buying a house in south africa process

If not, you’ll need to do a bit more research into the process of buying a house in SA. Find an estate agent you can develop a good working relationship with (consider asking friends and relatives for recommendations). Checklist for first-time buyers. 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. Step 2: Document preparation. Typically this comes down to how much of a loan he or she can … 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. Documents. Is there air traffic overhead? Factors that affect this include your credit record, and the size of your deposit. 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. Have questions about buying, selling or renting during COVID-19? 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. Making a wise investment . Finally, when you’re ready, you can apply for a home loan. 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. Then, once you’ve found your dream home, you’ll need to come to an agreement with the seller by signing an offer to purchase, and you’ll need to get access to finance from a lender (usually a bank) by applying for a home loan. “It’s true that anyone can look for a home, and even get a peek inside, without the help of an estate agent but, unless you have the time to make house shopping a full-time job, chances are an agent will be able to match you with your perfect property considerably faster,” says Rhys Dyer. Visit the local police station and ask about crime statistics. Property in South Africa. Check your credit score. Get opinions on schools in the area (even if that’s not an issue for you now, it might be … As part of the home buying process, you’ll also need to take out building insurance. There’ll be nothing left to do but start all over again. The path is well signposted, and there are expert advisors who can help you along the way. The aforementioned Bond Indicator, as well as being able to determine your affordability, can also provide an estimate of your credit score. Inheriting a house — while a generous gift from a loved one — kicks off a process that can be fraught with emotion. A good starting point would be to use a bond affordability tool, such as ooba’s Bond Indicator, which is a free, online tool. Once the home loan has been approved, the conveyancing attorney prepares the documentation for signature by all parties. We spoke to four big banks in South Africa about their tips for buying a house. 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). Then, if you need to raise your score, pay off any credit cards, make all of your credit payments on time, and resolve any credit disputes or delinquencies. Once you have the report you can ask the necessary experts to quote on any essential repairs. 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. Effective 1 April 2018, by order of National Treasury, Value-Added Tax (VAT) will increase from 14% to 15%. 1. All in all, Rhys Dyer estimates 69 working days for your bond to go from ‘granted’ to ‘registered’, and attorneys will be on-hand to guide you every step of the way. Costs of buying property in South Africa. We are pleased to offer a range of property in South Africa. issues t… Estate agents generally act for the seller and the transferring attorneys / solicitors are nominated and instructed by the seller. These are classed as non-resident loans and are subject to foreign exchange approval from the South African Reserve Bank. This will also help prepare you to ask questions about things that might affect your decision. Download an Offer to Purchase contract and along with other documentation and submit this to the Seller. This is your opportunity to discover any latent defects in the property, and it’s important to be aware of what your rights are when it comes to this issue. It’s important to have a full understanding of what the agreement entails before signing it. In South Africa, the Western Cape province continues to outperform all other areas, with Cape Town remaining the most lucrative city in the country. There’s no harm in getting a second opinion if you’re not happy with the inspection report. Find property in South Africa with Rightmove.co.uk - the UK's number one property website. If you have identified your ideal neighbourhood and found a house or apartment that appeals, you’ve already done a lot of the legwork. 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. 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. Save for a mortgage deposit. 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). You’ll usually need to build up a deposit of at least 5% of the price of the property you want to buy. 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. 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. Rightmove.co.uk lists the very latest property in South Africa. Good schools are a drawcard for young families. You won’t inherit someone else's worn-out carpeting or have to look at some kid's initials scrawled into once-wet cement. Start with ooba home loans’ free, online prequalification tool, the ooba Bond Indicator. You’ll get a home that’s in line with the latest trends in design and construction, and it should be move-in ready. Different banks have different requirements for when people want to take out a bond for a house. Before signing the contract you should obtain advice from a solicitor, as well as any other expert you require (ie. Where are the shops, police and fire stations, medical centres, schools, and hospitals in relation to your new home? Talk about it. 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. If it’s at the top of the price range it might be hard to resell at a profit, but if it’s at the lower end you can only benefit when prices of other homes begin to increase in value. You’ll want to obtain this information before embarking on the home-buying process. Understanding the transfer of property process in South Africa This will be an invaluable guideline during your house hunt, and furthermore, the Bond Indicator will issue you with an ooba Bond Indicator Certificate that you can submit when applying for a home loan (more on that later). You can still get a home loan if the bank declined your initial application, as ooba home loans has been successful in securing home loan financing for almost two in every three applications that are initially turned down by a bank. Buying a home. Getting prequalified for a home loan is the logical thing to do before you even start looking to buy a new house in SA. The offer to purchase should include a requirement for a home inspection. Buying a house is a big financial commitment, and can be a lengthy exercise. 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). 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. If they’re unavailable for some reason, the estate agent may be able to assist you with that information. If you are looking for your dream property in South Africa, you have come to the right place! “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. To check your credit score, download a credit monitoring app. You’re likely receiving this property as a result of a loved one’s death, and the financial decisions that come with inheriting property can be stressful and confusing. Carefully choose your desired area by assessing convenience of location, checking crime statistics and talking to neighbours. Buying a house in South Africa: A step-by-step guide. Also bear in mind that the seller is legally obligated to disclose any known defects in the building. Furthermore, their services are free, as their commission is paid by the seller. 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. 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. Buying a house with cash will make you feel like a million bucks. 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. Sellers are liable for all latent defects in their property for three years after the defects have been discovered. They receive a fee from the bank. 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. Make an Offer to Purchase. Neighbours and store owners in the area will also be a good source of information. The conveyancing attorney receives the deed of sale and all the necessary documents required to register the transfer of the property. Follow these home-buying steps: 1. check credit, 2. set budget, 3. find agent, 4. get pre-approved, 5. shop, 6. make offer, 7. inspect, 8. finance, 9. insure, 10. close. For too long now, the process of buying and selling South African property and real estate has favoured one party: the seller. The steps to buying a house can be confusing and long: Buying a house isn't as simple as clicking a Buy Now button. Start with their Bond Calculator, then use the ooba Home Loans Bond Indicator to determine what you can afford. This is an agreement between you and the seller that stipulates the terms and conditions for the sale of the property. Once you’ve found a property, to buy a house in South Africa you’ll need to provide a 10% deposit straight away. Step 1: Document assembly. This is also to ensure there are no issues with the property that could later bite you (ie. In amongst that is the stress of getting in early to view the property and put in an offer before anybody else does. Study the documents you’ll have to sign in advance and make a list of questions you want to ask. Before you make an offer on a house, negotiate the selling price and other property specific factors, such as fixtures and dates. You can use an estate agent to make the search easier. This will provide you with your credit score, a summary of your affordability, and a realistic indication of your price ceiling. Now the part people generally enjoy most about the home-buying process, the house hunt itself. When you buy property in South Africa, you’ll typically pay a transfer duty plus a registration fee and conveyancing fee. Do your sums. Once you and the seller have come to an agreement, the next step is acquiring a home loan to fund your purchase. Through various calculations based on your transactional records, the credit bureau will provide your bank with a three-digit number ranging between 0 and 999. It does not legally bind the winning bidder to buy the property but reserves you the right to exchange contracts and complete on the property at the agreed price within 56 days of the bid being accepted. © 2021 ooba (Pty) Ltd. All rights reserved. Checklist for existing home owners. Of course, the first step is having a clear idea of what exactly those requirements are before embarking on a house hunt. Then, once you’ve found a home that meets your requirements, you can apply for a home loan. It’s worth the money to find any structural problems with the house that could cost you thousands to repair further down the line. Read about insurance in South Africa. Here is a home buyer’s guide that provides advice to help make the home-buying experience as … The less of a risk the bank determines you to be, the more favourable your interest rate. The buying process can be rather complicated and lengthy but here are some general guidelines to assist you every step of the way. The auction house will hold the reservation fee until contracts are exchanged. Banking on a budget. 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. a financial adviser). Understanding the costs. Buying a house is a big financial commitment, and can be a lengthy exercise. DIY with our online prequalification tool, or speak to an expert. 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”. The desired size of the home and whether a garden is a necessity. 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. You have decided to enter the property market for the first time - but what next? Bear in mind you will have to pay a transfer duty to the South African Revenue Services (SARS). 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. While it’s commonly assumed that estate agents work solely for sellers, they are in fact a great asset to house buyers too. Effective 1 April 2018, by order of National Treasury, Value-Added Tax (VAT) will increase from 14% to 15%. “While a deposit is not always required, try to put down 20% or more if you can, as the bank is more likely to offer you a better rate as the risk of the loan is reduced,” suggests Rhys Dyer. Like the estate agent, bond originators come at no cost to the buyer. This is because pre-contract is the best time for you and your solicitor to review the purchase, including: 1. Checking your credit score will help you determine your financing options; … Know what you are buying. Step 3 – Find a real estate agent. Please note that this increase will retroactively effect VAT-inclusive calculations in articles contained in our website. Buying a home Buying a house is more than just an investment, it is a place to call home and create memories that will last a lifetime. The process of buying and selling a house is expensive, so make sure you feel confident you’ll be in that area for the next five to seven years. For example, if an inspector says a foundation is cracked but it’s nothing to worry about, start worrying – and get a second opinion. Naturally, the higher the better, and a high credit score rating is one of the most valuable personal finance assets you can have. This prequalification is an indication of what you qualify for, based on what you input as your income and expenses, and your credit score. Another way to gain prequalification is to get yourself verified by an expert. Getting your bucks in a row. Begin the search. 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). With such an assorted wealth of resources in one sunny land, finding the right spot to buy property can be a daunting task. The seller will also receive a copy of the report, and it’s up to you whether to request that necessary repairs be made. 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 idea of buying a brand-new home can be tempting. Give some thought to: Once you have a clear idea of what you want, you can begin the house hunt. 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. For RE/MAX clients, buying property in South Africa is a simple, stress-free process, from the moment they see their … Carrying out investigations, including searches, into the property to ensure that it is appropriate for your needs. 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. Use our calculators to get an idea of how much you can borrow, and … How does your future home compare? But while it may seem daunting at first, it’s not like you’ll be wandering uncharted territory. Your credit score indicates to your bank whether your past debt repayment behaviour will make you a good risk or not. Get home buying tips delivered straight to your inbox. This is one of the reasons we recommend waiting at least a year after getting married to buy a house. For example, if you wanted to buy a house worth £200,000 with a 95% mortgage you would put down £10,000 of your own money, and borrow the remaining £190,000.. Work out what you can afford. 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. 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. Mortgages and home loans in South Africa Rules for home loans in South Africa may differ to those of your home country. Step 1 – Determine what you can afford. It’s a good idea to ask your estate agent for a copy of the documents you will be asked to sign if you decide to buy the property and read them ahead of time to make sure you understand what is expected of you. The entire process of buying a home can now be done remotely by both sellers and buyers. So you’ve got your offer to purchase and your home loan secured…what’s left to do after your bond is approved? Here’s what you will need to do to get yourself ready to take on the … Step 2 – Assess your credit record. © 2021 ooba (Pty) Ltd. All rights reserved. Are you close to a major road or highway? Make sure you have a good chance of getting bond approval before putting in an offer on a new house. Once it’s all done, time to move in and enjoy your new home. The first step is to ensure you know what you can afford, and the kind of home you wish to purchase. 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! Once you have your requirements in mind, you can begin the house hunt. DIY with our online prequalification tool, or speak to an expert. Ask the estate agent for a list of similar properties that have sold there in the past year. Once you’ve found your dream home, and got all your finances in order, you’re ready to sign an offer to purchase. 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. 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. Before a person begins the process of buying a house he or she will need to know what they can afford. Here is our six point plan to help make the home-buying experience as easy and problem free as possible. BUYING A HOUSE HAS NEVER BEEN EASIER. Please note that this increase will retroactively effect VAT-inclusive calculations in articles contained in our website. Once you have found your perfect home, confirm your choice by accessing detailed information through the Property Valuations Report. Get home buying tips delivered straight to your inbox. Finding the right real estate agent is key, so be sure to … Able to assist you with your credit score by the seller spoke to four big banks in South Africa a... Including all the necessary documents required to register the transfer of the property could. 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