With the banks being ever so slightly more generous with approving applications for mortgage bonds, more people out there are (again) considering to purchase property. Whether the property you are considering to purchase is the highest valued asset in your estate or merely one of many in your portfolio, it remains of utmost importance to take the necessary care when approaching this transaction. What follows, are 11 handy hints and tips to bear in mind as a prospective buyer:
1. Contact a mortgage bond originator of your choice to ascertain, approximately, what you can afford (pre-approval). Consider the amount of a deposit, which should preferably be 15% to 20%. Consider the availability and liquidity of your funds, as deposits are usually required upon signature or within 5 (five) days of signature of the Deed of Sale. If your deposit is tied up on a 32 day call account, you should mention this to the estate agent.
- Buy within your means. Do not over extend yourself financially. Interest rates could be increased by the Monetary Policy Committee. Even though the Governor of the Reserve Bank has kept the repo rate level for some time now, an upswing is expected. There are also transfer costs, bond costs and banking fees, i.e. initiation fees to bear in mind. Transfer Duty is a part of the transfer costs and must be paid upfront a month before transfer on demand by the conveyancer. Always conduct diligent financial planning.
- Buy by comparison. Pay attention to the market and what is being listed and sold in your price range. Take note of expired listings. These are listings that have sat on the market week after week without selling.
- If you have found your dream home but are unsure of certain aspects of it, e.g. the roof or retaining wall, approach your attorney for advice. Certain clauses can be drafted that afford you greater protection in these instances
- Ensure that, when putting in your offer, you are certain as to which fixtures and fittings you are receiving. List any extras that you wish to have. A good estate agent will know what is included or excluded as they canvass these issues when they list the seller’s property.
- When completing the offer, have a date in mind when you wish to move in. If this date is earlier than the transfer date you will have to pay occupational interest on a pro rata basis. This means that you take possession and vacant occupation before the transfer date. If you do not wish to pay any occupational interest then you must state in the contract that you are taking possession and vacant occupation on registration of transfer. If you do take early possession and occupation, ensure that there is a clause in the contract that the seller will continue to insure the property right up to date of transfer. Always insist on possession dates and transfer dates and not to be mutually agreed to.
- Inspect the property as best you can. Open the cupboards to ascertain if any dampness has set in – you will immediately smell it. Check the walls for cracks, inspect the geyser, check the wooden floors for any damage, check the window frames and inspect the roof if possible. Also, do not hesitate to check behind items. This is your most valuable asset! One can also employ reputable companies to do this for you. Some sellers even engage the services of House Checking companies upfront as a means of full disclosure. Should you require such services, we can make recommendations of companies specializing therein.
- If you are buying in a suburb or a complex that has a Home Owner’s Association, ask the agent for the Constitution. This will assist you in realising your obligations as you will be required to become a member and there are monthly fees involved.
- With regards to pricing – be careful about “cheeky” offers that are too low. This often irritates sellers who will make a very high counter offer or will just not accept yours. Rather be guided by the agent and come in with a low market related offer. The agent has a better chance of closing the deal on a decent offer than an outrageous one. An outrageous offer from your side will simply result in either a rejected offer or a very high counter offer.
- Ask the agent if any offers have been made and why they did not succeed. This, too, is an excellent guide for you when putting in your offer.
- It is always prudent to have a conveyancing attorney peruse your offer and to discuss same with him/her. The conveyancer can assist with extra clauses that afford you more protection in situations that warrant additional protection.
Should you require any assistance or guidance regarding any of the abovementioned steps or procedures, we will gladly assist you. You are welcome to contact Mark Witzmann (firstname.lastname@example.org) or Meyer de Waal (email@example.com) on 021 461 0065.