In the market to buy a house? Move quickly but be realistic
How house hunters can avoid common pitfalls
The property market is currently favouring buyers and if you are looking to purchase your own home, you may do well to heed this advice.
The property market is currently favouring buyers and if you are looking to purchase your own home, you may do well to heed the advice of experts to avoid some common mistakes.
Lanice Steward, head of training for Pam Golding Properties, says buyers often miss out as they wait for the market to hit rock bottom before they act. The reality is that the market could turn overnight, she says.
Carol Reynolds, Pam Golding Properties area principal for Durban Coastal, says even though the market may be a buyers' market, well-priced properties are moving quickly. “So, if you find a great buy, don't wait as there are other buyers hovering in the wings for a good deal, just like you,” she adds.
When setting about searching for a property bear in mind that location is always the key – if you buy the worst property in the best area you are much better off than buying the best property in the worst area, Reynolds says.
She advises you increase your buying power by getting pre-qualified, that means if you approach a bank either directly, or through a mortgage originator, the bank will assess whether you qualify for a home loan and will tell you how much it is willing to lend to you.
Steward says you should commit to a property that ticks all your boxes, put in an offer and start the negotiation process.
At the same time, do not assume that every property is overpriced and highly negotiable, she adds. She suggests you don’t make a “cheeky” or unrealistic offer and end up not getting the property because the gap between the asking and your offer price is too great.
Reynolds adds that if the seller’s price is already good, an unrealistic offer will simply get the seller’s back up, resulting in you losing out. Steward suggests you seek the advice of a registered agent.
Agents know the area trends, where to invest and the pro’s and cons of the properties, so you will do yourself a service to seek assistance, she says.
Do your homework before buying
Cheryl Nairn, managing director of CNBuy Properties in Cape Town, which manages sectional title complexes says once you have identified a property in a complex you would like to buy, always obtain the financial statements and minutes of meetings from the managing agent so you are informed about the property and its finances before you put in an offer.
Sales agents to not always have this information available and may make promises that contradict reality. For instance, says Nairn, some new buyers who attended the first AGM of a block that she managers were upset to hear that the block was not scheduled to be repainted after the sales agents made promises in this regard at the time they made their purchases.
Another issue is that buyers do not understand or ask for an explanation of what they own and what they have the right to use in a sectional title complex, Nairn says.
There is a difference between a section, which is what you get ownership to, an exclusive-use area, which you gain the right to use under the rules of the complex and common area, which is owned by the body corporate. This is important when it comes to repair and maintenance costs, Nairn says.
If you are allocated an area for your exclusive use, for instance a garden attached to your ground floor flat, you are responsible for the full cost of repairs and maintenance, whereas common areas used by an owner will mean a 50:50 split for repairs or maintenance relating to that area, she says.
Failing to ask about levies in a sectional title complex is another trap that buyer’s fall into.
Buyers do ask sales agents about the various levies that apply and whether the complex has a maintenance plan in place, Nairn says.
She explains that there is a normal levy which includes your share of the day-to-day running of a property complex in which you own a flat or house, and a maintenance levy for repairs done in the scheduled maintenance plan.
From time to time, the owners in a complex may decide to implement an additional levy for larger expenses such as the installation of electricity meters, or the replacement of old timber windows with aluminium if these items are not part of the maintenance plan.
Since 2016, when a complex initiates a levy to repair or replace something expensive and implements it over 12 months, the current owner pays this levy up until the date of registration and you, as the buyer, will pay from the date the property is registered in your name.
Steward says it’s important that you take care not to overextend yourself and buy above budget because you believe you are getting a bargain. By doing this you might find that you cannot afford to actually live in the house.