Buying a home can be a scary process, but Annemarie Swanepoel attorneys’ simple guide to the steps of buying a house in South Africa will help you fully understand the whole process start-to-finish.
Baby steps to homeownership
Firstly, it’s important you make sure this is the right decision for you. Property ownership is often held up as the pinnacle of adult life, but renting can be a great fit too, depending on your circumstances. Home ownership can be a long [and slightly scary] process, but with the right knowledge, it will be considerably easier.
Once you’ve decided homeownership is for you, it’s time to get your financial ducks in a row. This includes some active maintenance like checking your credit report for errors, clearing as many debts as possible to improve your score and make you look favourable, and properly assessing your budget and affordability. All these seemingly tiny issues can cause a mortgage application to be rejected, so the more you can eliminate before you start the better. When determining your affordability, remember that your mortgage payment should be around 20-30-% of your overall budget, no higher. Remember to account for ‘hidden’ costs like transfer fees and other once-off fees as well as ownership costs like the water and lights, repairs and rates so you have a realistic picture of where you stand.
Finding the home should be the middle of the process
Only now is it time for the fun stuff! Now you know what you can afford, you’re free to go shopping for that dream property. Don’t let awesome presentation or a nice look bluff you though- take into account things like possible structural and electrical faults, plumbing issues and other sudden costs that may squash your joy if you seal the deal.
Once your dream match is spotted, it’s time to get to the nitty-gritty. Learn more about the sales process such as the offer to purchase and sales agreement, transfer process and other critical steps to getting the finance, and be confident you can avoid common mistakes made in the closing processes. Avoid getting trapped in a bidding war or over-capitalising [paying wildly above the worth of the area] and keep a cool head throughout, and that home will soon be yours. Don’t allow yourself to be too disheartened if there are snags in the process, and you may soon find yourself taking possession of those keys!
If you have any further questions about the long road to home ownership in South Africa, please feel free to get in touch with the team at Annemarie Swanepoel Attorneys- we’re always happy to help!