The A-Z of the home buying process in South Africa
The excitement wrapped up in buying a house for the first time must be tempered with a sensible approach to managing what could be the biggest financial investment you’ll ever make.
Ever heard someone say, “I sold my flat and bought a house in 48 hours?” Or “All offers accepted with only bond approval outstanding?” “Only” is a big word, in this instance, because imagine the disappointment if it all amounts to nothing and the banks don’t give the thumbs up for the home loan. There’ll be nothing left to do but start all over again.
The process of buying a house in SA can be a whirlwind of activity from the time you see the for-sale advertisement to the point when you’re ready to make an offer to purchase. In amongst that is the stress of getting in early to view the property and put in an offer before anybody else does.
If you’ve already done your homework and have decided on the area you want to buy into, you’ll save yourself a lot of heartache if you investigate the financial requirements upfront. These are our top tips on how to buy a house especially if you’re a first-time home buyer in South Africa:
1. Get prequalified before you buy Getting prequalified means simply getting an idea of the price range you can afford, based on your net monthly income and credit score, using ooba’s free, online prequalification tool, the ooba Bond Indicator. This prequalification is an indication of what you qualify for, based on what you input as your income and expenses, and your credit score.
2. Choose your area wisely If you have identified your ideal neighbourhood and found a house or apartment that appeals, you’ve already done a lot of the legwork. If not, you’ll need to do a bit more research into the process of buying a house in SA. Ask the estate agent for a list of similar properties that have sold there in the past year. How does your future home compare? If it’s at the top of the price range it might be hard to resell, but if it’s at the lower end you can only benefit when prices of other homes begin to increase in value.
3. Talk about it Get opinions on schools in the area (even if that’s not an issue for you now, it might be when you want to resell). Good schools are a drawcard for young families. Visit the local police station and ask about crime statistics. If they’re unavailable for some reason, the estate agent may be able to assist you with that information. Neighbours and store owners in the area will also be a good source of information.
4. Assess the convenience of the location Where are the shops, police and fire stations, medical centres, schools, and hospitals in relation to your new home? Are you close to a major road or highway? Is there air traffic overhead?
5. Request documentation It’s a good idea to ask your estate agent for a copy of the documents you will be asked to sign if you decide to buy the property and read them ahead of time to make sure you understand what is expected of you. This will also help prepare you to ask questions about things that might affect your decision. If the home is under sectional title, ask the agent to provide you with up-to-date body corporate financial statements and check that the levies are not in arrears.
6. Get a house inspection It’s worth the money to find any structural problems with the house that could cost you thousands to repair further down the line. Once you have the report you can ask the necessary experts to quote on any essential repairs. There’s no harm in getting a second opinion if you’re not happy with the inspection report. For example, if an inspector says a foundation is cracked but it’s nothing to worry about, start worrying – and get a second opinion.
South Africa’s leading bond originator offers a range of home loan calculators to help people looking to buy a home determine what they can afford. Click here to access ooba’s free, online prequalification tool, the ooba Bond Indicator. Then, when you’re ready, you can get prequalified or apply for a home loan with ooba.