buying a home

In May, we outlined steps and key considerations associated with selling a home. This month, we consider the process from the perspective of a buyer.


Because buying a home involves a significant investment and, for most people, a long-term commitment to repaying a bond, it can be a stressful experience. It can also involve various costs that aren’t included in the agreed selling price.


If you or someone you know is planning on buying a home, we hope this step-by-step guide helps simplify the process, along with providing some useful tips.


1. Create a property checklist

Before you start house hunting, assess what kind of home you want. It’s vital to narrow down what it is you’re searching for to prevent wasting time on goose hunts, especially if you’ll be using the services of an estate agent.


Make a list of your space requirements – now and in the foreseeable future – and whether you want a garden, swimming pool and/or outdoor entertainment area.


Itemise the amenities and facilities that should be within easy driving distance, or even walking distance, of your home, such as schools, public transport nodes, parks or recreational areas.


Also shortlist a few neighbourhoods that appeal to you.


Then you can move on to the next step with a clear picture of what you really want.


2. Find your dream home

Take your time in finding your dream home. Browse property websites, sign up for alerts of houses for sale in your favourite areas and spend your Sunday mornings viewing show houses in your preferred neighbourhoods.


Chat to as many people as you can to get a feel of the pros and cons of living in a particular suburb or street. Find out, for example, if there’s high crime in the area and how the community responds it.


Once you’ve narrowed down your choice to one or two homes, visit the properties at different times of the day to assess road noise, congestion or foot traffic and, if you’re in the Cape, the wind factor!


3. Get a pre-approved home loan

You’ve found your new home, and are ready to make an offer. Unless you plan to make an outright cash purchase, now is the time to secure a pre-approved home loan.


Banks and mortgage originators assess your financial situation, considering factors such as your monthly expenditure, crediting rating and existing debt, to determine your bond pre-qualification amount.


Once your bond application has been approved, you’ll receive a quotation reflecting the bond amount, the interest rate and the required monthly instalment.


You’ll then be issued with a pre-qualification certificate. This can give you extra leverage when negotiating the price and terms of purchase.


4. Make an offer to purchase

Now that the agent and seller are aware funds are readily available, your next step is to make a formal offer to purchase (OTP).


This is when you negotiate the price, what fixtures are included in the price, the date of occupation and whether pro-rate rent applies if the date is not adhered to.


The OTP should also contain the conditions of sale. Is the sale subject to the sale of another property or inspection compliance certification? It should state how long the offer is valid for.


If you’re paying a deposit, include the amount in the OTP. Once the seller has accepted your offer and the deposit is paid to the transferring attorneys, it is held in trust until the sale is legally concluded and the property registration process begins.


5. Property registration

Property registration is done on your behalf. Transfer documents, the buyer’s bond documents and the seller’s bond cancellation documents are lodged simultaneously at the Deeds Office.


Once the property is transferred to your name, the bank releases the bond amount and the transferring attorneys pay the deposit amount to the bank. At this point, you are the proud owner of a new home!


6. Breakdown of extra costs

In addition to the deposit and monthly bond instalments, the buyer of a property is liable for the following extra costs:

  • a bond registration fee, paid to have your bond registered over the property’s title deeds; on a R2 million bond, you’ll pay approximately R16 560, excluding VAT
  • sundry costs of around R600 to cover the costs of postage and petties
  • transfer costs – a government tax, calculated as a percentage of the value of the property plus a flat rate, levied to transfer the property from the seller’s name into your name; no transfer duties are currently payable on properties sold for under R900,000
  • conveyancing fees, paid to an attorney for transferring and registering the home in your name; you can expect to pay around R20 000 on a R2 million property
  • a fixed fee, charged by the Deeds Office, to transfer the title deed and register the property in your name; a ballpark figure is R900, given a R2 million bond.

You’ll also have to cover monthly expenses associated with your home, such as  a levy or rates, home owners’ insurance premiums and utility bills.


If you’re in the process of buying a new home, you may need somewhere safe to store household belongings. XtraSpace offers flexible, affordable and secure self-storage. Find a branch in your area or call us on 0861 250 259 to discuss your storage needs.

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