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Things to look for when buying a property

To view properties for sale in South Africa, click here

Getting a "Pre Approved" bond will make it easier for you to buy a property. Most bank do not really issue a "Pre Approved" bond anymore, but at least let the bond originator have a look at your financials and tell you in what price range you can buy. In business there is no place for sentiment. So, do not only apply at the Bank with whom you have been banking with for the past 60 years because they give you good service. Every % you get discount will mean more money in your pocket at the end of each month (on R800000, 1% discount = about R800.00/month saving). The best and easiest way to apply for a bond is through a bond originator. You can apply online with our bond originator of choice by clicking here .They will apply at more than one bank on your behalf and negotiate the best interest rate for you.

I love estate agents and I think they work very hard for their money. But unfortunately their commission is costing you a lot of money. Although they say that the seller pays the commission, it is not always true. If I want to sell my home, I tell the estate agent what price I want in my pocket and they add their commission on top of that. So in the end it is YOU, the BUYER who pays the commission because you pay more for the property than what the seller really wants. I did some simple calculations to show the effect of their commission included in the price you pay. Let's look at the purchase of a R1million property at the current prime rate of 14.5% (Jan-2008). The estate agents normally charge 7% commission, some even higher, but for the sake of my calculation we work on 7%. Thus you pay R1,070,000 for a R1million rand property. First of all your monthly premiums will be about R900 per month more because of the estate agent's commission and what is even worse, over the 20 year bond period you will pay R215,000 more for your property due to the interest charged on the R70,000 commission.

To add to the dilemma the banks are sometimes eager to approve your bond for the purchase price plus costs. For transfer duties you can add at least another R50,000 to the equation. Now with the estate agent's commission and the transfer duties included in your purchase price you will pay an extra R1500 per month on your premium and over the 20 year bond period it will cost you an extra R368,000.

My advice, try to strike a private deal. But be careful, make sure you get the right documentation and expert advice when doing so. Have a look for real estate on Private Property because Private Property assist their clients with the purchasing process. And then if you can afford to do so, pay the duties out of your pocket instead of adding it to the price, unless of course you do not intend to keep the property for very long or if it is an investment property where the tenant will cover your bond for you. See if you can find a bond originator who are willing to pay the bond registration cost out of his commission. This can safe you another R10,000 . One such originator I use is DIYBonds,
see www.diybonds.co.za

The outside of the house


Look at the structure of the building. Look for cracks in the wall, especially cracks on the corners of the house.
Look for paint on the outside of the wall which is pealing. Pealing paint at the bottom of the wall in a horizontal line above the ground sometimes indicate a damping problem. This means that the wall sucks moist from the soil around it.

Pealing paint in the facility of piping normally indicates a leaking pipe inside the wall.  If you are not the technical type of person, you might consider getting a professional inspection team to inspect the property on your behalf. This is going to set you back about R3,000 but if you are serious about the property it is worth every cent. If you buy a house of serious structural problems it can cost you far more than this little fee. You can have a look at http://www.inspectahome.co.za/ or http://www.snag-a-home.net/

Does the  outside wall need repainting and repair?

What is the condition of the roof? Is it a steel or tile roof. Repainting a roof is a very expensive exercise, so be sure the roof is not rusted or pealing. A tiled roof of which most of the paint is absent and the concrete color of the tile can be observed, also need to be repainted. Also have a look at the ceiling inside the house. Stains on the ceiling or a sagged ceiling normally will indicate a leaking roof.

What is the condition of the gutters?

What is the condition of the driveway?

What is the condition of the garden. If you move from a apartment to a house, remember that watering a garden might cost you more than you think. A borehole is a major advantage.

What does the pool look like. Is it a concrete or fiber glass pool? If concrete, look for cracks in the pool. Refurbishing a cracked pool might cost you in the region of R18000 or more. Is the pool pump working?

Are the window frames rusted or do they need to be painted. Does the sliding doors work. How many windows are broken? 
Are the garage doors and gate motor (if applicable) working properly. A normal rolling garage door might cost in the region of R1600.00 and a new sliding gate motor R2800.00

The inside of the house

If you look at the property in general, keep in mind that the general artesian currently charge anything from R150.00 per hour for labour. 

The cheapest tiles will cost you, with all costs taken into account, at least R100 per sqr meter. This includes labour and material. This amount is the bare minimum. 

How many doors are broken? Do they open and close properly? Key to doors and closets? (cheap inside doors, fitted, go for about R250.00 minimum each)

In what condition is the carpets and tiles? The cheapest tiles will cost you with all costs taken into account, at least R80 per sqr meter to do. This includes labour and material. This amount is the bare minimum. 

How old is the heating and/or cooling system. Older under floor heating (installed approx 1970-1980) consume a huge amount of electricity. These old under floor heating systems were casted in the concrete of the floor. Thus it have to first heat up all the concrete before radiating heat to the room itself. Modern "under carpet" or "under tile" heaters are much more sufficient and uses a lot less electricity.

How old is the stove? Is it still in a working order?

Bathroom: Look for loose tiles on both the wall and floor. If you knock on the tiles on the wall and it sounds hollow, it is most likely lose. Is the bath's inside surface still smooth and clean. Are there any water leaks? 

Have the owner obtained a electrical certificate yet?

Are there enough electric plugs in each room for your use?

Does the house come with a security system, what is the monthly installment?. 

Are there burglar bars on windows and safety doors on the doors?

Look for pealing or flaking paint. Pealing or flaking paint can be an indication of a water leak on the internal piping system or other water problems. To repair an internal water pipe is an expensive exercise since the wall have to be opened in order to repair the pipe.

 


Things to think of before you decide!

 

Will the seller be prepared to repair problems pointed out to him. If not, will your budget allow to fix it yourself?

Will your furniture fit in the new rooms?

Is there sufficient space to extend the house if necessary?

In the case of a sectional title (normally apartments, duplex or simplex) What is the monthly levy and what is included in the levy?

advice on selling your property

 

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