Understanding the costs. Their knowledge of the housing market, and their ability to handle paperwork and deal with sellers on your behalf, will make for a much smoother process. Of course, this is also the most difficult part of the process, as this will all be for naught if you don’t find a home that meets your requirements. However, buying property is a big decision and it can be hard to know where to start – especially if you are a first-time buyer! Buying a house with cash will make you feel like a million bucks. But while it may seem daunting at first, it’s not like you’ll be wandering uncharted territory. Factors that affect this include your credit record, and the size of your deposit. A home is a significant investment, hence why banks have a system in place to help people acquire them within their affordability range, without having to file for bankruptcy afterward. Check your credit score. Now the part people generally enjoy most about the home-buying process, the house hunt itself. Naturally, the higher the better, and a high credit score rating is one of the most valuable personal finance assets you can have. You can apply to your bank for a home loan directly, or acquire the services of a home loan comparison service like ooba home loans. The entire process of buying a home can now be done remotely by both sellers and buyers. They receive a fee from the bank. 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. In amongst that is the stress of getting in early to view the property and put in an offer before anybody else does. See a home buying checklist with a step-by-step guide to buying a house, including all the to-dos to make your dream home yours. The path is well signposted, and there are expert advisors who can help you along the way. Once the home loan has been approved, the conveyancing attorney prepares the documentation for signature by all parties. As far as your bank is concerned, your credit score is a big number above your head that tells them how much of a risk you are. If you’re unsure where to begin, here’s a handy step-by-step guide to buying a house in South Africa, so you can approach one of the most important decisions you’ll make with clarity and focus: Before you start your house search, you should have a very clear idea of what financing is available to you for the transaction. DIY with our online prequalification tool, or speak to an expert. Have questions about buying, selling or renting during COVID-19? Terms and Conditions    Privacy Policy     Promotion of Access to Information, The ooba group subsidiaries Property Protector Financial Services and ooba Administration Services are Authorised Financial Services Providers (FSP No’s: 216 & 46293). Step 2 – Assess your credit record. Before signing the contract you should obtain advice from a solicitor, as well as any other expert you require (ie. Do your sums. Typically this comes down to how much of a loan he or she can … Save for a mortgage deposit. Buying a home. Step 2: Document preparation. The idea of buying a brand-new home can be tempting. Getting prequalified for a home loan is the logical thing to do before you even start looking to buy a new house in SA. If you want to buy a house, you’ll need a credit score of at least 650 so you can get a loan with a decent interest rate. Getting your bucks in a row. The buying process can be rather complicated and lengthy but here are some general guidelines to assist you every step of the way. Know what you are buying. Begin the search. Your credit score indicates to your bank whether your past debt repayment behaviour will make you a good risk or not. a financial adviser). “Rough estimates of what you think you can afford just aren’t good enough in these days of stricter lending policies from financial institutions,” says Rhys Dyer, CEO of ooba home loans, South Africa’s leading home loan comparison service. With such an assorted wealth of resources in one sunny land, finding the right spot to buy property can be a daunting task. Buying a house is a big financial commitment, and can be a lengthy exercise. Get home buying tips delivered straight to your inbox. Step 1: Document assembly. Buying a house in South Africa If you’re planning to buy a house in South Africa, these expert tips and overview of costs can help you prepare for buying property in South Africa. © 2021 ooba (Pty) Ltd. All rights reserved. Start with their Bond Calculator, then use the ooba Home Loans Bond Indicator to determine what you can afford. To make the home buying process that much easier, consider employing the services of a home loan comparison service like ooba home loans, who among other services, offer a range of home loan calculators that can help you determine exactly what you can afford. The less of a risk the bank determines you to be, the more favourable your interest rate. In the meantime, you should start putting some money aside for your first bond repayment, as well as any home renovations you’re hoping to undertake. Bear in mind that, as Rhys Dyer explains, “far from being simply an agreement, an offer to purchase is a binding contract; once you make an offer, you cannot easily change it”. Find an estate agent you can develop a good working relationship with (consider asking friends and relatives for recommendations). Make sure you have a good chance of getting bond approval before putting in an offer on a new house. Visit the local police station and ask about crime statistics. If you initially fail to secure bond approval, don’t lose heart. The steps to buying a house can be confusing and long: Buying a house isn't as simple as clicking a Buy Now button. When you buy property in South Africa, you’ll typically pay a transfer duty plus a registration fee and conveyancing fee. Get opinions on schools in the area (even if that’s not an issue for you now, it might be … The process is handed over to attorneys, who will handle the transfer of property from the seller to you and the registration of the bond over your property. Give some thought to: Once you have a clear idea of what you want, you can begin the house hunt. Buying a house is a big financial commitment, and can be a lengthy exercise. There’ll be nothing left to do but start all over again. Useful house hunting tips include scheduling house viewings for weekdays (so as to avoid the weekend rush), taking your own photos (rather than relying on agent’s photos, which are intended for marketing purposes), and coordinating your viewings so as to ensure they take place within a short window of time (otherwise there’s a risk of houses you view being sold before you’ve made your final decision). Find property in South Africa with Rightmove.co.uk - the UK's number one property website. When you’re confident enough in the process to go ahead with your purchase, bear in mind that ooba Home Loans offers a range of tools that make the home buying process a lot easier. Bear in mind you will have to pay a transfer duty to the South African Revenue Services (SARS). Furthermore, their services are free, as their commission is paid by the seller. Is there air traffic overhead? It’s worth the money to find any structural problems with the house that could cost you thousands to repair further down the line. Effective 1 April 2018, by order of National Treasury, Value-Added Tax (VAT) will increase from 14% to 15%. Buying a house in South Africa: A step-by-step guide. The strength of its housing market and house price inflation, which has risen by over 10.35%, make the Mother City an attractive property investment destination for investors. Rightmove.co.uk lists the very latest property in South Africa. 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). The attorney will draw up documents for the purchaser to sign, and send those documents to the Deeds Office, which will examine and approve the documents, normally within 8 to 10 working days. You can use an estate agent to make the search easier. Make an Offer to Purchase. A zero deposit home loan is indeed possible, and in fact, “more than half of all the applications received by ooba home loans are from buyers who have no access to a deposit” according to Rhys Dyer, with three out of four of these applications being successful. If you have identified your ideal neighbourhood and found a house or apartment that appeals, you’ve already done a lot of the legwork. These are classed as non-resident loans and are subject to foreign exchange approval from the South African Reserve Bank. Carefully choose your desired area by assessing convenience of location, checking crime statistics and talking to neighbours. Another way to gain prequalification is to get yourself verified by an expert. The offer to purchase should include a requirement for a home inspection. The auction house will hold the reservation fee until contracts are exchanged. You’ll get a home that’s in line with the latest trends in design and construction, and it should be move-in ready. Sellers are liable for all latent defects in their property for three years after the defects have been discovered. In the meantime, ensure you pay your bills on time, and don’t borrow more than you can afford; two of the most effective measures for securing a clear credit record. These are our top tips on how to buy a house especially if you’re a first-time home buyer in South Africa: 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. Making a wise investment . Talk about it. How to buy property without a home loan It is important that there is more than one way to go about purchasing a property in South Africa, you even have options when it comes to the deposit. 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. Carrying out investigations, including searches, into the property to ensure that it is appropriate for your needs. For example, if an inspector says a foundation is cracked but it’s nothing to worry about, start worrying – and get a second opinion. Banking on a budget. We spoke to four big banks in South Africa about their tips for buying a house. Of course, the first step is having a clear idea of what exactly those requirements are before embarking on a house hunt. 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. As part of the home buying process, you’ll also need to take out building insurance. Start with ooba home loans’ free, online prequalification tool, the ooba Bond Indicator. Before you make an offer on a house, negotiate the selling price and other property specific factors, such as fixtures and dates. Inheriting a house — while a generous gift from a loved one — kicks off a process that can be fraught with emotion. For example, if your monthly gross income is $4,000, you multiply this number by 0.43 to get $1,720, which is the total you should spend on debt payments. Step 3 – Find a real estate agent. The latter is especially useful, because the home loan comparison service (or bond originator, as they’re sometimes called) will send your application to multiple banks in order to secure you the best deal. Checking your credit score will help you determine your financing options; … As one of the most significant investments you’ll ever make, it should come as no surprise that purchasing a home is an extensive process. The seller will also receive a copy of the report, and it’s up to you whether to request that necessary repairs be made. 1. Once it’s all done, time to move in and enjoy your new home. Costs of buying property in South Africa. Like the estate agent, bond originators come at no cost to the buyer. You won’t inherit someone else's worn-out carpeting or have to look at some kid's initials scrawled into once-wet cement. Before a person begins the process of buying a house he or she will need to know what they can afford. For too long now, the process of buying and selling South African property and real estate has favoured one party: the seller. Please note that this increase will retroactively effect VAT-inclusive calculations in articles contained in our website. This will also help prepare you to ask questions about things that might affect your decision. Here’s what you will need to do to get yourself ready to take on the … This is also to ensure there are no issues with the property that could later bite you (ie. Good schools are a drawcard for young families. The desired size of the home and whether a garden is a necessity. Understanding the transfer of property process in South Africa Ask the estate agent for a list of similar properties that have sold there in the past year. Once you and the seller have come to an agreement, the next step is acquiring a home loan to fund your purchase. If you are looking for your dream property in South Africa, you have come to the right place! Where are the shops, police and fire stations, medical centres, schools, and hospitals in relation to your new home? Mortgages and home loans in South Africa Rules for home loans in South Africa may differ to those of your home country. Here is our six point plan to help make the home-buying experience as easy and problem free as possible. We are pleased to offer a range of property in South Africa. Estate agents generally act for the seller and the transferring attorneys / solicitors are nominated and instructed by the seller. This is because pre-contract is the best time for you and your solicitor to review the purchase, including: 1. Step 1 – Determine what you can afford. 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. Ever heard someone say, “I sold my flat and bought a house in 48 hours?” Or “Offer 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. To check your credit score, download a credit monitoring app. The first step is to ensure you know what you can afford, and the kind of home you wish to purchase. Checklist for existing home owners. In South Africa, the Western Cape province continues to outperform all other areas, with Cape Town remaining the most lucrative city in the country. The conveyancing attorney receives the deed of sale and all the necessary documents required to register the transfer of the property. Effective 1 April 2018, by order of National Treasury, Value-Added Tax (VAT) will increase from 14% to 15%. Documents. Then, once you’ve found a home that meets your requirements, you can apply for a home loan. 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