Real Estate Investor Magazine South Africa December / Jan 2016 | Page 34

ACQUIRING

Property Ownership

The Many Pitfalls of first time Property Buying
BY MEYER DE WAAL

W

hen Angile [real name withheld] recently
bought her first property, she encountered
a number of pitfalls that very few property
buyers are prepared for.
The estate agent put her under significant pressure to
submit an offer, saying there were many other potential
buyers waiting to submit offers on the property. Angile
liked the particular area, so even though she had visited
the property only once, and had only verbal information
provided by the estate agent and a one page flyer with
a picture and a few sketchy details about the property,
Angile signed up for the biggest debt she had ever
incurred in her life – a debt that will most likely take
her 20 years to repay.
But this was just the beginning... Although Angile
was able to put down a reasonable deposit, she still
struggled to raise a home loan. So, when the bank
finally approved her home loan, she gladly accepted the
home loan offer with an interest rate 2% higher than
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DEC/JAN 2016 SA Real Estate Investor

the prime lending rate. Little did Angile know that this
extra 2% on her interest rate means that she would pay
almost 32% more for the property she had just bought.
Would Angile accepted a home loan that resulted in
her overpaying 32% for a property if she had access to
a comparative market analysis (CMA) and time to do
proper research? Even a novice would not have done
so, but Angile was so battered and worn down by the
purchase process and home loan application, that she
put in an offer and accepted the home loan offered by
the bank, without understanding the real consequences.
But Angile’s struggle was not yet over... As most
buyers do, Ang [H\