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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 |
