If you’ve just decided to buy your first home, you’ll need guidance through this exciting venture. CLAIRE RENCKEN investigates.
Purchasing a new home is one of the biggest financial investments you’ll ever make, and no doubt you’ll have many questions regarding the process. Figures state that over 90 percent of first-time home shoppers start their property search online. National property websites like Private Property offer the widest selection of property all hosted in one place.
The top real estate agents, banks, property developers, lawyers and homeowners all list their properties on portals, so this is a great place to start. It is really important that you get as much information about the area and the properties that are available in your price range before you make your move.
Property websites have useful resources like photographs, floorplans, virtual tours, detailed descriptions and property trends for you to use and even though they don’t provide information about accessibility, you can get a very good idea from the pictures. Portals also allow you to set up electronic alerts, which will be sent directly to you advising you of properties that match your needs.
Prior to house hunting, you also need to consider your individual housing needs, as well as those of your family – or future family! Is the home centrally located, or at least within manageable distance of work, grocery stores, doctors, schools and pharmacies? Most importantly, is the area relatively safe and secure?
Once you have done your research and are ready to look at the property, arrange a viewing. It’s a good idea to let the agent know in advance that you have a physical impairment, to avoid an unnecessary waste of time. You should go prepared, take a camera and maybe even a tape measure with you. The camera will help you to remember details about the property later and the tape measure will allow you to judge whether your furniture will fit. Try to arrive early for a viewing so that you have time to explore the neighbourhood, chat to locals and identify any potential issues.
Also important to bear in mind are the costs and fees associated with purchasing your new home. You will be required to pay the transfer fees to the lawyer, and a transfer duty that is a tax on the sale of the property that goes to the government. Getting a loan for the total purchase price of the home is rare, so you will have to factor in your deposit on the home, and you’ll also have to consider moving costs, home-owners’ insurance, electrical and water connection fees and rates on your property.
Banks and bond originators offer some pointers for first-time home-buyers and it is advisable to get yourself “pre-approved” by one of the larger originators, such as Betterbond or Ooba. Before you set your sights on buying the home of your dreams, it is important to establish whether you are ready to make such a big, ongoing financial commitment.
Once you have found the property that your heart is set on, the next step would be to make an offer. This is a normal process and you should not be concerned about insisting that the agent submit an offer, even if it is lower than the asking price. Most homes sold in South Africa sell below their listed price.
Once you’ve decided on how much to offer, you need to formalise it with an offer to purchase (OTP). The OTP is a valid contract relating to the sale of the property. It contains all the terms and conditions of the property transaction. An OTP, once signed by buyer and seller, constitutes a deed of sale.
Because the OTP is a legally binding document, once signed, it is advisable to get an attorney to go through the document with you and explain anything that you are unclear about. Most conveyancing attorneys will be very happy to help you with the offer to purchase and hold your hand through the process if they are the nominated conveyancer to transfer the property.
Once the seller has accepted your offer, you will need to approach a bank or mortgage originator to apply for a bond, if you have not already gone through this process beforehand.
Koenraad Burger of SARS explains that although there is no tax rebate for people with disabilities when they purchase a home, there is a tax rebate available should they decide to do modifications to their home in order to make it more accessible.
Justin Clarke, the executive chairman and founder of Private Property, who is also a paraplegic, offers the following advice: “To put it simply, renting a home seems to make sense in the short term, but over time rentals will increase at a rate above inflation. So you pay a lot more over time and have no security. The landlord may decide to sell or not renew your lease for any reason and it is difficult to convert the house to meet your special needs.
“If you own your own home, on the other hand, you will enjoy fixed payments (subject to interest rate fluctuations) and the value of your investment over time will beat inflation. Not only is it a great investment and a forced saving, but you can modify the house to meet your special needs. Being able to knock out walls, modify bathrooms, build ramps and even add a lift will increase your quality of life and you will be able to claim back the costs from your taxes. You are also providing yourself and your family with security for days when you are not able to earn an income.”