I had never been so stressed in my entire life... I just received yet another phone-call from the estate agent, telling me it's too late to walk away from the deal. Why would I want to walk away, and what on earth had me so stressed? Not knowing enough about how buying property works, that's what. Again, it's something most people treat as if you DO know, so it can be frustration upon frustration when you have to learn on the fly like we did.
When buying your first property, start off by viewing as many as you can that are in your price-range. Those nifty little installment calculators they have at the top of many property-advertisement apps nowadays is great, but have you considered the rates on that property? Would you need garden services (if you're not currently paying for it) to maintain the place? If it's an apartment, what would the levies be? Are there special levies that they impose from time to time? A good place to start is to allocate at least 10% to 12% of the purchase price of the new property to bond & property costs in your budget, so if that shiny new apartment costs R800 000, as yourself, do I have R8 000 to spend a month on this property? If not, you know that's a little above your price-range, and you should lower the purchase-budget a little.
Next, ask for the estate agent to give you a brochure to explain what the attorney's fees will be. Remember, there are two sets of attorneys so you need to know in writing how much each attorney will charge before you sign an offer to purchase. You will need to pay this amount up-front along with your deposit.
Deposit? Yes, you will find that there are two types of apartments if you're not fortunate enough to buy a freestanding house as your first property. Share-block properties mean that the apartment block is owned by a company, and you are essentially buying shares in that company, which entitles you to x-amount of floor space. The barrier to entry on a share-block property is very high because they will ask for at least 40% of the purchase price for a deposit.
The other is a Sectional-title apartment, which means you will normally have to come up with a 10% deposit. Bond originators will further add an origination/initiation fee (which also works on a sliding scale according to the price of the property) to the price, which is also payable up front. With all of this, don't be afraid to ask for discounts - your attorneys can give discounts, and estate agents can help negotiate further discounts for you as well. Those who don't ask, don't get!
Great, you have asked all the right questions, you know how much it will cost a month, and you want to sign your offer to purchase. As part of South-African law, you will be entitled to a Certificate of Goodstanding from an Electrical Contractor on purchase, as well as an Entomologist Report to say the place is in good condition, but something else you may want to check if it's an older building is the plumbing. It will cost roughly R500, but having a plumber give you the thumbs up on your geyser, water pressure, and overall condition of the plumbing and attachments will give you peace of mind, and potentially save you some money down the line.
As soon as your offer to purchase is accepted there is a fairly lengthy process that starts where you will be called in to sign the contract, after which you will need to wait 6 - 8 weeks for the transfer to take place. Once this is done, you can arrange to receive the keys and move in! It can be a very exciting process.but it can also be massively stressful to purchase something this life-changing if you don't know enough. I may have left a few things out, but please feel free to leave a comment to let us know if there is anything else you would like to make everyone aware of!
