A step-by-step guide to home buying

Buying your first property can be a daunting process, especially when interest rates are high and there is uncertainty around whether yet another hike is in the pipeline. Doing your research and relying on the advice of a real estate agent could save first-time buyers from making expensive mistakes on their first property purchase.

“Starting off on the right foot in the home-buying journey is crucial to avoid disappointment down the line,” explains Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa.

“Many first-time buyers dive straight into house hunting without knowing their financial boundaries. Instead of rushing into property searches, it’s essential to first understand what you qualify for,” he advises.

To avoid being caught off guard, such as when there is an interest rate hike at some stage early into your first home purchase, Goslett says that the first step in the house-hunting journey should begin with playing around on a bond calculator (like the one on BetterBond’s website). Use it to see what the home loan instalment would amount to at various interest rates.

Apart from discovering what your monthly repayments might be, Goslett advises that it is also important to see what the total bond fees and transfer costs will amount to, as these amounts will be payable upfront as soon as your offer is accepted. This information is usually displayed at the bottom of a property listing across most property portals and websites.

“After doing your initial research, I would always recommend working through a bond originator like BetterBond, as they will be able to guide you and will also help you get the best deal on your home loan by applying to all the major banks on your behalf – and at no cost to you. They will also help you get pre-approved so that you know exactly how much you could qualify for on a home loan.”

With a pre-approval certificate in hand, the next step in the process is to reach out to a local RE/MAX agent.

“While solo searches are an option, partnering with a real estate agent can streamline the process. Agents possess market insights and often have access to listings before they appear online. By communicating your preferences and dislikes, agents can efficiently narrow down options, saving valuable time,” says Goslett.

Next, it’s time to start viewing homes in person. Clearly define your wants versus your needs and keep this in mind when walking through a property.

“Apart from the liveability of the home, my advice to first-time buyers is to consider the investment value of the home. In all likelihood, your first home won’t be your forever home, so you’ll want to find a property that has the best potential of appreciating in value over time so that you can use the capital appreciation to help you climb the property ladder,” he recommends.

Once you find your perfect home, it’s time to submit an offer to purchase (OTP). Goslett warns that this is a legally binding document, so it is imperative to read through every single clause carefully.

“If you are unsure of any of the clauses in the OTP, ask your agent for clarity. Never feel afraid to ask – the agent is there to help you understand,” he notes.

One of the last steps in the buying process is the anxious wait to hear back from the seller. There is usually a timeframe stipulated in your OTP regarding how long your offer is valid.

The seller has until that date to get back to you, at which point they might counter your initial offer, reject your offer, or accept it. They might also ask for an extension on the deadline and it is up to you whether you are willing to accept the extended timeframe or rather to let the offer lapse and no longer be valid.

The final piece of the puzzle is when the offer is accepted and the OTP is signed by both the seller and the buyer. This will then kick off the transfer process (which is a whole separate endeavour) and the transferring attorney (selected by the seller) will be in touch to guide you through the lengthy administrative process of transferring the home into the new buyer’s name.

“Buying your first home can be daunting, but it need not be. With the advice of a reputable agent on hand, purchasing your first home can be a stress-free journey from start to finish,” Goslett concludes.