Expert advice: A guide for first-time property buyers
Are you thinking of buying property? Make sure you are knowledgeable about the process and all the costs involved to avoid making costly mistakes.
Nompumelelo Xulu, the Founding Director of NS Xulu Attorneys, has great tips that will help you make the right choice when it comes to buying property.
Purchasing a property may seem to be an onerous and expensive task; however, it remains one of the best investments one can make in their lifetime. The first thing to consider is whether you want to purchase a stand-alone home, a home in a sectional title scheme or a home in a gated estate, as the popularity and demand of these has increased over the years.
Advantages and disadvantages to consider:
An advantage of purchasing a stand-alone home is that you have a greater degree of privacy and freedom, but the disadvantages include the expense of maintaining the home which can be exorbitant, especially if the costs are unexpected; and it is recommended to have adequate security measures in place as a deterrent for criminals.
The advantages of purchasing a unit in a sectional title scheme are that plumbing and electrical services are usually available on call, and sectional title schemes normally have back up facilities for power and water supply in the event of disruption of these services. However, the disadvantages are that there is limited or no freedom of renovations to the structure of your home and there is normally no space to develop interests such as gardening and the like.
An advantage of purchasing a home in a gated estate is that the security measures are of a high standard and there is restricted access to your home from unwelcome guests. One of the disadvantages of living in a gated estate is that it is expensive because it also requires the payment of levies on a monthly basis to the homeowners’ association to cover the costs of running the estate.
To use an estate agent or not?
The option of using an estate agent is entirely up to the parties wishing to sell their property. The purpose of an estate agent is to link the seller with the purchaser by conducting the search to find homes that suit the purchaser’s needs, whilst acting in the seller’s best interests. There are definite advantages to using the services of a professional estate agent.
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Costs – what am I liable for?
The purchaser will be liable for the payment of the purchase price - this can either be paid in cash or by way of a deposit; with the balance usually loaned from the bank and secured by a mortgage bond. The purchaser must also pay for the transfer costs to the conveyancing attorneys attending to the transfer and the costs for obtaining a rates clearance certificate, as well as a levy clearance certificate in the case of a sectional title scheme or a gated estate.
Further to the certificate(s), the purchaser must pay for the conveyancing fees, deeds office fees, and registration fees as per the recommended fee guideline and miscellaneous disbursements.
If the purchaser obtains a loan, then payment of the bond costs to the attorneys registering the bond on behalf of the bank will be borne by the purchaser and will include attorney’s fees in accordance with the recommended fee guideline, miscellaneous disbursements, as well as bank valuation fees.
The purchaser will also be liable for a share of the rates (and levies in the case of a sectional title scheme or a gated estate) upon registration of the transfer of the property.
The seller will be liable for the payment of the amount required to cancel any existing mortgage bonds they may have on the property, bond cancellation costs to the bondholder’s attorney, selling commission due to the estate agents, outstanding rates and levies on the property, as well as the costs for obtaining the required electrical compliance certificate, borer certificate, and gas certificate (if applicable).
Time frame:
The time frame for the property to be transferred and registered into the purchaser’s name from the date that the deposit is paid is normally six to eight weeks.
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