Tips on how to negotiate the mine field of purchasing your own property

According to the Principal of Leapfrog Properties in Polokwane, Floris de Kock, it is advisable to engage the services and advice of a reputable and qualified estate agent to ensure that a buyer is aware of all the financial obligations attached to the purchase of a property.

“The first thing is to determine for what amount you qualify and obtain pre-approval, which a bond originator could assist with.

“You need to have a stable income, clear credit record at the bank where you bank and a clear credit record with the credit bureau. This is however only a guideline as most banks have different criteria once they assess your application,” De Kock says.

De Kock’s advice to first-time buyers is first to decide what type of property you’re looking at, and the location.

“Depending on your budget, the best way to start is a townhouse or apartment. Once you have outgrown the property, you can sell it again and purchase a bigger property. If you have a family then the best way to go is a family home with a yard.

“If you need the security, a house in a security estate is the best way to go,” he explained and emphasised that the most important consideration is location as that will be a consideration for a future buyer if you want to sell.

“Once you have identified your new home, an offer of purchase has to be signed and forwarded to the financial institution for consideration.

“If you are a first-time home buyer, the banks will probably offer you a 100% loan.

“A bank in the city currently provides a loan of 105% of the purchase price if the loan is not more than R1,5 million, the maximum age of applicant is 35, the maximum term is 20 years and you have a professional degree.

“Another bank offers 110% on the purchase price and another will grant 105% if the loan does not exceed R1,8 million,” he added.

De Kock advises buyers to take note of other costs involved, taking a purchase price of R1,5 million as example. “The transfer duty and fees are approximately R50 175 as well as attorneys’ fees of approximately R31 425 and bond cancellation fees if applicable. Another R5 000 applies if it is a sectional title. The seller has to pay municipal clearance fees as well as certificates for electricity, gas and electrical fencing,” he explains and adds that, once the paperwork has been lodged at the local deeds registration office, it takes about 10 working days to registration.

“Monthly rates and taxes, water, electricity and levies in a sectional title or security estate are payable as well as maintenance costs and should be budgeted for by the new owner,” De Kock cautioned in conclusion.