous residents to get an idea of what the area is really like. Find a neighbourhood that offers your desired lifestyle. Important things to consider are security and proximity to work, schools, healthcare and shops.
Credit Score
Look after your credit score, because the bank will reward low-risk debtors with low interest rates on a loan. Risky debtors will get hit with a higher interest rate as the bank looks to protect itself against risk of lapsed payments. Improve your credit score by settling accounts and credit cards, pay bills on time, reduce your spending and don't apply for more credit.
Transfer Costs
Purchasing a new property is a costly exercise and buyers need to be prepared for costs beyond the asking price of the property they are looking to buy. Costs involved with the buying of a property includes bond registration attorneys, conveyancing attorneys, bond initiation costs and transfer duties. You can use this handy calculator to work out all your bond and transfer costs.
Deposit
It's important to have a saved deposit.
This will give you a better chance of having your bond approved, your repayments will be lower and you will be able to negotiate a better interest rate with the bank as you will be seen as a lower risk.
The Property
This is where the trusted property advisor comes in again. Work with somebody your trust, advise them on what you are looking for and your price range. View as many properties as possible to ensure you find one that works for your needs. Important things to consider - do you want to live in a freestanding house, apartment or complex? Is the building or complex well run? How much are the levies and rates? Is it pet friendly? How much work does the property need and will it require a lot of maintenance?
Pre-Approved Loans
Get a pre-approved loan so you know what you qualify for, and you don't want to spend time looking only to find out you don't qualify for the property you want. Speak to your property advisor on how to go about getting a pre-approved loan.
Inspect the Property
Make sure you do a thorough inspection of the property and make note of any water damage, structural damages, and any other general damages. Don't be afraid to look behind cupboards, in drawers, inspect the flooring. You can use these to factor in a lower offer or have the repairs listed as a condition of sale.
Look beyond the asking price
How much is the property going to cost you in the long run? Make sure you consider the costs beyond the offer you put in. Ensure you factor in the combined costs of your bond repayments, levies and rates. You will also need to consider maintenance costs on the property. You may need to pay occupational rent if you move in before the transfer goes through.
Plans
If the agreement does not oblige the Seller to deliver copies of approved plans, the Purchaser has to incur costs.
Negotiate the OTP
Make a formal Offer to Purchase (OTP). Speak with your trusted property advisor and get their guidance on what number to go with. It's important to have a credible agent that understands the market and can assist with the negotiation.
Use a Bond Originator
Using a bond originator will help you get the best home loan as they apply to all the banks on your behalf. Using an originator helps with the administration and increases your chances of getting approved. You do one application and they will apply to multiple banks, including yours. The service is free of charge with the originators paid by the banks for the business.
Bond approved, what's next?
Once your bond has been approved, that's not the end of the process or the costs you will incur.
The bank will next appoint a bond attorney to draw up the necessary documents, while the seller will appoint a conveyancing attorney to take care of the transfer of the property into your name.
The former will charge fees for the registration of the bond, while the conveyancer will charge you for the transfer of the property.
The fees will be dependent on the cost of the property.
If the property is valued at more than 1 000 000, you will also need to pay a transfer duty to SARS.
You can use The Agency Property Group's Transfer Cost Calculator to determine what the bond registration and transfer fees will likely be.
Moving Day
Moving home can be admin-intensive and stressful.
Consider the cost of hiring a removal company or doing it yourself, but this is dependent on the amount of objects needed to be moved and / or the distance of the move in question.
The timing of the move is important, make sure you get the timing right for all the parties involved: the seller, the buyer of your current property (if applicable), the removal company and any other parties (a tenant in the property you are buying).
Enjoy your new home
Keys in hand, you're in your new home and ready to start your next chapter. Make sure you have everything you need to make it a fresh start and stay in touch with your agent should you need anything to keep things as stress-free as possible, such as keys, plug-points, amenities and anything else you may need to know.
Author: The Agency Property Group
