Step 1 – Know how much you can buy for. This will allow you to know exactly how much you qualify for. You’ll need a good credit record and a stable income. It’s best to do this before you start your house hunting. Your bank or a mortgage originator can assist. Generally, your monthly bond repayment should not exceed one-third of your income. If you’re married or in a partnership, you can combine your incomes to assist with affordability.
Step 2 – Be ready for a deposit down payment. Although first-time buyers can qualify for home loans of up to 105%, you may need a cash deposit of 10% to 15% as security. It is always advisable to invest a deposit if you can as it brings down your monthly payments and creates an equity buffer.
Step 3 – Cash needed for costs. You will need to pay transfer duty to SARS on all purchases above R900 000 plus conveyancing and bond registration costs for the transfer process. While there is no transfer duty, a R900,000 purchase would still require costs of around R52,500. Don’t forget to also budget for moving costs to get you settled in your new home.
Step 4 – Prep the paperwork. An extensive set of paperwork is required including certified copies of your identity document/s, marriage certificate and Ante-Nuptial Contract (if applicable) plus the last three month’s payslips and 3-6 month’s current bank statements, stamped by the bank.
Step 5 – Where do you want to live. Consider the type of property you need such as a flat versus a house and then the potential areas where you could buy. Check for price ranges in the area, access to amenities, traffic and transport availability and crime stats. An active community and Neighbourhood Watch are plus factors for a neighbourhood.
Step 6 – Online house hunting is a breeze. There is a host of places to look, from property portals (e.g. Private Property) to agency websites and property supplements. Digital technology means you can view a series of photographs and often a virtual tour before setting up viewings. Communicating with agents is also so easy these days via cell phone or messaging.
Step 7 – Put your best offer forward. First, do a thorough inspection of the property for structural faults and obvious poor maintenance issues. Once satisfied, put your best offer forward. The agent will advise whether your price is in the acceptable range and be prepared to present a counter-offer should the seller reject it.
Step 8 – Offer accepted, time to get a bond. An Offer to Purchase is a legally binding contract and once accepted, you need to fulfil the conditions such as securing a home loan. The agent will assist with the loan application (with the help of a mortgage originator) or you can attend to that yourself. You will now need your first set of documents (ID, marriage documents and 3-6 months bank statements). Once the bond is approved, the transaction can move forward.
Step 9 – Now the attorneys take over to get the transfer of ownership underway. The seller appoints the conveyancing attorney and the bank the bond registration attorney. You will need a full set of documents (ID, marriage etc.) along with the deposit (if applicable) and transaction costs which must be paid to the conveyancing attorney. The Conveyancer will prepare all the documents and make the necessary payments to obtain the rates and service clearance certificates (e.g. electricity, plumbing/water etc.). The Conveyancer will then lodge the documents in the local Deeds Office where they will be inspected and if approved, the transfer will be registered.
Step 10 – Transfer is registered, you can finally move in! It can take up to three months for registration of the transfer into the buyer’s name giving you time to prepare for the move. The conveyancer will advise once the transfer is registered. If you are a cash buyer, the title deed will be sent to you, alternatively, to the bank if you have a mortgage loan. Once the transfer is registered your bond repayments will commence. Occupation is also usually upon registration of transfer.