Carol Reynolds, Pam Golding Properties area principal for Durban Coastal said that buying a property is very exciting but potential buyers need to know what their budget is first.
“To understand exactly what your budget is by liaising with a bank or a bond originator to acquire a bond pre-approval,” Reynolds said.
“Once you know what your budget is, then you can start looking for property in the area and price band that suits your goals and affordability.”
Elaine Vandayar, licensee, Seeff Richards Bay shares a step-by-step look at the process of buying property.
Step 1: Find an agent.
Vandayar said that potential buyers need to find an agent they feel comfortable working with on what is likely to be the largest financial decision of their life.
“Ask friends and family members for referrals, and interview several real estate agents. Choose an agent who communicates, has your best interests at heart, and puts you first,” Vandayar said.
Step 2: Get a lender
After you have chosen a real estate agent who you trust to be your advocate, ask them to recommend lenders: an entity that will lend you money so you can buy your home.
A local agent has experience working with mortgage brokers and banks and can recommend lenders, according to Vandayar.
Vandayar said: “Choosing someone to handle the financial part of the home-buying process can feel like a scary step, but choosing a lender that is competitive on rates, communicative and available is key.”
Step 3: Have a good credit record
Now that you have a great lender, you can ask the ender for guidance or advice on any credit score issues you may be facing.
Whether the problem is small or big, the lender can provide guidance to fix your credit situation and get approval for a loan.
Step 4: Home loan approval
A lender will help you to determine exactly what you can afford and therefore which houses you should be looking at.
According to Vandayar, to arrive at a purchase price you need to factor in expenses like homeowner’s insurance, transfer and bond costs and utilities, to make sure that you can comfortably make your bond payments.
“The lender will then identify the total amount of money that they are willing to lend you,” Vandayar said.
“Having a pre-approval letter in hand when you are ready to purchase a home adds strength to your offer, which can be an important advantage in a competitive home-buying market.”
Step 5: Create a home wish list
Once you know what your purchasing power is, speak with your real estate agent about your ideal home should look like.
Decide on a few ‘musts’ – as well as ‘wants’ that you would ultimately be willing to compromise on.
Think bigger than just the colour of the kitchen or the floor plan. For instance, do you want to be within walking distance of shopping outlets? Do you want space between you and your neighbours? Or is proximity to a good school the most important factor?
Step 6: Search the listings
Now comes the fun part: searching for homes, with your agent.
“When you begin touring homes that are on your short list, take along a notepad and jot down your thoughts as you approach each home. Can you imagine yourself living there? Make note of what you like or don’t about each home,” Vandayar said.
Step 7: Do your due diligence
Doing your due diligence process means walking through a prospective property to make sure you haven’t missed any hidden problems. Your agent should guide you here as well.
According to Vandayar, if issues are found, buyers must negotiate for the current owner to fix them or take the cost of repair into consideration when making an offer.
Step 8: Make an offer
“Your real estate agent will walk you through the steps required to make an offer on a home in your area that meets your requirements,” Vandayar said.
Buyers should expect some negotiation and they need to discuss a competitive offer with their agent.
Step 9 – Get final mortgage approval
Once the Offer to Purchase has been accepted, you will work with your lender to get final approval for your home purchase by the date specified for the closing.
The lender may require a deposit, so make sure you know what funds will be expected.
Avoid making any major purchases like that big-screen TV or ride-on lawnmower until after closing the deal has been closed, especially if you will be using credit, as it can affect your mortgage qualification.
Step 10: Closing
Once all of the above steps are completed, you will be on your way to the closing table.
Every transaction varies, but plan to sign a ton of paperwork and your attorney can guide you through the process.
“Lodgement at the Deeds Office is controlled by the Transferring attorney, and then registration takes place. This is when the deed to the home is transferred from the seller to the buyer,” Vandayar said.
“This entire process, from your offer being accepted to the property being registered onto your name, normally takes about 6-8 weeks, all going well.”
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