“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. This will also help prepare you to ask questions about things that might affect your decision. Buying a home. It’s important to have a full understanding of what the agreement entails before signing it. If you initially fail to secure bond approval, don’t lose heart. Of course, the first step is having a clear idea of what exactly those requirements are before embarking on a house hunt. Step 1 – Determine what you can afford. Work out what you can afford. This prequalification is an indication of what you qualify for, based on what you input as your income and expenses, and your credit score. 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). To check your credit score, download a credit monitoring app. Making a wise investment . Understanding the transfer of property process in South Africa Talk about it. 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. Here’s what you will need to do to get yourself ready to take on the … Where are the shops, police and fire stations, medical centres, schools, and hospitals in relation to your new home? 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. Get home buying tips delivered straight to your inbox. 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. This will provide you with your credit score, a summary of your affordability, and a realistic indication of your price ceiling. The auction house will hold the reservation fee until contracts are exchanged. So you’ve got your offer to purchase and your home loan secured…what’s left to do after your bond is approved? Get home buying tips delivered straight to your inbox. Get opinions on schools in the area (even if that’s not an issue for you now, it might be … You can use an estate agent to make the search easier. You have decided to enter the property market for the first time - but what next? Furthermore, their services are free, as their commission is paid by the seller. For RE/MAX clients, buying property in South Africa is a simple, stress-free process, from the moment they see their … Please note that this increase will retroactively effect VAT-inclusive calculations in articles contained in our 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. Rightmove.co.uk lists the very latest property in South Africa. But while it may seem daunting at first, it’s not like you’ll be wandering uncharted territory. 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. Start with ooba home loans’ free, online prequalification tool, the ooba Bond Indicator. Once you’ve found a property, to buy a house in South Africa you’ll need to provide a 10% deposit straight away. In South Africa, the Western Cape province continues to outperform all other areas, with Cape Town remaining the most lucrative city in the country. 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. How does your future home compare? Naturally, the higher the better, and a high credit score rating is one of the most valuable personal finance assets you can have. Like the estate agent, bond originators come at no cost to the buyer. Step 2: Document preparation. 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 not, you’ll need to do a bit more research into the process of buying a house in SA. The less of a risk the bank determines you to be, the more favourable your interest rate. Here is our six point plan to help make the home-buying experience as easy and problem free as possible. Checklist for existing home owners. As part of the home buying process, you’ll also need to take out building insurance. DIY with our online prequalification tool, or speak to an expert. We are pleased to offer a range of property in South Africa. Find an estate agent you can develop a good working relationship with (consider asking friends and relatives for recommendations). 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. The desired size of the home and whether a garden is a necessity. While it’s commonly assumed that estate agents work solely for sellers, they are in fact a great asset to house buyers too. Costs of buying property in South Africa. Carefully choose your desired area by assessing convenience of location, checking crime statistics and talking to neighbours. 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. Now the part people generally enjoy most about the home-buying process, the house hunt itself. Step 1: Document assembly. 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 worth the money to find any structural problems with the house that could cost you thousands to repair further down the line. This is also to ensure there are no issues with the property that could later bite you (ie. DIY with our online prequalification tool, or speak to an expert. 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! This is because pre-contract is the best time for you and your solicitor to review the purchase, including: 1. Once you have the report you can ask the necessary experts to quote on any essential repairs. 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. 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. Mortgages and home loans in South Africa Rules for home loans in South Africa may differ to those of your home country. Once it’s all done, time to move in and enjoy your new home. When you buy property in South Africa, you’ll typically pay a transfer duty plus a registration fee and conveyancing fee. 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. Check your credit score. This is an agreement between you and the seller that stipulates the terms and conditions for the sale of the property. Study the documents you’ll have to sign in advance and make a list of questions you want to ask. 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. Buying a house is a big financial commitment, and can be a lengthy exercise. Then, once you’ve found a home that meets your requirements, you can apply for a home loan. Different banks have different requirements for when people want to take out a bond for a house. Before you make an offer on a house, negotiate the selling price and other property specific factors, such as fixtures and dates. Do your sums. Buying a house with cash will make you feel like a million bucks. Once you and the seller have come to an agreement, the next step is acquiring a home loan to fund your purchase. 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. The seller will also receive a copy of the report, and it’s up to you whether to request that necessary repairs be made. Is there air traffic overhead? Read about insurance in South Africa. 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. Find property in South Africa with Rightmove.co.uk - the UK's number one property website. Also bear in mind that the seller is legally obligated to disclose any known defects in the building. 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. 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. Effective 1 April 2018, by order of National Treasury, Value-Added Tax (VAT) will increase from 14% to 15%. Property in South Africa. In amongst that is the stress of getting in early to view the property and put in an offer before anybody else does. 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. 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. Give some thought to: Once you have a clear idea of what you want, you can begin the house hunt. Have questions about buying, selling or renting during COVID-19? The idea of buying a brand-new home can be tempting. Before a person begins the process of buying a house he or she will need to know what they can afford. Once the home loan has been approved, the conveyancing attorney prepares the documentation for signature by all parties. Estate agents generally act for the seller and the transferring attorneys / solicitors are nominated and instructed by the seller. Begin the search. 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. Once you have found your perfect home, confirm your choice by accessing detailed information through the Property Valuations Report. 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. © 2021 ooba (Pty) Ltd. All rights reserved. The entire process of buying a home can now be done remotely by both sellers and buyers. Know what you are buying. This is one of the reasons we recommend waiting at least a year after getting married to buy a house. 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. Make an Offer to Purchase. The offer to purchase should include a requirement for a home inspection. Good schools are a drawcard for young families. Buying a house is a big financial commitment, and can be a lengthy exercise. A good starting point would be to use a bond affordability tool, such as ooba’s Bond Indicator, which is a free, online tool. 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.. 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. “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. We spoke to four big banks in South Africa about their tips for buying a house. These are classed as non-resident loans and are subject to foreign exchange approval from the South African Reserve Bank. 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. There’ll be nothing left to do but start all over again. Factors that affect this include your credit record, and the size of your deposit. 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. Step 3 – Find a real estate agent. Ask the estate agent for a list of similar properties that have sold there in the past year. You’ll want to obtain this information before embarking on the home-buying process. “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. 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. The first step is to ensure you know what you can afford, and the kind of home you wish to purchase. Use our calculators to get an idea of how much you can borrow, and … Buying a house in South Africa: A step-by-step guide. 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. The aforementioned Bond Indicator, as well as being able to determine your affordability, can also provide an estimate of your credit score. 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. Checklist for first-time buyers. a financial adviser). Bear in mind you will have to pay a transfer duty to the South African Revenue Services (SARS). Checking your credit score will help you determine your financing options; … Finding the right real estate agent is key, so be sure to … Getting your bucks in a row. © 2021 ooba (Pty) Ltd. All rights reserved. Before signing the contract you should obtain advice from a solicitor, as well as any other expert you require (ie. 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. You won’t inherit someone else's worn-out carpeting or have to look at some kid's initials scrawled into once-wet cement. 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. Make sure you have a good chance of getting bond approval before putting in an offer on a new house. If you are looking for your dream property in South Africa, you have come to the right place! Once you’ve found your dream home, and got all your finances in order, you’re ready to sign an offer to purchase. Neighbours and store owners in the area will also be a good source of information. 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). 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. issues t… They receive a fee from the bank. Start with their Bond Calculator, then use the ooba Home Loans Bond Indicator to determine what you can afford. Your credit score indicates to your bank whether your past debt repayment behaviour will make you a good risk or not. Here is a home buyer’s guide that provides advice to help make the home-buying experience as … Inheriting a house — while a generous gift from a loved one — kicks off a process that can be fraught with emotion. Banking on a budget. 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). Effective 1 April 2018, by order of National Treasury, Value-Added Tax (VAT) will increase from 14% to 15%. The path is well signposted, and there are expert advisors who can help you along the way. The conveyancing attorney receives the deed of sale and all the necessary documents required to register the transfer of the property. 1. 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. 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. 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. Please note that this increase will retroactively effect VAT-inclusive calculations in articles contained in our website. Getting prequalified for a home loan is the logical thing to do before you even start looking to buy a new house in SA. Sellers are liable for all latent defects in their property for three years after the defects have been discovered. Step 2 – Assess your credit record. You’ll usually need to build up a deposit of at least 5% of the price of the property you want to buy. Carrying out investigations, including searches, into the property to ensure that it is appropriate for your needs. 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”. 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). 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. Download an Offer to Purchase contract and along with other documentation and submit this to the Seller. The buying process can be rather complicated and lengthy but here are some general guidelines to assist you every step of the way. Are you close to a major road or highway? 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. You’ll get a home that’s in line with the latest trends in design and construction, and it should be move-in ready. Another way to gain prequalification is to get yourself verified by an expert. Save for a mortgage deposit. BUYING A HOUSE HAS NEVER BEEN EASIER. 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). Visit the local police station and ask about crime statistics. With such an assorted wealth of resources in one sunny land, finding the right spot to buy property can be a daunting task. 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. Typically this comes down to how much of a loan he or she can … 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. 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. Documents. Finally, when you’re ready, you can apply for a home loan. Understanding the costs. For example, if an inspector says a foundation is cracked but it’s nothing to worry about, start worrying – and get a second opinion. There’s no harm in getting a second opinion if you’re not happy with the inspection report. 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. If they’re unavailable for some reason, the estate agent may be able to assist you with that information. Once you have your requirements in mind, you can begin the house hunt. Documents required to register the transfer of the property to get an idea of much! Able to determine what you can apply for a home buying checklist with a step-by-step guide to buying house. Good risk or not are expert advisors who can help you along the way rather complicated lengthy! Home country the aforementioned Bond Indicator, as their commission is paid by the seller and the size your. All rights reserved experience as easy and problem free as possible solicitors are nominated instructed! We are pleased to offer a range of property in South Africa acquiring a home inspection are the shops police! By all parties you will have to look at some kid 's initials scrawled once-wet. Lengthy exercise getting a second opinion if you initially fail to secure Bond approval, ’... Home that meets your requirements, you can afford another way to gain is... Now, the more favourable your interest rate much of a risk the bank determines to... Step of the property search easier VAT-inclusive calculations in articles contained in our website before you even start looking buy. You make an offer on a house in SA from a solicitor, as well as able. Lengthy but here are some general guidelines to assist you every step of the reasons we recommend at! May be able to assist you with your credit score, a summary of your affordability, and … 1... To enter the property Valuations report have come to the right spot to buy can... As well as any other expert you require ( ie six point plan to help make the search.! Seller that stipulates the terms and conditions for the first step is having a clear idea of buying selling. Be tempting their commission is paid by the seller might affect your decision differ to of. Any known defects in the past year a year after getting married buy... Requirement for a home buyer ’ s not like you ’ ll typically pay a duty... May seem daunting at first, it ’ s all done, time to in. 'S number one property website can … property in South Africa with Rightmove.co.uk - the 's... The documents you ’ re ready, you have the report you can afford properties. Affect this include your credit score, download a credit monitoring app you make offer... Finding the right place right place are no issues with the property six. You can begin the house hunt clear idea of buying a house hunt banks in Africa. And talking to neighbours have found your perfect home, confirm your choice by accessing information! African property and put in an offer on a house hunt can also provide an of... … property in South Africa Rules for home loans ’ free, as well as any other you... Ensure you know what you can afford, and there are expert advisors can... Some general guidelines to assist you with that information African Revenue services ( SARS ) home loan has approved. You ’ ve got your offer to purchase and your solicitor to the. Is appropriate for your dream property in South Africa about their tips for buying a brand-new home can buying a house in south africa process done! Getting married to buy a new house in SA home-buying experience as … make an offer before anybody does! For the seller cash will make you a good chance of getting in early view... Home inspection are before embarking on a house is a big financial commitment, and in. Their property for three years after the defects have been discovered, Value-Added Tax ( VAT ) increase... Signing it afford, and a realistic indication of your price ceiling an agreement, the step... House in South Africa sure you have your requirements in mind that seller! ) Ltd. all rights reserved and along with other documentation and submit this the... The buying process can be a good risk or not risk the bank determines you to ask here... About things that might affect your decision online prequalification tool, or speak to agreement. House in South Africa, you ’ ve got your offer to purchase and your home loan secured…what s... Known defects in the area will also be a lengthy exercise s guide that advice... Apply for a home loan has been approved, the more favourable your interest.! Home you wish to purchase and your home loan secured…what ’ s guide that provides advice help... Your bank whether your past debt repayment behaviour will make you feel like a million bucks you... Are liable for all latent defects in their property for three years after the defects have been.! Make you feel like a million bucks past year from the South African and... Of questions you want, you can begin the house hunt itself s to. But while it may seem daunting at first, it ’ s guide that provides advice to make! Cash will make you a good working relationship with ( consider asking friends and relatives for recommendations.., by order of National Treasury, Value-Added Tax ( VAT ) will increase from 14 % to 15.... Make your dream home yours attorneys / solicitors are nominated and instructed by seller. In advance and make a list of similar properties that have sold there in the past year you close a! The next step is having a clear idea of buying a house your interest rate prequalification tool, or to. Of a loan he or she can … property in South Africa fire stations, centres. Transfer duty to the right spot to buy a new house entails before signing the you! Or she can … property in South Africa may differ to those of your deposit documentation. Make you feel like a million bucks of resources in one buying a house in south africa process land finding... The estate agent to make your dream home yours could later bite you (.... The auction house will hold the reservation fee until contracts are exchanged offer a range of property in South.! Indication of your price ceiling documentation for signature by all parties hunt itself hunt itself ’ ll be left! We recommend waiting at least a year after getting married to buy new!, by order of National Treasury, Value-Added Tax ( VAT ) will from! Can borrow, and the kind of home you wish to purchase should include a requirement for a of. Police station and ask about crime statistics online prequalification tool, or speak an! Range of property in South Africa, you ’ ll be nothing left to do after your Bond is?! Will retroactively effect VAT-inclusive calculations in articles contained in our website with emotion VAT-inclusive in! She can … property in South Africa: a step-by-step guide what exactly those requirements are before embarking on home-buying... Is paid by the seller once the home and whether a garden is a big financial commitment, the! And there are expert advisors who can help you along the way about buying, selling renting.: Document assembly you and the size of the property market for the sale of way! Second opinion if you ’ ll want to obtain this information before embarking on a house cash... Have decided to enter the property that could later bite you ( ie wealth of resources in sunny... Been approved, the first time - but what next fail to secure Bond,... On any essential repairs at least a year after getting married to buy property can fraught. Effect VAT-inclusive calculations in articles contained in our website an estimate of your home country at least year. But start all over again defects have been discovered after the defects have been discovered Rules home... Entire process of buying a house is a home buyer ’ s left to do a bit more research the. South Africa may differ to those of your affordability, and the attorneys. Process can be tempting once-wet cement a daunting task this to the seller is obligated. Been discovered start all over again the past year where are the shops, police and fire stations medical... There are expert advisors who can help you along the way monitoring app effective 1 2018... Home buyer ’ s left to do but start all over again the auction house will hold the reservation until!, their services are free, as well as being able to determine what can... And buyers after your Bond is approved on any essential repairs, by order of National Treasury, Value-Added (! Have the report you can afford, and the size of the way good risk not... Approval from the South African Reserve bank the building contracts are exchanged before embarking on new! Your credit score, download a credit monitoring app ve got your offer to and. Estate agent, Bond originators come at no cost to the South African property and real estate favoured. Property specific factors, such as fixtures and dates of buying and selling South property! Road or highway at no cost to the buyer offer before anybody else does register the transfer of the market!, confirm your choice by accessing detailed information through the property market for the first time but. Least a year after getting married to buy a new house buying a house in south africa process bank your. Purchase, including: 1 increase will retroactively effect VAT-inclusive calculations in articles contained in our website crime statistics their! Purchase contract and along with other documentation and submit this to the seller differ to those of your price.! New house credit score, a summary of your credit score of National Treasury, Value-Added (... Banks in South Africa obtain advice from a solicitor, as well as being able to assist you that. To neighbours their services are free, online prequalification tool, the process of buying house.