Real Estate Investor Magazine South Africa July 2016 | Page 28

ACQUIRING

6

Practical
tips
that will save you money and stress when buying a home
BY DREW HOOK

Buying a new home is an exhilarating time, albeit time consuming and a little complex. It’s likely to be the largest financial transaction you
will make and there are many legally binding documents you will need to sign – after the excitement wears off you could find this a little
daunting. But with the right checks and balances in place, you should be well on your way to enjoying a brand new chapter in your life and
in your dream home.
Before you sign on the dotted line and say “I Do” to what could be a lifetime relationship with your home, consider these helpful tips to
make sure your home ownership journey is one of joy and not remorse:

1

Know what you can afford - Find out whether
you qualify for a home loan and if you do, what amount you
qualify for from your bank. Getting pre-qualified for a home
loan saves you time as you know what price range you need to be
shopping in and what deposit you’ll need to have available. Make
sure that you can afford the bond repayments plus the extra costs
such as rates and taxes, water and electricity, maintenance and the
homeowner’s buildings and life insurance cover which the bank will
require.

2

Cover yourself for unexpected extras–
Always ask about extra costs, for example if you have an
existing bond on a property you need to sell first, check with
your bank what the bond cancellation fees are. Find out from the
agent what the transfer duty, bond and registration fees will be.
Also, if you do need to sell before you can buy, make sure that
any offer to purchase is subject to that condition in writing on your
contract.

3

Research the area you want to buy in –

Ask your agent for a list of properties that have sold in the
area in the last year and compare price ranges. Is it marketrelated and what is the resale market like in the area? Contact
the local police station and ask about crime statistics – are these
acceptable to you? Check out the local amenities that are important
to you, such as schools, retail, healthcare and sports facilities. Speak
to the neighbours and get an idea of their experience in the area.
Check traffic flows and noise, including air traffic. Are there open
stands in the area which could be a hotspot for crime or property
developments?

4

Contracts must be in writing – make sure

all the conditions of the sale are set out in writing. Specify
your occupation date – the date you intend moving into the
house and whether occupational rent will be applicable, and if so, at
what rate. If no date is fixed, the seller can remain in the house until
the house has been registered into your name and the full purchase

26

JULY 2016 SA Real Estate Investor

price has been paid. In some cases there is very short notice on
the transfer date and can make planning very tricky. Agent’s
commission is negotiable and should be specified in the contract.

5

Check building plans for alterations –
That granny flat that you love and the extra entertainment
area may be deal clinchers for you, but have the alterations
got approved building plans? Check with the local municipality on
whether or not any alterations on the property you intend to buy
are approved. If you find out post purchase that the property has
illegal alterations, you will be liable to rectify these including the
costs of applying to the municipality for approval of the plans. But
if the structure does not conform to municipal regulations, you could
even be forced to demolish the structure, which not only will cost you
money, but reduce the value of the property that you paid for with
the alterations.

6

Protect yourself against historical
municipal debt - A recent Supreme Court of Appeal

(SCA) judgment means that property owners can be held
liable for historical municipal debts dating back up to 30 years. If
you are buying a property, make sure the seller pays absolutely
everything that is owed to the local authority and indemnifies
you against any undisclosed debt before taking transfer. The
SCA decision means that any debts owed to a local authority by
a property owner are not extinguished when a property is sold to
another owner. This means that a local authority can take legal
action against the current owner of any property for any municipal
debt incurred by any previous owner over the past 30 years with
respect to property rates, refuse and sanitation charges, and three
years in respect of electricity and water supply charges. Make sure
you enlist the help of your agent and attorneys to find out whether
there are historical municipal debts associated with the property
you want to buy before you make the offer.

RESOURCES
Hollard
www.reimag.co.za