WATCH: How to buy a home
If you do not want to have your heart broken by losing your dream home to someone else, then make sure you are 100% ready to commit.
And getting ready does not start with searching for your perfect match – your first need to know what you can offer.
“Most people go straight to the portals and start looking for houses to buy,” says Grant Gavin, owner of Remax Panache.
“They start dreaming about the property they want to buy and then, at some point, contact the agent.”
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“We walk through and feel like this could be the home of our dreams. We imagine raising our children in it. We fall in love with it on an emotional level.
“We get to the point of putting in an offer and then hope we get the bond.”
The wait to hear whether a bond application is successful can take up to 14 days, and all this time the dreams grow. So when the call comes saying the application is declined, heartbreak ensues.
“Imagine dreaming about your whole future in that home and imagining your children growing up there – it is like a rug being pulled out from under your feet.”
To avoid this, Gavin says the first step in the buying process is not to house hunt but to work out what you can afford and have a bond originator assist with this and gaining pre-approval.
“Once you have got that number, add to this the deposit amount you have saved up. Factor in transfer duty and then you know the price range you can look at.
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“This will avoid so much emotional turmoil.”
Aspiring homeowners should also have their paperwork ready for the bond application.
“There is a 21-day period for you to get your bond after putting in a written offer-to-purchase. After this, the sale will fall through so make sure you do not waste that time trying to only then get your documents together.”
For employed buyers the banks will require three-months bank statement, proof of income, and conduct a credit check. Self-employed buyers will need to have their business financial statements ready, even if they are buying the property in their personal capacity.
“As soon as the bank sees that you own a business, they will ask for those financials, so claiming that you get paid a salary from the business will not work” he says, emphasising that 21 days goes by quickly if one still has to get their documents in order.
“And if the seller gets a back-up offer during that time, he can accept it as soon as the 21-day period is up.”
When you are ready to start the hunt for your home, Gavin offers the following advice:
• Location is the most important aspect to consider. Always buy the biggest house you can afford in the best area. Your property will be valued in comparison to the rest of the properties in your street so if those are all bigger than yours it will affect your value favourably. Also consider where you work and where your children will go to school.
• Go to the Town Planning department to get the property plans for that area. You do not want to buy before finding out that there is a massive freeway being built through the area, for example. Your estate agent will also have an idea of any developments planned for the area.
• Register with the estate agents instead of just waiting for properties to be listed on the portals. They will know what properties are coming onto the market before they are listed so they can contact you as soon as they hear of anything that will suit your needs.
• Get a professional property inspection before you buy the property. Estate agents are not home inspectors. An inspection report will cost you about R3000 to R4000 but in comparison to what you are paying for the home, it is minimal – but so worth it. Often there will be issues with the house that not even the seller is aware of. And if this is the case, he or she cannot be held liable due to the ‘voetstoots’ clause.
• View as many properties as you can. The more you view the better your understanding of value will grow. By comparing different properties you will be able to see which offers you more value – and this will not always be reflected in the price. Also, never judge a book by its cover. Even if you do not like the outside, still view it as you never know what the inside holds. Similarly, a home that may look a bit neglected inside or perhaps not to your personal liking may still be worth some minor work.
Gavin also explains that the three factors that affect property value and selling price, irrespective of market conditions which affect all properties equally, are:
• Location: identical properties in two different areas – for example one with a sea view and another on a freeway, will have different values, despite being the same in all other respects
• Condition: identical properties in the same street, but in different conditions – for example, one that is in pristine condition and another that has been neglected, will not have the same value or selling price
• Accommodation: identical properties in the same street, and in identical condition, will be set apart by the number of bedrooms they offer. The one that offers 3-bedrooms will have a higher value than the one that offers two bedrooms.