First time property buyer

D

D3x!

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Hi All,

I know there are likely many similar threads, so apologies.

I wanted to see if i can get some more insight into what I need to be concerned with looking at purchasing a property.

i.e
what costs do i need to be aware of, both once off and recurring, i.e rates and taxes, do i need life insurance? building insurance, bond origination costs? etc etc

also any general knowledge to save on fee's, common tips etc will be appreciated.

regards,
D3x!
 
When buying you'll need to pay transfer fees and lawyers... usually around R30K. If you buy in a complex you'll pay levies which covers property insurance and sometimes water and general upkeep of the complex... we pay about R900. Then you need to pay the municipality to take your rubbish, etc that's about R650 for us. If you don't have life insurance and you have people that depend on you financially then get life insurance, you don't want to leave them in a dwang if you die.

Still Repping RoS?
 
Adding to the above, transfer fee's and initiation fee's are dependent on the property price.
Also keep in mind rates and taxes and electricity.

If you are thinking of a complex, request the body corporates financials to see how they are doing.
Keep in mind, that thatch or non face brick complex's will require maintenance that is sometimes done via special levies.
These can be quite high, so keep a slush fund for general maintenance on your property and special levies
 
D3x! said:
Hi All,

I know there are likely many similar threads, so apologies.

I wanted to see if i can get some more insight into what I need to be concerned with looking at purchasing a property.

i.e
what costs do i need to be aware of, both once off and recurring, i.e rates and taxes, do i need life insurance? building insurance, bond origination costs? etc etc

also any general knowledge to save on fee's, common tips etc will be appreciated.

regards,
D3x!
Click to expand...

These costs are mostly dependent on the price of the property you're buying.

Assuming a R1m purchase price with 100% bond.

Bond Registration Cost : R12900
Initiation Fee : R5700
Sundry Fees : R1200

Transfer Cost : R15675
Transfer Duty : R12000
Sundry Fees : R1200

(These are pretty much the maximum you will pay, and you can negotiate them down)

Rates : Depends on the city, but a R1m property should be around R700 per month
Electricity : Varies, but if its a house work on about R1200 per month
Water : Varies, but I would work on about R300 per month

You are not required by law to have life insurance, but the bank may require it to grant the loan. You will need building insurance, I would guestimate that to be about R300 per month. Don't let the bank force you into taking theirs, get it added to your existing policy, you will save money.
 
syntax said:
Adding to the above, transfer fee's and initiation fee's are dependent on the property price.
Also keep in mind rates and taxes and electricity.

If you are thinking of a complex, request the body corporates financials to see how they are doing.
Keep in mind, that thatch or non face brick complex's will require maintenance that is sometimes done via special levies.
These can be quite high, so keep a slush fund for general maintenance on your property and special levies
Click to expand...

yep check up if the other owners are up to date with levies cause this impacts levy payments
 
You will get lots of advice on the financial aspects - so here is some on the property itself:

  • Open and close every tap in the house, let the hot taps run for a bit to test temperature, leakage, strange noises, drainage etc.
  • Flush every toilet in the house at least twice, check to see how long the refill takes, the noise it makes, etc
  • Check the seals around the baths, showers and sinks in the house. See how neat/clean/proper they are.
  • Check every window (open and close) and check the putty around the windows
  • Check the gutters and drains around the house
  • Keep an eye open for any trees or other plants that may cause problems with paving or foundations
  • Turn on and off every light in the house, the stove, the oven, various appliances and plugs. Take along something to plug in at every plug and test that it works. It is the most annoying thing to buy a house that allegedly passed the electrical compliance inspection only to find that plugs don't work and switches are broken and fittings are rubbish. Check all the fittings, too.
  • Open and close every cupboard door or regular door to check the hinges and the locks.
  • Envision a heavy rain storm or hail storm or strong wind and inspect the property with that in mind. Think about covers, water run-off, drainage, roof tiles, seals... - You don't want to buy a house during the dry season and when the first storm comes up your roof tiles blow off and it rains into your house and you have to replace carpets and ceiling panels.
  • Check all the walls, look for cracks, evidence of repainting or polyfilla and find out why it was used and what it covered up.
  • If the unit has stairs, check them for strength and proper bolts etc.

Those are just a few thoughts off the top of my head.
 
AnibugZA said:
You will get lots of advice on the financial aspects - so here is some on the property itself:

  • Open and close every tap in the house, let the hot taps run for a bit to test temperature, leakage, strange noises, drainage etc.
  • Flush every toilet in the house at least twice, check to see how long the refill takes, the noise it makes, etc
  • Check the seals around the baths, showers and sinks in the house. See how neat/clean/proper they are.
  • Check every window (open and close) and check the putty around the windows
  • Check the gutters and drains around the house
  • Keep an eye open for any trees or other plants that may cause problems with paving or foundations
  • Turn on and off every light in the house, the stove, the oven, various appliances and plugs. Take along something to plug in at every plug and test that it works. It is the most annoying thing to buy a house that allegedly passed the electrical compliance inspection only to find that plugs don't work and switches are broken and fittings are rubbish. Check all the fittings, too.
  • Open and close every cupboard door or regular door to check the hinges and the locks.
  • Envision a heavy rain storm or hail storm or strong wind and inspect the property with that in mind. Think about covers, water run-off, drainage, roof tiles, seals... - You don't want to buy a house during the dry season and when the first storm comes up your roof tiles blow off and it rains into your house and you have to replace carpets and ceiling panels.
  • Check all the walls, look for cracks, evidence of repainting or polyfilla and find out why it was used and what it covered up.
  • If the unit has stairs, check them for strength and proper bolts etc.

Those are just a few thoughts off the top of my head.
Click to expand...

Just to add as well.

  • Open the hot water to make sure the geyser is working.
  • If the kitchen cupboards are made from press-wood inspect the wood for any water damage.
  • Also check the condition of the roof support wood outside of house( don't know the proper term).
  • And lastly never trust an estate agent. They will tell you anything to get a sale.
 
As an addition to this...

Climb into the roof and check the plumbing (it should be all copper), check the condition of the roof trusses and roof membrane underneath to see that it looks mostly intact. Look at the state of the wiring in the roof as well, if its messy as well, you can expect your electrics to probably have been done on the cheap and will potentially give you problems.

If possible, hang around the area late into the evening to see what the neighbourhood is like at night.. be in the area at both rush hour times to see what traffic outside the property is like.
 
DigitalSoldier said:
[*]And lastly never trust an estate agent. They will tell you anything to get a sale.
[/LIST]
Click to expand...

Yeah hey...I was hoaxed into viewing a house yesterday just to find out that it is in a security complex...I would prefer free standing over a complex.

And the agent did not know much about the house as well...
 
CamiKaze said:
Yeah hey...I was hoaxed into viewing a house yesterday just to find out that it is in a security complex...I would prefer free standing over a complex.

And the agent did not know much about the house as well...
Click to expand...

Had similar when I was hunting around...

One agent did it to me once, and from then on I wouldn't view a house unless the agent had given me the address and i could view it on Google Maps before hand.
 
thanks all so far.

the worst is on these property sites is to narrow the listing to houses for example and end up with 100's of results of flats :/
 
D3x, try and get your bond through Standard Bank - they offer a "start-up" bond which allows for 108% bond if you qualify for it.

But yeah - as mentioned you need to remember registration fees etc. Mine worked out to R70k.
 
Slaught3r said:
D3x, try and get your bond through Standard Bank - they offer a "start-up" bond which allows for 108% bond if you qualify for it.

But yeah - as mentioned you need to remember registration fees etc. Mine worked out to R70k.
Click to expand...

thanks man, wont need 108% bond, but on those line where is best place for bond?

is SB good in terms off rates and service?

I am with FNB but i have heard that SA homeloans is great?
 
D3x! said:
thanks man, wont need 108% bond, but on those line where is best place for bond?

is SB good in terms off rates and service?

I am with FNB but i have heard that SA homeloans is great?
Click to expand...

Try everyone..

A bank you normally woudn't think of might surprise you.
 
If you have or are planning a family also think about school zones. Private schools cost R4000+ pm where a decent ex model C school can be as good for a fraction of the price. The trick is you have to live in a specific georgraphical zone to get into a decent school like that so do some research first. Related to that is traffic. Try drive from the area to work and back a few mornings and evenings to get an idea on if you can live with it or not.

If you go sectional title get a copy of the rules BEFORE putting in an offer. I see this mistake all the time in my complex. People buy because the estate agent said the complex was pet friendly but then later on they find out that their dog is too big or they have too many pets and are forced to get rid of a precious pet. You can only blame yourself if you don't check the complex rules first. Also in complexes I find it very beneficial to just walk around the complex and see how well maintained it is and to chat to any residents you can and ask them how its run and how good the managing agent and trustees are.

In general for lower maintenance stay away from plastered exterior walls and thatch. Rather look for face brick and tile roofs. The advice given earlier on testing doors, water, electricity etc is also very good.
 
D3x! said:
thanks man, wont need 108% bond, but on those line where is best place for bond?

is SB good in terms off rates and service?

I am with FNB but i have heard that SA homeloans is great?
Click to expand...

If you don't bank with the bank, you're unlikely to get above 90% bond - check each banks bond policy Even though I'm moving to FNB, they still only offered me 90% bond even though the LTV is low risk (the house is worth way more than what I paid).

LTV - Loan To Value: banks will use the value of your property to determine the risk factor. The higher the banks value of your home in relation to the money your asking for, the lower the risk, the better the interest rate. If the property is worth less than what your paying, then banks will only give you a bond for that value. So make sure your paying less than market value.

As for SA Homeloans. They gave me the best over at 95% but I don't like that they use the money market for their rates. Also they can (and often do) change their loan rate at very regular intervals, as often as 3-6 months. The risk was too high for me.


I worked through a bond originator, OOBA, and so glad I did. They did all the work, negotiated a better deal with the banks and all I did was just send documents as required. Banks pay bond originators, not you, so its not more expensive to use them. The advantage is they know what to tell the banks and a good bond originator will only ask you questions they need to know (as mine said I must not tell anything she is not asking for :) )

From start to finish, it took 7 calendar days from application to approval using OOBA. OOBA used the SA Homeloans offer to get FNB to give me an excellent rate.
 
Cius said:
If you have or are planning a family also think about school zones. ...

In general for lower maintenance stay away from plastered exterior walls and thatch. Rather look for face brick and tile roofs. The advice given earlier on testing doors, water, electricity etc is also very good.
Click to expand...

Very good advice. Also if there is thatch your insurance goes insane, mentally insane.
 
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