Hero Image

Buying a property

Buying a property

Tips for buying and selling property in a slow market

The latest economic and property data points to a prolonged period of slow activity for the remainder of the year. But, while slower, there is still plenty of deals being done.
 
 
Advice to survive the slow market conditions:
 

Advice for buyers

Often a buyer ends up buying a property in an area that they weren’t originally considering. It is therefore important that you share all your requirements so that your agent can properly qualify your needs and give you a portfolio of options to choose from, and there is now plenty of opportunities.

Give feedback after the viewing as this will help in determining the best possible fit for you. There is no reason why you can’t find what you are looking for and a seller willing to negotiate right now.

Few sellers are achieving their full asking price, and the difference between what is actually being achieved versus expectations can vary greatly. Let the agent guide you because you might just find that your dream property is now within your reach.

Make your offer as enticing as possible, and make use of the agent to guide you. Have your ‘ducks in a row’ by ensuring you are pre-approved for home loan financing. If you need to sell your property and buy subject to that sale, have your property valued and either ready to market or already on the market as this will strengthen your offer.

Advice for sellers

Find an agent you trust and award them with a sole mandate. Levin says almost two-thirds of the branch’s sales over the last year were on the sole mandate, and in the current market this plays an important part in protecting the value of your asset.

In a challenging market, you want your agent to be an area expert, someone who is hyper-locally focused, and knows and understands the area intimately. With this knowledge, they can guide you with market conditions, sales in the area and buyer profiles. It is even likely that they already have buyers in mind while they are sitting there with you taking the mandate.

Price is a tough discussion, but probably one of the most important elements in the positioning and sale of your property, especially in a slow market. You need to measure what is actually selling, rather than looking at what other properties are listing for. In a market that continues to see increased stock levels, you need to consider what sets your property apart.

Be clear with your agent about when you need to sell by. This will determine many aspects of their marketing plan, pricing, and strategy for your property.

It is likely that you will receive an offer that is subject to a home loan, sale of another property, or both, along with other possible suspensive conditions. Your agent will advise you about continuing marketing within the ambit of the typical ‘72-hour clause’.

To expedite the transfer period, which is typically about three months, look to have your approved plans, title deeds, etc. in place to avoid any delays. Your agent should have a panel of attorneys that they work closely with and that can you assist you with this.

You Dream it. We'll get you there......

Top 5 considerations for buying a HOME!

 

 

When buying a home there are some must-haves that should not be overlooked. While each homebuyer will have their own criteria as to what their home must have based on their life stage and personal preference, there are a few key elements that homebuyers in the current market seem to agree on:

 

1. The right price

The first thing that the majority of homebuyers must have is an affordable price tag, especially first-time homebuyers because they often don’t have the equity from selling a property to roll into the next purchase. Although aspects such as space and the aesthetic appeal of the home are important, for the most part the financial elements and affordability are top priorities.

With house prices decreasing over the past few years, as well as the current low interest rates, properties that were previously unaffordable to many homebuyers are now within reach.

 

2. A home that meets future needs

Although it is impossible to know what the next ten years may hold, the reality is that many homebuyers will be in their home for longer than they think. It will pay off to purchase a home that doesn’t just meet the criteria now, but also in the next five to ten years. 

Property is a long term investment. A must-have now may not be one in a few years, so homebuyers should look at property and ask if they can see themselves staying there for a while and what the future looks like. Is marriage on the cards or perhaps children?  If so, then an extra bedroom would probably be of higher importance than granite countertops.

 

3. A prime location

It might be an old cliché but there is certainly a lot of truth to the location, location, location adage. This mantra rings true for homebuyers in any market; location will always be high on the must-have list. Whether it is a question of lifestyle or good return on investment, buying a property in the right location will be one of the most important decisions a buyer can make.

Vital aspects to consider when deciding on a location would be:

- Proximity to your place of work.
- A location convenient to local amenities such as medical facilities and shopping centres.
- A neighbourhood / estate or complex that is well-maintained and is aesthetically pleasing.
- Buyers with children or plans for a family should look at the quality of schools in the area.

 

Look for areas that have kerb appeal that are well maintained and where there are more owners than tenants, as owners will predominately want to protect their investment by keeping the area well looked after.

 

4. A house that has been properly maintained

Buying a house that has been properly maintained by the previous owner can help alleviate a large number of costs in the future. 

With the introduction of the Consumer Protection Act many buyers are insisting on the list of defects that the act prescribes, even though legally it may not be applicable. It is important for them to know that they are purchasing a property that is in good repair.

While a quick run through and spot check of the home can help buyers sift through their options and narrow down the property they would most like to purchase, it is best to have a professional inspector undertake a thorough check and advise accordingly. 

 

5. Contemporary updates in key areas

Kitchens and bathrooms are known to get sellers the best boost in value, with many sellers recouping as much as 80% of their renovation costs on a kitchen and between 65% and 75% of the costs of remodelling a full bathroom. 

These two areas of a home are the most important to buyers when looking at prospective houses. If they have been renovated or simply updated by the previous owner, it will have a big impact on the overall appeal of the home.

 

 

Given the vast options available to buyers in the current market, sellers should take these must-haves into consideration when wanting to successfully sell their property in the shortest possible time.

 

Snippets taken from an article on property24.com

Buying a house in South Africa: A step-by-step guide

The home-buying process may seem daunting at first, but the path is well signposted, and there are expert advisors who can help you along the way.

Article summary

  • The first step is to ensure you know what you can afford, and the kind of home you wish to purchase.
  • Once you have your requirements in mind, you can begin the house hunt. You can use an estate agent to make the search easier.
  • 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.

    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. But while it may seem daunting at first, it’s not like you’ll be wandering uncharted territory. The path is well signposted, and there are expert advisors who can help you along the way.

    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:

    Step 1 – Determine what you can afford

    Before you start your house search, you should have a very clear idea of what financing is available to you for the transaction. “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.

    A good starting point would be to use a bond affordability tool, such as ooba’s Bond Indicator, which is a free, online tool. This will provide you with your credit score, a summary of your affordability, and a realistic indication of your price ceiling.

    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). Another way to gain prequalification is to get yourself verified by an expert.

    Step 2 – Assess your credit record

    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. Your credit score indicates to your bank whether your past debt repayment behavior will make you a good risk or not. 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. Naturally, the higher the better, and a high credit score rating is one of the most valuable personal financial assets, you can have.

    The aforementioned Bond Indicator, as well as being able to determine your affordability, can also provide an estimate of your credit score. You’ll want to obtain this information before embarking on the home-buying process.

    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.

    Step 3 – Find a real estate agent

    While it’s commonly assumed that estate agents work solely for sellers, they are in fact a great asset to house buyers too. “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.

    Find an estate agent you can develop a good working relationship with (consider asking friends and relatives for recommendations). Their knowledge of the housing market and their ability to handle the paperwork and deal with sellers on your behalf will make for a much smoother process. Furthermore, their services are free, as their commission is paid by the seller.

    Step 4 – Find your ideal home

    Now the part people generally enjoy most about the home-buying process, the house hunt itself. 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.

    Of course, the first step is having a clear idea of what exactly those requirements are before embarking on a house hunt. Give some thought to:

  • Where you want to live.
  • Whether it’s important to be close to a school, medical facility, supermarket and shops, and other useful amenities.
  • The desired size of the home and whether a garden is a necessity.
  • Whether you want to live in a gated community.
  • Whether it’s important to be in a quiet neighborhood.

Once you have a clear idea of what you want, you can begin the house hunt. 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).

Step 5 – Sign an offer to purchase

Once you’ve found your dream home, and got all your finances in order, you’re ready to sign an offer to purchase. This is an agreement between you and the seller that stipulates the terms and conditions for the sale of the property.

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”. It’s important to have a full understanding of what the agreement entails before signing it. Also, bear in mind that the seller is legally obligated to disclose any known defects in the building.

Step 6 – Arrange a home inspection

The offer to purchase should include a requirement for a home inspection. 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. Sellers are liable for all latent defects in their property for three years after the defects have been discovered.

The seller will also receive a copy of the report, and it’s up to you whether to request that necessary repairs be made.

Step 7 – Apply for a home loan

Once you and the seller have come to an agreement, the next step is acquiring a home loan to fund your purchase. 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.

How to get the best interest rates on your home loan

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 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. Like the estate agent, bond originators come at no cost to the buyer. They receive a fee from the bank.

The less of a risk the bank determines you to be, the more favorable your interest rate. Factors that affect this include your credit record and the size of your deposit. “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.

Can you get a home loan without having to pay a deposit?

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.

What if your home loan application is rejected

If you initially fail to secure bond approval, don’t lose heart. You can still get a home loan if the bank declined your initial application, as ooba home loans have been successful in securing home loan financing for almost two in every three applications that are initially turned down by a bank.

Step 8 – Close the deal

So you’ve got your offer to purchase and your home loan secured…what’s left to do after your bond is approved? 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.

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. Bear in mind you will have to pay a transfer duty to the South African Revenue Services (SARS).

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. 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.

Once it’s all done, time to move in and enjoy your new home.

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. Start with ooba home loans’ free, online prequalification tool, the ooba Bond Indicator. Then, once you’ve found a home that meets your requirements, you can apply for a home loan.

taken from an article on ooba home loans

 

 

Should you buy a new or existing home? 5 questions to ask yourself

When it comes to looking for a new property, you may wonder whether you should opt for a new space or an older home. Making this decision isn’t that simple. That’s because it’s not solely a financial debate, but also about choice of lifestyle and an abundance of other factors.
 
 

Andrew Church, CEO of Rodel Finance, says much like dating, every pot has a lid. You can’t prescribe to people what they should be buying, as each person needs and desires something different.

“Some may like the minimalist and open-plan structure of a modern space, others may fall in love with the character and embellishments of older homes. In deciding what your perfect buy should look like, we take a look at vital questions you need to ask yourself before embarking on your purchase,” says Church

1. What geographical location suits you best?

Older homes are often situated in more established neighbourhoods with easier access to points of interest like local shops or schools.

New abodes are often built at the same time as the surrounding infrastructure. Although this isn’t always the case, neighbourhood amenities may not be well-developed and one would need to drive to various places.

2. How flexible are you with your moving date?

With an old home, the move-in date is often negotiable and is dependent on when the transfer process has been concluded. This is a great help if you have a moving deadline.

Moving into a new development has some flexibility, however, it mostly depends on whether or not the builders complete their schedule on time. Your move-in date could be delayed resulting in disappointment.

3. Can you afford to make changes in your home?

The old saying, ‘they don’t make them like they used to’ can be interpreted in two ways. Properties built within the last five to ten years will need minimal maintenance, while older homes, particularly a few decades old will need more.

“If you inspect the property thoroughly before buying, preferably with professional assistance, you should be able to roughly ascertain the probable future spend on the property,” says Church.

Newer homes usually have the advantage of built-in modern technology and fittings. Older homes usually have older fittings, so if you were to refurbish, but maintain your home’s current character, you’ll need to take into consideration that matching and replicating older building materials can be quite difficult and costly.

4. What type of neighbours do you want?

Older neighbourhoods tend to have residents ranging from renters, to young families to retirees.

Newer communities tend to attract a homogenous group of people - due to developers specific building plans and marketing strategy. They’ll usually build with a particular buyer in mind. Whether it’s urban professionals, starter homes or single family homes, they’ll build for this clientele. More than likely, these will be your neighbours.

5. Are you on a tight budget?

In the past, new apartments would typically cost more than older ones, but that’s not necessarily true across the board anymore. You can save a considerable amount of money by buying a brand new or off-plan property.

There won’t be any transfer duty on the property and VAT will be included in the price. Any transaction costs are settled by the developer. Initially there is only a 10% deposit and the rest of the payment is only due on completion. Furthermore, profits from off-plan properties can be free of capital gains tax if the property is sold before completion.

Finally

“Whatever decision you make, both new and old homes have their pros and cons. However, the more informed you are, the easier it is to avoid pitfalls and risks when buying your next home,” says Church.

harcourts blog View more updates

Must-knows for single women buying their first property

Data released by FNB’s Home Finance department indicates that more single women in South Africa are buying a property. The report compiled from 2016 to 2018 showed that home buyers have increased from 48% to 56%. Female buyers have grown from 22% to 27%, while male buyers remained on a slow and steady increase from 27% to 29%.
 

"It is important to cater to this market and ensure that while providing a real estate service, we also go above and beyond what is required of us and assist in putting them in touch with equally qualified service providers and assist them in making the overall process easier.” 

The data released by FNB’s Home Finance department can be seen as a direct reflection of trends occurring in developed countries today, he says. "Women are no longer waiting to reach the norms of what society expects from their lives, but are instead rewriting the narrative as the sole breadwinners or providers for their households – regardless of what the home dynamic is made up of.”

Some smart, useful tips for women looking to clinch that first property include:

1. Make sure you narrow down your property search to a safe neighbourhood within your realm of affordability

As a woman, you have several things to take care of. With bills to pay and things to do, there is a considerable saving to be had when you find a property that meets all of your needs - in addition to being in a safe neighbourhood.

For example, the City of Cape Town records a high crime rate each year - many of which are property-related crimes. During your search, make the conscious decision to choose a safe neighbourhood where you can successfully settle down.

Work out what you can afford here.
 

2. Ensure your property is secure

Having a property that is secure is paramount. There are various ways and means to ensure you reside in a home that is safe, and the knowledge thereof will be especially important to your general well-being.

Speaking to your agent about service providers in the security industry could be of great assistance to you. Agents generally have a vastly better understanding and knowledge of the areas they work in, and also, have a trusted network of contacts who could be of assistance to you.

3. Layout your options and be picky about your choice

The decision to buy your first property is truly something to be proud of. Having made this decision, unless you are restricted by a time frame, be sure to be choosy about your property and what you would like from it.

Making a decision out of haste could be to your detriment. Chances are the seller would be in greater need of your buy than you would be for the sale to take place. After all, statistics do indicate that we are seeing the general trend of a buyer’s market which would put less pressure on the prospective buyer while also giving them more options to choose from.

What to consider when buying fixer-upper property

A fixer-upper - generally defined as a property on the market in need of repairs and maintenance - often presents a good deal on price.
 

“Fixer-uppers are generally where you find the property bargains, and if you see past the problems and focus on the potential, it may just be your lucky day,”

There are a number of factors to consider when buying a fixer-upper:

1. Location, location, location

The holy grail when it comes to property, location is even more important when buying a fixer-upper.

“Go for a fixer-upper in a desirable, well-maintained area. In other words, opt for the worst property in the best area, rather than the best property in the worst area,” says Dos Reis Marques.

“You can do almost everything about improving a property but you can do almost nothing about the area in which it is located.”

Make sure the configuration of the property works for you. Renovation costs start skyrocketing when you change the layout of the property.

Removing a wall here or there to open the space up more or adding an enclosed patio to create a sense of indoor/outdoor living is also less involved than adding a bedroom or moving the kitchen from the front of the house to the back of the house, for example, she says.

2. Get your hands dirty

The appeal of a fixer-upper is typically that it needs some TLC, as opposed to a complete rebuild.

Dos Reis Marques says one of the easiest ways to manage the costs is to get involved yourself. If you’re so inclined, you could tackle things like the painting yourself, or recruit a builder or handyman who is willing to take on smaller jobs at a reasonable rate. Make sure to ask for references and commit to still managing the project yourself to ensure the desired outcome.

Once you’ve signed on the dotted line for the fixer-upper it can become very overwhelming to start turning the house into a home.

A good place to start is to draw up a list that distinguishes between the structural and foundational changes, and the cosmetic and nice-to-have changes, as this will make it easier to manage and to allocate your resources accordingly.

Dos Reis Marques says changes that fall into the ‘structural/foundational’ category include:

- Shoring up foundations.

- Fixing or replacing the roof.

- Remodelling the kitchen and bathroom.

- Replacing the windows throughout.

- Building new additions like bedrooms or a garage.

- Rewiring the property.

Cosmetic changes are usually things like:

- Patching walls and painting.

- Installing new light fixtures.

- Replacing doors.

- Re-facing kitchen cabinets.

- Fixing minor plumbing issues.

Don’t underestimate what a big difference even just a coat of paint can make to the interior and exterior of the property.

Money matters

Investing in a fixer-upper is all about recognising potential, but realising that potential is always going to cost money.

“The idea is that a fixer-upper is a bargain, so the theory goes that you’ll have money available to make the necessary changes, says Dos Reis Marques.“For most buyers cash is a problem so you could consider registering a bigger bond and accessing that capital to pay for the fixes.”

It is also useful to draw up a budget for how much you want to spend, where the goal is to plan it so that you get the most value for money, she advises. “Discussing your proposed plans with a trusted property advisor is one way to ensure that you don’t overcapitalise on the property, but that it would fetch a relative price on the market.”

Make sure the fixer-upper actually has potential, she says. “There’s a difference between fixing a property and spending the rest of your life and all your money on trying to make it a suitable home.”

But if you go into it with an open mind and a dynamic plan, it may be one of the best investment decisions you’ll ever make, she adds.