Buying Your First Home? Here’s How to Simplify the Journey

Despite what many will have you believe, buying a home shouldn't feel like a daunting task, despite the complexities and legalities involved. With careful preparation and consideration of the journey ahead, you can streamline the property-buying experience.

This guide will provide you with a step-by-step approach to buying a property in South Africa, helping you navigate the process with confidence.

Preparing for your property purchase

Before embarking on your property-buying journey, it's crucial to assess your financial readiness.

The first thing you need to do is to determine your budget and affordability by evaluating your income, expenses, and savings. We suggest you do a lifestyle audit to see exactly where your money is going each month. 

Once you have done that, you can move on to the second step in your preparation - getting pre-qualified for a home loan. In addition to seeing what type of loan you might qualify for, you will also be able to pick up on any issues that might cause you not to be approved for a home loan.

Here is how you can get a better interest rate on your home loan

Additionally, research the property market and trends to understand the current pricing and demand in your desired location.

Save up for that deposit

If you qualify for a substantial or 100% home loan, it does not mean that you should take it - having a deposit ready will reduce the amount you need to borrow and thus reduce the monthly bond repayments you need to make. 

Use a bond calculator to determine what your monthly repayments would be with and without a deposit

Understanding your wants and needs

Define what you want in your home by understanding the difference between what you want (nice to have) and what you need. 

A fireplace might be a nice addition, but it is not a necessity, while a home close to good schools is a need. Take into consideration your lifestyle and future plans - there is no use in buying a studio apartment if you are planning on starting a family in the next five years.

Consider factors such as location, size, amenities, and future growth potential. Setting realistic expectations will help you narrow down your options and find a property that meets your criteria.

Here are 6 tips for finding your dream home in a competitive market

Using a real estate agent

One of the biggest myths in real estate is that buyers and sellers don't need a real estate agent to help them through the process - and while it is possible to do so, real estate agents do play a vital role in the process - and by using an agent, you might be able to save yourself time and money.

There are several reasons why using a real estate agent offers advantages:

• Market Knowledge: Real estate agents have in-depth knowledge of the local property market, including pricing trends, property values, and neighborhoods. They can provide valuable insights to help you make informed decisions.

• Access to Listings: Agents have access to a wide range of property listings, including those that may not be publicly available. This gives you more options to choose from and increases your chances of finding the right property.

• Negotiation Skills: Experienced agents are skilled negotiators who can help you get the best deal possible. They can negotiate on your behalf to secure a favourable price and terms with the seller.

• Legal Expertise: Real estate transactions involve complex legal processes and paperwork. Agents can guide you through these processes, ensuring that all legal requirements are met and protecting your interests.

• Time and Convenience: Searching for a property can be time-consuming and overwhelming. An agent can save you time by identifying suitable properties, scheduling viewings, and handling negotiations and paperwork on your behalf.

• Professional Network: Agents have a network of professionals, such as conveyancers, home inspectors, and bond originators, who can assist you throughout the buying process. This can streamline the process and ensure a smooth transaction.

• Guidance and Support: Buying a home is a significant financial and emotional investment. An agent can provide guidance and support, answering your questions and addressing any

If you are a seller considering going at it on your own, make sure you understand the dangers of selling your property privately.

How do you apply for a home loan?

1. All the documents you need

Here is a run-down of the documents you will need for a home loan application, and additional documents required if you are buying through a trust. We also take a look at self-employed individuals.

Documents you require for all applications:

• A copy of your ID document
• A copy of the offer to purchase containing both the seller's and the purchaser’s details
• Proof of income. You will need to provide a salary slip (not older than two months) or a letter from your employer with a breakdown of your salary and deductions. If you are self-employed, then you will need a letter from an accounting officer confirming your income, or a statement of your assets and liabilities
• Six months’ worth of bank statements

Employed buyer

• If you earn commission or overtime, provide the latest 6 months' statements. Statements should be verified and supplied by the bank - internet statements aren’t acceptable.
• Copy of your ID document.
• Copy of Marriage Certificate or ANC Contract (if applicable).
• Application form and consent document.
• Copy of the Purchase Agreement.

Self-employed buyer

• Proof of income: Letter of Drawings from an Accountant (for all applicants if applicable).
• Personal Assets & Liabilities Statement.
• The latest 2 years' Annual Financial Statements.
• Where Annual Financial Statements are older than 6 months to date, Current Management Accounts not older than 2 months signed by the applicant and accountant must be provided in addition to the Annual Financial Statements.
• Copy of Marriage Certificate or ANC Contract.
• Copy of Registration Documents or Trust Deed.
• Application form and Consent Document
• Copy of Purchase Agreement

Documents you require for a trust

• A copy of the Trust Deed
• A resolution by the trustees advising who may sign the home loan or pre-approval application and property purchasing documents

If you are a low-income earner, know that home ownership is not out of reach for you. Read our guide

Understanding the property sales agreement

In the world of property transactions, one crucial document serves as the cornerstone of the entire process—the property sales agreement. While it may seem intimidating at first, understanding its significance is essential for both buyers and sellers. 

Find out more about the ins and outs of the property sales agreement here 

How to avoid buyer's remorse

Research Your Areas

While you may have specific suburbs in mind, financial constraints might redirect your house-hunting efforts. To ensure you still get what you want within your budget, do thorough research in more affordable areas. Explore traffic routes during rush hours, assess local amenities, and consider proximity to friends, family, schools, and workplaces. A well-informed decision ensures that compromises are manageable and align with your long-term goals.

Consider Your Lifestyle

Your new home should complement your lifestyle. If you have pets, opt for pet-friendly spaces, while frequent travelers might prefer low-maintenance properties. Take your future needs into consideration as well, such as potential family expansion or job changes, to ensure the chosen property remains suitable in the long run.

This is why understanding your wants and needs is important before you buy a home.

Consult the Experts:

Before making an offer, enlist the expertise of builders, electricians, and plumbers to inspect the property. This diligence ensures confidence in the structure's integrity and services. Uncovering issues doesn't necessarily mean walking away, but it empowers you to negotiate effectively, after all, "Knowledge is power."

Adjusting to home ownership

1. Make sure you are properly insured 

Homeowners must understand that they need to be adequately insured for the replacement value of the building, not just the market value, plus all the contents, and they must specify valuable items.

No one wants to dwell on unpleasant events that may never happen, but the fact is that they can – and often do - occur, and being well-prepared for any eventuality is not only sensible; it affords you peace of mind, allowing you to get on with life with one less thing to worry about.

2. Don't ignore important maintenance

Whilst you should exercise restraint in purchasing non-essentials immediately, don’t neglect any problems that are likely to worsen over time and which could become very costly to repair. Cosmetic repairs can wait, but not issues like a leaking roof or blocked plumbing. Create a home maintenance checklist and include regular home maintenance tasks that you’d want to do on a monthly, quarterly, or annual basis. Doing so will extend the life of almost everything in your home, potentially saving you a lot of money over time.

3. Maintain an emergency fund for unexpected problems

As a homeowner, you can no longer call the landlord when there’s an issue, and you should be prepared to deal with unexpected problems when they arise. These can be expensive, and you can’t do without a geyser or working plumbin,g or live with a leaking roof.