Buying a home may well be one of the biggest financial decisions you are likely to make in your lifetime.
This is according to Retha Schutte, Regional Executive for Pam Golding Properties (PGP) Pretoria, who says asking the right questions and partnering with an astute real estate agent is of key importance.
For your own benefit talk to a financial institution or to a reputable bond originator before embarking on your search for the perfect home.
“A letter of comfort from a financial institution, confirming that you have sufficient funds and are financially secure and able to complete the buy, will enable you to search for a home in the appropriate price category from the outset. It will also strengthen your hand when putting in an offer and negotiating the buying price,” advises Schutte.
Pre-approval is always considered in a favourable light during the negotiation process. It can also save a prospective new homeowner a great deal of time and unnecessary anguish. Schutte says it can be disheartening when looking at homes in a high-priced bracket only to find that you cannot obtain the necessary finance.
“So try and look in the right price bracket to suit your budget from the outset. Find an area that complements your lifestyle in terms of your place of work, suitable schools, universities and other conveniences such as transport, shopping and entertainment centres, highways and healthcare facilities.”
Should you have children of school going age or if you are planning a family, it is recommended that you find out enough in terms of school feeder areas before buying a home, she says. This will avoid future disappointment, particularly if you are hoping to secure a place for your children at a good government school that is close to your home.
Schutte says consider what you want to buy carefully, is it a starter home or are you looking for a long-term family home? – be sure to buy a property that will grow in value, so that you will realise return on your investment when you choose to move onto a new stage of life.
“Be careful not to buy the ‘fix-me-upper’ and then overcapitalise on a property or an area. Always ensure that you can recover the money that you have spent. The old adage of buying the cheapest house in a good street or area still represents good advice in today’s times.”
Retha Schutte gives six important pointers from to add to your checklist, before signing on the dotted line:
1. Additional costs
Look at hidden costs and keep a keen eye on what you will be paying for rates, taxes and levies. Always do your calculations upfront to ensure that you will be able to afford these additional expenses.
Be on the lookout for special levies in sectional title complexes. If such a levy was in place prior to you putting in your offer, it will be for the account of the existing owner. However, if a levy is put in place after you have taken transfer of the property, it will be for your account.
While on the subject of body corporates, it is once again important to do your homework. Is the body corporate healthy? What is the history in terms of levy increases and are these normal or extreme given the circumstances of the complex or estate you hope to be buying into?
Property transfer duties can make quite a dent in your savings, so be sure to budget for this additional expense. Also, put some money aside to fund three to four months’ worth of rates and taxes accounts upfront, as this is nowadays a standard practice.
2. Changes in the neighbourhood
Enquire about any changes that could devalue your property. If you have set your heart on a home and there are large open areas around it, ask questions about the zoning of the property and find out what the land is being earmarked for.
3. Approved plans
Ask about approved building plans and check that these match the current dwelling. It is becoming standard procedure for financial institutions to request updated plans in order to safeguard your and their investment.
Outside areas such as lapas and gazebos must also reflect on the building plans. If you cannot secure up-to-date, approved plans this problem will simply escalate with time, and you will have to resolve this at some time in the future.
4. Compliance and clearing certificates
Electrical compliance certificates are mandatory. If the home has an electrical fence, a separate certificate will be required for it. Should the home have gas installations, a gas compliance certificate is necessary. All these certificates must be obtained by the seller prior to registration.
Ask in advance about clearance certificates for electricity and water, as well as rates and taxes. Avoid going through the entire buying process without asking if these can be obtained.
Be on the lookout for obvious cracks, damp, termites and ants. Take a close look at the grass and at wooden window frames to ensure that you are not buying someone else’s problem.
Switch the swimming pool motor on and off, and ask if the swimming pool is leak-free, as these can be costly to repair. Check the pool cleaner to ensure that it too is in good working condition. It is imperative to check garage motors, automatic gates, intercoms, security and irrigation systems.
Do not hesitate to ask specific questions about the property and any problems that there may be. There is an obligation on the seller to advise the buyer of any known latent defects. These may not be visible to the buyer through normal inspection of the property.
The ‘voetstoots’ clause, which comes into effect when buying a property, effectively means that you buy the property as it stands. It is therefore wise to compile a checklist to go through with your agent and the owner. Remember that the onus is on you to carry out a reasonable inspection.
6. Night and day – is it still the property of your dreams?
It is advised that you visit the property at night as well as during the daytime to ensure that it is indeed all that you hoped it would be.
Once you have considered all these factors find yourself a real estate company with a credible track record, with whom you can partner in your search for the perfect home. It is vital that you work with an agent who is knowledgeable and well-informed about the area you wish to buy in.