Financial status
If you are looking to buy, you need to start with first things first. Finance. Although finance might seem like the most obvious area to consider, some people tend to overlook this still.
You need to know exactly what your financial and credit status is. With the institution of the new National Credit Act in South Africa, it has become increasingly difficult to purchase property. All debt and account items are taken into consideration ranging from clothing accounts to credit cards.
It is advisable to gather a cash amount prior to commencing this process. This should be used for the deposit and additional costs including bond registration and potential transfer costs. To have the cash at hand will greatly assist with a larger loan amount in your favour.
Contacting a reputable mortgage broker or originator is advisable. They will be able to give you mortgage advice based on the current South African property market. As a first-time buyer, they will also be able to assist by helping you choose the best mortgage plan to suit your situation. Your mortgage broker or originator will help you with your application, after which you'll receive a confirmation of the amount you can borrow in order for you to purchase your desired house of flat.
It is actually far easier to get a home loan for a property that you have already decided to buy than to get a mortgage loan when you're still undecided about the property.
This leaves you with two options; either find your ideal property first, or first get confirmation about your finances and know exactly how much you would be able to borrow to avoid any disappointment.
Property decisions
After you've established what your available budget is, you can begin the search for your ideal property. Keep location in mind as well as your requirements from the property including the amenities you want nearby. Future plans including whether or not you have a family, or plan to have a family, or if you are purchasing the property solely as an investment later to be sold again for a profit will of course influence your decision.
With the internet at your disposal you can conduct online searches on property portals. It is advisable to register with as many South African real estate agents as possible in the area where you wish to purchase property. They will be able to keep you up to date with any new properties that become available.
When you start looking at property, don't waste your time looking at properties that aren't within your budget. Keep your search to properties that fit the bill and include all your basic needs.
When you find the right property to buy, make an offer based on what you have seen during your search and on the information you have obtained from the information pack that should be available from the real estate agent. When your offer is accepted, the property should be taken off the market by the real estate agent or previous owner.
Legal aspects
You need to hire a solicitor to take care of all the legal aspects of buying a house. Also known as conveyancing, the lawyer will draw up all the relevant legal documents and agreements. In the situation where purchasing with a spouse of civil partner, there would be rights given to both parties in the event of a split automatically. Although this might seem rather unromantic at the time, it is always wise to make sure all the legal aspects are in order now rather than have legal issues should a break up happen in future.
After your offer has been accepted by the real estate agent or owner, your solicitor will act on your behalf and request the title of the deeds of the property.
During this time you may also require that a surveyor carry out a home-buyer's report. Although this is not legally required, it is advisable and worth the investment that a full structural survey be conducted in order for you to have more information and so that you are secured if a subsidence is found later. You would however be held liable to pay for your mortgage advisor to carry out their independent property valuation.
After the final property valuation and data backing of the purchasing process, the mortgage lender will be able to finally approve or decline the home loan. After your financing has been approved, you should send a copy of the property survey to your solicitor.
When all is checked and confirmed, the solicitor will finalise the contract of sale and confirm the details with your mortgage lender. You will then be required to pay the deposit to the lawyer which is kept until the final exchange of contracts with the seller's lawyer.
The mortgage lender and lawyer will ensure that the mortgage is available for the completion date and will prepare the property transfer deed, which will be signed by you and the seller, together with the seller's solicitor. Your mortgage lender will then transfer the money into your lawyer's account in order for the finances to be available for the completion date that has been agreed upon.
On completion day of your mortgage, your attorney will transfer the money to the seller's lawyer, whilst getting the transfer deed, Land Registry certificate and keys in return. The sale is now complete and you can move into your new home.
While you are making yourself comfortable in your new home, the solicitor will make arrangements for the transfer deed to be stamped, the stamp duty to be paid and the transfer deed to be sent to the South African Land Registry. This proves on record that you are the new property owner. The deed is transferred to your mortgage lender who will act as security for the loan you acquired and you will be sent a bill for your solicitor's cost and services rendered.
Author Bio:
PropertyGenie is a leading online estate agency offering South African property to first-time buyers, including new property developments, houses, flats, apartments, farms, vacant land and smallholdings for sale throughout South Africa.