Offer to purchase question

[APoc184]

I have been following this thread for a while now and there is some great info.

I want to start the process myself, so far I've just been browsing property sites and getting a feel of what to expect.

What would be the next step? Viewing properties/ bond originator/ speak to agents or private sellers??

I have zero knowledge of the property purchasing process besides the info in this thread

So this is how we approached it.

Obviously have an affordable budget in mind. And always remember about transfer and bond registration costs. And unlike rental places, you will now be liable for rates and taxes and maintenance. Most listings show an indication of rates and taxes and levies if applicable.

You can get in touch with a bond originator already and get pre-approval from them. (PM me for a referral for a great bond originator that helped us a lot to get the best deal).

Wife started browsing a lot on PrivateProperty and Propert24 before lockdown to get an idea of prices in our preferred areas.

After lockdown she started making appointments to go and view properties. Some agents are terrible. Either never coming back to you or only replying 3 to 4 days later to simple enquiry mails. Make sure to personalise your web enquiry or message and not just leave it on the "We want to know more" template.
We also had a few experiences with bait and switch agents. Great property, great price. And when you contact them they say it has already been sold and try to push some of their other properties onto you.
Unfortunately we have zero experience with private sellers.

Definitely start viewing properties in person. Because photos are very very deceiving on the listings.
Places that looked stunning on the photos turned out to be really small and not what we expected at all. Whereas other properties' photos were really meh! and turned out to be gems. Like our current purchase. Half of the property was not even captured and the photos did no justice to any of the rooms either. Apart from the great location, only the swimming pool and lapa photos tickled our fancy and actually got us interested in going for a viewing.

You'll see places you immediately fall in love with and others that you simply walk through and want to forget about instantly. We viewed a total of 8 properties before our blooper. 9th viewing was our current purchase. Whereas my parents and friends viewed 1 property, loved it and bought it. You will know.

Agents can see if you like a place or not. And some might be pushy to get you to sign. Exhibit A --> This very thread.
TAKE YOUR TIME! Don't be bullied or fall for sales gimmicks like we did. There is probably not another buyer minutes away from signing.

You will know what you are looking for, or what will be deal breakers. But discuss it with each other.

Just some quick tips I received and can think of quickly.

• Check other prices in the area and see if the listing falls within that range for the same size and property features.
• Check roofs, ceilings, foundations, plumbing, security and other big stuff with a magnifying glass.
• Check if kitchens, bathrooms and floors are up to modern standards, If not, figure out whether it is worth it and credible to deduct those upgrading costs from the purchase price offer. Tell the agent and sellers why you are offering less. (well that is what we did)

Sure other forumites will chip in with even more and better advice.

Good luck with the house hunting!

 

[APoc184]

MyBB deal breaker tip!

Check if the area has fibre!

 

[LlamaParty]

I'm going to keep this thread running and update it as things happen.

Think there is an abundance of knowledge here already for first time buyers. But the process is far from over.

By updating this thread with each and every step we go through, not only will we receive more great advice ourselves from the replies. But other potential buyers can also see the whole process from beginning till end, and like us, don't have to wonder about what happens next, how long stuff takes or which tips they can follow to avoid any unnecessary delays or stressful moments.

I thank each every one of you for the advice, tips and just holding thumbs for us in the whole process so far. Real rollercoaster ride for us so far.

This thread has been extremely helpful, thank you! We've been going through the same process, almost matching your timeline exactly.

Just signed our accepted bond quote yesterday. I bank with FNB but Standard Bank ending up coming back with an unbeatable deal. I'll miss FNB, but Standard Bank offered a further 0.5% drop on their rate if I switch my banking to them.

 

[APoc184]

This thread has been extremely helpful, thank you! We've been going through the same process, almost matching your timeline exactly.

Just signed our accepted bond quote yesterday. I bank with FNB but Standard Bank ending up coming back with an unbeatable deal. I'll miss FNB, but Standard Bank offered a further 0.5% drop on their rate if I switch my banking to them.

Awesome. Please do contribute to this thread as you learn new things or hit snags.

Yeah we got a better deal from FNB this time which is great because all our stuff is under one umbrella then. But would have taken a better offer from another bank in a heart beat.

Bond originator tells us that certain banks focus on different property values and locations at different times. So they might give a better deal in their preferred location and price range, but give a worse deal and won't budge in locations and price ranges they are not really interested. Not sure how true that is.

 

[LlamaParty]

Awesome. Please do contribute to this thread as you learn new things or hit snags.

Yeah we got a better deal from FNB this time which is great because all our stuff is under one umbrella then. But would have taken a better offer from another bank in a heart beat.

Bond originator tells us that certain banks focus on different property values and locations at different times. So they might give a better deal in their preferred location and price range, but give a worse deal and won't budge in locations and price ranges they are not really interested. Not sure how true that is.

That makes sense, our bond originator also said it even varies from month to month depending on how risk adverse they happen to be at that time. We seriously need to buy her some flowers after this is all said and done, she's worked miracles with the rate we got.

I'm a bit disappointed at FNB, but it was a big enough difference to be worth the hassle of switching.

The next step is apparently to send the accepted bond documentation to the bond registration attorneys. The firm handling our transfer said they would offer a 10% discount on transfer and bond registration fees if we use them to do the bond registration as well. If you haven't already, it might be a good idea to check if the guys you're using are offering the same deal.

 

[APoc184]

That makes sense, our bond originator also said it even varies from month to month depending on how risk adverse they happen to be at that time. We seriously need to buy her some flowers after this is all said and done, she's worked miracles with the rate we got.

I'm a bit disappointed at FNB, but it was a big enough difference to be worth the hassle of switching.

The next step is apparently to send the accepted bond documentation to the bond registration attorneys. The firm handling our transfer said they would offer a 10% discount on transfer and bond registration fees if we use them to do the bond registration as well. If you haven't already, it might be a good idea to check if the guys you're using are offering the same deal.

Yes ours have been submitted to the transferring attorneys and they are just awaiting the appointment from FNB for a bond registration attorney which should happen on Monday or Tuesday.

Transferring attorneys also sent us a weekly update report late last night with a checklist of all the things that have been ticked off and all the stuff that still needs to happen.
Also shows that they have already requested all the cancelation figures and stuff from Tshwane in regards to rates and taxes. Says they had no need to request bond cancelation from sellers because property has been paid off 20 years ago and no bond is active on the property.

This weekly report will be awesome. Then we won't be stressing so much about what happens next.

 

[RedViking]

So on a 1.5m home. What is the average monthly payment including fees?

 

[APoc184]

So on a 1.5m home. What is the average monthly payment including fees?

Ours is close to R1.5m. And with prime rate over 20years our quote came back at estimated monthly repayment of R11500. Our rates and taxes is about R700/month on the property.

Then water & electricity. We will be saving a lot of money on electricity with solar geyser already installed and planning gas stove. Water might be more than our current rental place because of the swimming pool. But maybe not. Because our current rental place has a massive garden to water. Whereas new home has minimal grass and we will be eradicating lots of the trees and bushes.

 

[RedViking]

Ours is close to R1.5m. And with prime rate over 20years our quote came back at estimated monthly repayment of R11500. Our rates and taxes is about R700/month on the property.

Then water & electricity. We will be saving a lot of money on electricity with solar geyser already installed and planning gas stove. Water might be more than our current rental place because of the swimming pool. But maybe not. Because our current rental place has a massive garden to water. Whereas new home has minimal grass and we will be eradicating lots of the trees and bushes.

Awesome. So about R15 000 to also budget for general maintenance.

 

[APoc184]

Awesome. So about R15 000 to also budget for general maintenance.

Yes we are also budgeting around that range. Hopefully less when we do the gas stove.

Also planning on a solar blanket or pool cover for the pool so save on costs there.

But all those things will be discussed in the Home Improvements thread when the times comes. Don't want to totally derail this thread.

 

[rrh]

Many will laugh, but bear with me: make sure that your furniture will fit

In the past I've had a boss buying a new bed 'cos he couldn't fit his existing bed in the master bedroom. And a close friend left a double-bunk bed behind because he couldn't figure out how to remove it.

 

[APoc184]

Many will laugh, but bear with me: make sure that your furniture will fit

In the past I've had a boss buying a new bed 'cos he couldn't fit his existing bed in the master bedroom. And a close friend left a double-bunk bed behind because he couldn't figure

That is good advice. That is one of the things we discussed endlessly while we viewed properties.

And we've sort of had this happen years ago at a rental place. Our couches would just not fit through the two doors. Very narrow passages at both and there was just no way to twist and turn them to get in.

And don't laugh now. But we eventually had to remove one of the large windows (remove all the putty and take out window) then take the couches in that way. Then refitted the window.
Same exercise 3 years later when we moved out. Luckily had approval by the owner.

 

[rrh]

When I finally built my house fifteen years ago one of the things that the architect did was visit my then-house and ask me to point out what furniture (and other items) I intended to take with me. That visit saved a lot of heart-ache.

 

[Gozado]

Yes we are also budgeting around that range. Hopefully less when we do the gas stove.

Also planning on a solar blanket or pool cover for the pool so save on costs there.

But all those things will be discussed in the Home Improvements thread when the times comes. Don't want to totally derail this thread.

I'd be interested in them, though, in this thread, please, not for the Home Improvement aspect, but purely the financial side, i.e. knowing it ought to be part of the buyer's decision-making process: knowing what will need to be spent on the property ought to be part of the budgeting of deciding what a buyer can afford to buy.

Some changes to a home are nice-to-have and others essential, and where they are on the scale is probably subjective, to a certain extent. What do others consider to be a good financial safety margin, a nice purse to have before buying, ready for immediate repairs that are necessary to be able to live in the house? And what do these items cost, very broadly, to do oneself, to get someone in to do them?

For example:

• installing burglar guards, e.g. per window small, medium, large
• reinforcing the outside doors and changing the locks, e.g. per door
• installing an electric perimter fence, e.g. per metre
• replacing the geyser
• getting in a service to do a deep clean before moving in, e.g. per room
• getting in a service to do an intensive garden hack down and clean-up
• electricial to re-inspect, and install extra safety and sockets
• having a pool-consultant in to restore the pool's functioning
• major overhaul of a very sick pool
• completely replacing one toilet and cistern
• painting the house externally
• painting the house internally, e.g. per room
• re-roofing
• sanding down and sealing wooden floors, e.g. per room

What else could/should be on the list? (And of course, happy the buyers who need not have to fix/change such items... but on should at least collect the information, more or less. Could anyone put prices on these, please?
Once one knows these kind of costs, then they can be factored into the Offer to Purchase.

 

[R13...]

Many will laugh, but bear with me: make sure that your furniture will fit

In the past I've had a boss buying a new bed 'cos he couldn't fit his existing bed in the master bedroom. And a close friend left a double-bunk bed behind because he couldn't figure out how to remove it.

Not a laughing matter.
I rented a place where I needed to get someone in yo remove the security gate everytime I moved stuff in and out.

 

[rrh]

What else could/should be on the list? (And of course, happy the buyers who need not have to fix/change such items... but on should at least collect the information, more or less. Could anyone put prices on these, please?
Once one knows these kind of costs, then they can be factored into the Offer to Purchase.

Pay for a building inspection report - it could end up saving the purchaser a fortune.

 

[cguy]

Ours is close to R1.5m. And with prime rate over 20years our quote came back at estimated monthly repayment of R11500. Our rates and taxes is about R700/month on the property.

Then water & electricity. We will be saving a lot of money on electricity with solar geyser already installed and planning gas stove. Water might be more than our current rental place because of the swimming pool. But maybe not. Because our current rental place has a massive garden to water. Whereas new home has minimal grass and we will be eradicating lots of the trees and bushes.

Q: I saw earlier that you got a 100% bond. Was there any interest rate penalty for that?

 

[APoc184]

Q: I saw earlier that you got a 100% bond. Was there any interest rate penalty for that?

Yes all of our quotes came back as 100% bond approvals. No penalties or anything that I'm aware of.

We simply had to ask the bond originator to fight for a better interest rate for us with FNB. Standard bank was way off so even if they did come back with a better deal they would never have even beaten FNB's original quote. And although it was only a little drop it still makes a big difference in the long run.

And ABSA and Nedbank never even came back to us.

 

[ToxicBunny]

Pay for a building inspection report - it could end up saving the purchaser a fortune.

Just be aware the the inspection report has no guarantees... I've seen reports that missed fundamental issues with houses before, and the new owner can do nothing against the inspection company...

 

[cguy]

Yes all of our quotes came back as 100% bond approvals. No penalties or anything that I'm aware of.

We simply had to ask the bond originator to fight for a better interest rate for us with FNB. Standard bank was way off so even if they did come back with a better deal they would never have even beaten FNB's original quote. And although it was only a little drop it still makes a big difference in the long run.

And ABSA and Nedbank never even came back to us.

Sounds good. It's been many years for me, but I recall interest rates going up as the bond approached 100% since it means that the bank takes on a lot more risk.