Purchasing a property is one of the most significant investments you’ll make in your lifetime, and as First-Time Home Buyers in South Africa, it’s natural to feel nervous about beginning this journey.
While the process may seem daunting, the good news is that with the proper knowledge, preparation, and advice from expert property practitioners, it doesn’t have to be.
At Homes For All, we have gathered some of the most important tips, providing essential information that will help you make informed decisions and ensure a successful home purchase.
One upfront consideration is giving thought to the prospect of buying in an off-plan development. This route comes with its own list of criteria, as you want to be sure you choose the proper development carefully. Consider the area it is in, and its amenities; the price range of units on offer, and how the overall offering aligns with your lifestyle and financial goals. Researching different neighbourhoods and developments will help you find a location that meets your current needs and holds the potential for future growth and value appreciation.
Understanding the home-buying process
The home-buying process in South Africa involves several key stages, from initial research to finalising the Offer to Purchase (OTP). It’s important to familiarise yourself with every step to avoid surprises along the way. The process typically includes:
1. Research and Planning:
Start by identifying your needs and preferences in a property. Consider factors such as proximity to work, schools, and amenities, and whether the home accommodates future plans like starting – or growing – a family. Research different areas and developments to find a home that fits your lifestyle and financial goals.
Calculate how much you can realistically afford, considering your monthly income, current expenses, and existing debts. Many first-time buyers in South Africa use tools like Ooba’s Bond Calculator to determine monthly repayment amounts.
Remember to account for upfront costs (e.g., deposits, transfer duties, and legal fees) as well as ongoing maintenance and utility expenses.
Deposits
A deposit is an upfront payment made by the buyer to secure the property. It typically ranges from 5% to 10% of the purchase price and shows the seller that the buyer is serious about the purchase. At Homes For All we do not require a deposit, making it even more affordable.
Legal fees
Legal fees cover the cost of hiring a conveyancing attorney to transfer ownership to you. This includes drafting and reviewing contracts, conducting property searches, and registering the transfer with the deeds office. At Homes For All our house prices are all-inclusive and no additional legal fees are required.
Transfer duties
Transfer duties are taxes paid to the government based on the property’s purchase price. They must be paid before ownership of the property can legally transfer to the buyer. At Homes For All, all prices are inclusive of tax, making it even more affordable for a first-time home buyer.
Ongoing expenses
Ongoing expenses include maintenance and utilities. Maintenance costs cover repairs and upkeep of the property, while utilities includes monthly bills for services such as water, electricity, and/or gas. These expenses are crucial to include in your budget, in order to cover the long-term costs of homeownership.
This will give you a realistic view of what you can afford without stretching your finances.
3. Bond Approval and Deposits:
A bond (or home loan) is essential for most home purchases. To qualify for a bond, South African financial institutions will assess your credit score, income stability, and debt-to-income ratio. It is crucial to ensure your financial standing is sound before applying for a bond. Once approved, buyers typically need to provide a deposit, ranging from 5% to 10% of the purchase price. However, some developers, like Homes for All, offer deposit-free options, making it easier for first-time buyers to enter the market. It’s important to note that some banks may still require a deposit depending on the buyer’s affordability assessment.
4. FICA Documents:
In South Africa, compliance with the Financial Intelligence Centre Act (FICA) is mandatory. This requires buyers to provide documents verifying their identity and address. Be prepared to submit a certified copy of your ID, proof of residence (such as a recent utility bill), and bank statements. These documents will be necessary during the bond application process and when finalising the OTP.
Exploring home loan options
Applying for a home loan and then securing it, is a critical step in the home-buying process. In South Africa, various financial institutions offer home loans with different terms and interest rates. Research and compare the options available to you.
Consider consulting with a financial institution or Bond Originator that can provide expert advice and help you find the best deal. MultiNET and Ooba for example, are able to assist you when applying for a bond.
Tips for a successful home purchase
- Get Pre-Approved: Getting pre-approval for a home loan will boost your chances of making a successful offer.
- Inspect the property: Conduct a thorough inspection in order to identify any potential issues.
- Understand the Offer to Purchase (OTP): Read and understand the OTP, which is a legally binding contract, outlining the terms of the sale.
Finalising the OTP
Once your offer is accepted, your next step will be to finalise the OTP and complete the necessary paperwork. This includes arranging for the transfer of ownership and registering the property in your name. Work closely with your property practitioner, attorney, and lender to ensure a smooth process. After all the legalities are settled, you can start planning your move, and soon be enjoying your new home.
Don’t be afraid to attend show house days and viewings to get an understanding of what is available within your budget. In addition, it will give you the opportunity to evaluate the build quality, and get a sense of what these homes offer. It’s always a good idea to discuss your options with a skilled property practitioner who can in turn, provide you with insider knowledge, streamline your search process, and help you get the best deals.
Buying your first home is a significant milestone that requires careful planning and informed decision-making. You can make a successful purchase by understanding the home-buying process, calculating affordability, exploring home loan options, and navigating the property market. Stay organised, seek professional advice when needed, and keep your long-term investment goals in mind. With the right approach, you can achieve your dream of homeownership in South Africa.
Contact Homes For All for expert advice
At Homes For All, we offer full title housing options along with the flexibility to customise your home according to your preferences, ensuring that it truly reflects your unique style and requirements. And, the cherry-on-the-top… we do not require you to pay a deposit!
We take pride in exceeding expectations and making the dream of homeownership a reality for everyone. Contact us at Homes For All, and we’ll help you find the perfect place to call home.
Our off-plan developments:
We have the perfect selection of developments for first-time homeowners, from which you can choose.
Speak to one of our team to find out more.
Email: sales@homesforall.co.za
Facebook – https://www.facebook.com/Homesforalll/
Instagram – https://shrturl.app/U5gWJT
WhatsApp- 082 721 2570
Homes For All holds a Fidelity Fund Certificate issued by the Property Practitioners Regulatory Authority (PPRA)
