We take a look at property buyers' most frequently asked questions
Category Property Advice
Buying a house should, and does, come with a lot of questions. From what to offer and how to respond when it's not accepted, to whether to not you should sell your current home before buying another, we have heard it all. Take a look at our FAQs for buying a house below.
1. How much can I afford?
Know your costs before you buy.
Ensure your budget is clear, concise, and realistic. Make sure you've accounted for all set expenses as well as the unexpected (medical, mechanical, and other emergencies) to ensure you know what you can comfortably cover.
Future-proof yourself, by leaving some wiggle room. You don't want your first house painting you into a financial corner. Cut your coat according to your cloth. And just because you qualify for an amount, doesn't mean you should jump into it without careful consideration of a potential change in circumstances.
We would highly recommend working with an experienced bond originator who can assist you with the process.
2. Which is the best area to invest in?
This depends on several factors, including the type of property you're looking for, what you want from the property in terms of returns and the amenities in the surrounding area. These are all questions that one of our trusted property advisors can advise on, but the Atlantic Seaboard, and the Southern Suburbs, offer fantastic investment opportunities for savvy buyers.
3. Is an offer to purchase legally binding?
Most definitely. This is a legal document and by signing it, the buyer agrees to the terms stipulated within, including the price they are willing to pay for the property. Once the seller agrees to the price offered by the buyer, it becomes a legally binding document.
4. How long is an electrical compliance certificate valid for?
This document is compulsory for a seller to have in their possession when selling their property as it guarantees the condition of the distribution boards, wiring, earthing, and bonding of all metal components. It is valid for two years.
5. What happens after the home loan is granted?
The bank will next appoint a bond attorney to draw up the necessary documents, while the seller will appoint a conveyancing attorney to take care of the transfer of the property into your name.
The former will charge fees for the registration of the bond, while the conveyancer will charge you for the transfer of the property.
The fees will be dependent on the cost of the property.
6. Who is responsible for the legal costs?
The purchaser is responsible for the transfer duties, transfer fees and the bond costs if registering a bond with a finance provider. The seller is responsible for paying the agent's commission as well as all clearance certificates for the property such as an Electrical Certificate of Compliance (ECOC).
7. Should I talk with a bank before looking at homes?
Absolutely. There are plenty of reasons why you should talk with a bank and arguable the most important is that it will help you understand exactly how much you can afford. Getting a pre-approved load will go a long way in helping you guage your budget, because there is no reason to look at homes that are listed for outside of what you can afford. Again, working with an experienced bond originator will assist you in getting the best rate possible and at no cost to you at all.
8. I own a home, should I buy another before selling my current home?
There is no simple answer to this question, but one benefit having another home lined up when you are selling can help reduce the stress of looking once you sell, it can also end badly if you can't sell your current property in time to ensure the purchase of your future home. This, of course, only matters if the purchase is contingent on the sale. Selling before you buy could lead to you being without a place to stay while you're looking, but all can be tricky, balancing acts. Best to have a trusted property advisor on hand to advise and ensure you get it right, no matter which way you go about it.
9. Who pays the Agent's commission fees when buying a home?
In most cases, the seller pays the agent's commission.
10. How is the neighbourhood/area?
Much like investment, this depends on several factors, including the type of property, what you want from it and the amenities in the surrounding area. Do you need schools nearby, are you wanting a lock-and-go? These are all questions that one of our trusted property advisors can advise on, but we would advise doing your own research before as well to ensure you get what is best for your needs.
11. How many homes should I look at before putting in an offer to purchase?
There is no hard and fast rule here. You may find the perfect home after one viewing, while it may take far longer than that. It is another reason to have a trusted property advisor with you when you're undertaking the journey, because whether it is the first, second or third viewing of a property, you want to make the correct decision.
12. How much should I offer the sellers?
You know what you can afford and it's up to you to decide on what to offer, but it's worth getting advice from your trusted property advisor, because they will know the market and can help suggest the best offer to put on the table.
13. How long does the seller have to respond to my offer?
There are several factors that can affect 'the life' of an offer and your advisor will be able to advise on how long to give the seller to respond.
14. What if my offer is rejected?
If your offer is rejected, meaning the seller says no and doesn't counter, you have the right to make another offer.
15. Does my credit score matter?
Yes! Banks will check your credit score in order to determine whether your loan will be approved and what interest rate they will charge you. Your credit score is determined by the Credit Bureau based on your financial history. The higher the score, the better your chances are of being approved. A score of 600 or more is considered to be good, while a 670+ is considered excellent. It's advisable that if your credit score is too low, take the time to improve it before applying again.
16. Do I need money for a deposit?
Yes, it is advisable. Many banks will not grant a home loan that covers 100% of the costs, particularly for first-time buyers. The higher your deposit, the less you will need to borrow from the bank, and the less you will need to pay bank in monthly instalments. This could also mean you qualify for a lower interest rate. Some banks will offer 100% loans, which means no deposit is needed, but monthly payments will then be higher.
17. Are there other costs I need to consider?
Yes. Once your bond has been approved, that's not the end of the process or the costs you will incur. The fees will be dependent on the cost of the property.
As per question 5, you will be responsible for the transfer costs.
If the property is valued at more than R1 000 000, you will also need to pay a transfer duty to SARS.
You can use The Agency Property Group's Transfer Cost Calculator to determine what the bond registration and transfer fees will likely be.
Your new home will also need upkeep and perhaps some renovations. A bigger home means more costs on the horizon, while an older home could be a fixer-upper that never quite gets fixed.
Do you have more questions? Get in touch with us today.
Author: The Agency Property Group
