Buying a House: A Step-by-Step Guide

1. Determine What You Can Afford

Before beginning your house search, understand your financing options. Start by getting prequalified to know what you can afford. You can do this through services like SA HomeLoans or Ooba Home Loans or using online tools like the Bond Indicator.

2. Assess Your Credit Record

Your credit score is crucial when applying for a home loan. Banks use it to assess your risk level and determine your loan eligibility. A good credit score is 600 or above. Check your score through prequalification with SA HomeLoans or Ooba Home Loans or the Bond Indicator.

3. Hire an Estate Agent

Estate agents can be invaluable to buyers. They provide market insights, handle paperwork, and negotiate with sellers. Find a trustworthy agent through recommendations. Their services are free for buyers, as the seller pays their commission.

4. Find Your Ideal Home

This is often the most enjoyable part. Consider your budget and seek advice from your estate agent. Decide on the neighborhood, proximity to schools and hospitals, and whether you plan to renovate.

5. Make an “Offer to Purchase”

Once you’ve found your dream home and sorted your finances, sign an offer to purchase. This agreement between you and the seller outlines the terms and conditions of the sale. It’s binding, so ensure all clauses are clear to avoid penalties.

6. Arrange a Home Inspection

Include a home inspection in your offer to purchase to identify any defects. Understand your rights, especially concerning the voetstoots clause, which exempts the seller from liability for defects found post-purchase. Decide if you want the seller to handle necessary repairs.

7. Apply for a Home Loan

After agreeing with the seller, apply for a home loan. A comparison service like SA HomeLoans or Ooba Home Loans can help by submitting your application to multiple banks, increasing approval chances and securing better interest rates.

8. Transfer and Bond Registration

Once approved, the seller’s conveyancing attorney transfers the property to your name, and a bond attorney registers the bond. You’ll pay fees for these services. Use a Transfer Cost Calculator to estimate these costs. The process takes about three months.

9. Title Deed Registration

After bond registration, the title deed is registered in your name at the Deeds Office, confirming ownership. The bank holds the title deed until you repay the loan, but you can request copies anytime. This process typically takes 2-3 weeks.

10. Move In

Finally, it’s time to move into your new home. Plan for additional expenses like moving costs and any renovations you might need.