Buying a house this year

[Priapus]

So my partner and I have decided to buy a house this year when we get back to SA. Naturally I wanted her to also be on the bond, however it seems we need a 25% deposit for that as she is not a South African citizen.

So, I have a few questions I was hoping some of you folks who have bought / own houses / in the know, before could answer for me.

1. How long does the buying process normally take once you have the OTP and submit for a bond?

I know it varies from case to case - but there must be some sort of average?

2. From an investment point of view - would a townhouse in a complex make more sense than a freestanding house not in a complex?
3. I assume its better to aproceh the banks directly and shop around for the best interest rates?
4. Does anyone have any experience in dealing with SA Home Loans?
5. Is it possible to add my partner to the title deed of the house at a later stage so its in both of our names? Is this an expensive thing to do?

Appreciate the help and any feedback / advice that a first time home buyer should know!

 

[HarryPotgieter]

1. How long does the buying process normally take once you have the OTP and submit for a bond?

Bond approval can take hours. Actually getting the Bond in place and moving it minimum of a month I would say. Im building and it took me 3-4 because of plans. But there is a lot of **** with the lawyers etc

2. From an investment point of view - would a townhouse in a complex make more sense than a freestanding house not in a complex?

Complex makes more sense for resale but depends completely on the two you are comparing and where they are. Its easier to sell a stock standard BMW than a modified version as not everyone would want some or all of the mods.

3. I assume its better to aproceh the banks directly and shop around for the best interest rates?

I would rather use a mortgage broker since its one application and they get you the best deal.

4. Does anyone have any experience in dealing with SA Home Loans?

If this is the SA home loans im thinking of (lender not broker) I wouldnt touch that sort of establishment. You can get wreckt on the rates and just the general package.

5. Is it possible to add my partner to the title deed of the house at a later stage so its in both of our names? Is this an expensive thing to do?

No clue havent tried that sorry

 

[Priapus]

Bond approval can take hours. Actually getting the Bond in place and moving it minimum of a month I would say. Im building and it took me 3-4 because of plans. But there is a lot of **** with the lawyers etc

Complex makes more sense for resale but depends completely on the two you are comparing and where they are. Its easier to sell a stock standard BMW than a modified version as not everyone would want some or all of the mods.

I would rather use a mortgage broker since its one application and they get you the best deal.

If this is the SA home loans im thinking of (lender not broker) I wouldnt touch that sort of establishment. You can get wreckt on the rates and just the general package.

No clue havent tried that sorry

Thanks for the response.

So, once the bond has been approved I assume we could be in the new place within a month or two then?

As for a mortgage broker, it sounds like the better route as it would be one application. Do you have any recommendations?

 

[SlinkyMike]

Not sure if you've been following the economic situation but the is a possibility that putting off your purchase for this year could result in a more favourable climate for buyers.

Lots of if/but/could there but there has been rumour of the property prices heading for a downturn.

 

[Priapus]

Not sure if you've been following the economic situation but the is a possibility that putting off your purchase for this year could result in a more favourable climate for buyers.

Lots of if/but/could there but there has been rumour of the property prices heading for a downturn.

I've heard that property prices could slide over the next 12 months. As you say though, a lot of if's and but's there. We've already found a unit that we really like and getting some friends of ours to go scope it out and get more photos for us. I am not sure if it is really worth waiting a year. Its year more that we pay off someone else bond...

 

[DukeofHouse]

So, once the bond has been approved I assume we could be in the new place within a month or two then?

All the estate agents we spoke to said we should work on a 3 month turn around time from the moment the bond is approved. It took 13 weeks when we bought our place in October.

 

[Priapus]

All the estate agents we spoke to said we should work on a 3 month turn around time from the moment the bond is approved. It took 13 weeks when we bought our place in October.

This is what I have been thinking. Possibly a 3 month wait. Which means, if we start this process now, we might only need to stay at a temp residence for a few weeks. When were your bond fees and transfer duties payable? And the first repayment on the bond, if you don't mind me asking?

 

[Milano]

If you change the title deed later then transfer fees will apply, no?

 

[Priapus]

If you change the title deed later then transfer fees will apply, no?

Well, that's what I was thinking is the case. Which is still cheaper than adding my partner now to the title deed.

 

[Salvage]

My 2c on your first 3 Qs.

1. Budget on 2.5 to 3 months after the OTP is signed. A "bond approval in principle" can take a few hours and should satisfy that requirement/clause in the OTP. A full bond approval will typicaly take up to 48 hours after submitting application and all required supporting documentation. If all goes well with the bond, the long wait then typically comes down to the sellers having to turn around the rates & taxes clearance certificate, electrical compliance certificate, etc. That takes a while. Especially if the rates and taxes account is inaccurate, because of "estimated meter readings" and so one. Once everything is in order and the transfer is submitted to the deeds office, that will typically take ten working days to process the transfer.

2. Depends on the area. In JHB for example complexes and homes inside security estates are preferred in most instances because of perceptions about greater security. If having the freedom to do with your property as you please is important to you, freehold house. I'm a control freak so freehold it is for me.

3. I would approach banks directly and do everything myself, but I'm allergic to middlemen and have above mentioned control issues.

 

[Priapus]

My 2c on your first 3 Qs.

1. Budget on 2.5 to 3 months after the OTP is signed. A "bond approval in principle" can take a few hours and should satisfy that requirement/clause in the OTP. A full bond approval will typicaly take up to 48 hours after submitting application and all required supporting documentation. If all goes well with the bond, the long wait then typically comes down to the sellers having to turn around the rates & taxes clearance certificate, electrical compliance certificate, etc. That takes a while. Especially if the rates and taxes account is inaccurate, because of "estimated meter readings" and so one. Once everything is in order and the transfer is submitted to the deeds office, that will typically take ten working days to process the transfer.

2. Depends on the area. In JHB for example complexes and homes inside security estates are preferred in most instances because of perceptions about greater security. If having the freedom to do with your property as you please is important to you, freehold house. I'm a control freak so freehold it is for me.

3. I would approach banks directly and do everything myself, but I'm allergic to middlemen and have above mentioned control issues.

Thanks for the feedback.

1. Would the transfer duties then apply only when submitting to the deeds office?
2. I am much like you in the sense I would want that freedom to do as I please. However its a starter home and an investment. So I think I can deal with it for now.

Another question I have - should I get pre-approval first, doing an OTP?

The only issue I foresee are bank statements. I cannot get originals as I am out of the country until March. I think my bank (FNB) are the only financial institute that won't require them.

 

[DukeofHouse]

This is what I have been thinking. Possibly a 3 month wait. Which means, if we start this process now, we might only need to stay at a temp residence for a few weeks. When were your bond fees and transfer duties payable? And the first repayment on the bond, if you don't mind me asking?

We had to put down a deposit within 10 days of both parties signing the OTP, though this was not the full bond deposit or transfer duties.
I can't remember the bond fees - I may have mentally blocked these out as they were pretty high. They are dependant on the value of the property so you'll need to speak to the attorneys for that.
Transfer duties needed to be paid before all the documents could be sent to the deeds office, so about 6 weeks after the OTP.
The first repayment went off in November (bond was registered around 11 October) and included the October payment.

 

[Priapus]

We had to put down a deposit within 10 days of both parties signing the OTP, though this was not the full bond deposit or transfer duties.
I can't remember the bond fees - I may have mentally blocked these out as they were pretty high. They are dependant on the value of the property so you'll need to speak to the attorneys for that.
Transfer duties needed to be paid before all the documents could be sent to the deeds office, so about 6 weeks after the OTP.
The first repayment went off in November (bond was registered around 11 October) and included the October payment.

Very helpful, thank you.
I've worked out the bond fees and transfer duties. Not pretty. But at least it doesn't need to all be paid at the same time. Putting a deposit down when signing the OTP is also fine with me as it would secure the place. In the interim it might be better to get a pre-approval as well from my bank.

 

[Salvage]

Thanks for the feedback.

1. Would the transfer duties then apply only when submitting to the deeds office?
2. I am much like you in the sense I would want that freedom to do as I please. However its a starter home and an investment. So I think I can deal with it for now.

Another question I have - should I get pre-approval first, doing an OTP?

The only issue I foresee are bank statements. I cannot get originals as I am out of the country until March. I think my bank (FNB) are the only financial institute that won't require them.

1. My experience is that the transferring attorneys will request that the buyer pay this up front to them together with other legal costs into a trust account within ten days of the OTP being signed. They then sort it out with the deeds office at the appropriate time. I imagine this could vary between different transferring attorneys. If you have a transferring attorney you know/prefer/trust you can include that as one of your conditions in the OTP, rather than the seller appointing the attorneys (this is often just whoever the estate agent knows).

2. I could be mistaken, but I'm not sure banks still do the pre-approval. You mention FNB as your bank. Far as I know they used to have a product called "Passport to Purchase" which was essentially a pre-approval but they've stopped doing that.

 

[Priapus]

2. I could be mistaken, but I'm not sure banks still do the pre-approval. You mention FNB as your bank. Far as I know they used to have a product called "Passport to Purchase" which was essentially a pre-approval but they've stopped doing that.

Correct, just looked now and don't see anything. So, it seems I need to sign a OTP first before applying for a bond.

 

[ToxicBunny]

Banks don't do pre-approvals anymore from my knowledge... but they will give you a figure roughly that they think you can afford that they will approve... Drop that by 25% and you should be golden in terms of getting approval.

In a city like Durban, from getting bond approval to being able to move in is generally a 3 month process... but I would bank on 4 months to be safe.

 

[Sher11zn]

I did mine via Nedbank, they were quick and gave me a good rate. Also you can ask them all the questions.
I didnt have to pay deposit but it depends where you are buying, some ask for it others dont.

 

[Priapus]

Banks don't do pre-approvals anymore from my knowledge... but they will give you a figure roughly that they think you can afford that they will approve... Drop that by 25% and you should be golden in terms of getting approval.

In a city like Durban, from getting bond approval to being able to move in is generally a 3 month process... but I would bank on 4 months to be safe.

Using the 25% rule means FNB still offering me more than the purchase price of the property I want with a 90% bond. So, off to a good start then.

I did mine via Nedbank, they were quick and gave me a good rate. Also you can ask them all the questions.
I didnt have to pay deposit but it depends where you are buying, some ask for it others dont.

I prefer to put a deposit down to save on interest and monthly repayments.
Will apply with FNB first as I've been with them for many years now.

 

[ToxicBunny]

Using the 25% rule means FNB still offering me more than the purchase price of the property I want with a 90% bond. So, off to a good start then.



I prefer to put a deposit down to save on interest and monthly repayments.
Will apply with FNB first as I've been with them for many years now.

Your other option on the deposit front, is to get a 100% bond, and in your first month, you dump what you would have had as a deposit into the bond. Same net effect really, but you still have access to the capital in the event of an emergency.

 

[Priapus]

Your other option on the deposit front, is to get a 100% bond, and in your first month, you dump what you would have had as a deposit into the bond. Same net effect really, but you still have access to the capital in the event of an emergency.

Didn't think of that, thanks. I'll see what the banks offer and go from there.