If you’re thinking of buying a home for the first time, and you missed our podcast “Your Key To Property – First-Time Home Buying Tips”, take a read through our blog, we’ll catch you up to speed.
Embarking on the journey of home buying can be both exciting and daunting, especially for first-time buyers. To help navigate this intricate process, we’ve compiled invaluable insights from two industry experts – Charles Thompson, Director of the Devmco Group, and Pam Naidu, Director of Sales and Marketing at Devmco Realty. Their advice is sure to guide you through your home buying journey and help you understand the nuances of the property market.
When it comes to purchasing a property, one principle stands out – “location, location, location.” According to Charles Thompson, location is a three-tier concept. It begins with a macro-level consideration of the broader area, then a micro-level examination of the most favourable spot within that location. For buyers intrigued by the concept of estate living, additional aspects, such as proximity to green belts or views, come into play. This golden rule acts as a solid foundation for your home buying guide, setting the stage for other factors to be considered.
While the location is of paramount importance, Pam Naidu emphasises another crucial aspect often overlooked by first-time buyers – financial stability and affordability. First things first, having a good credit score is vital for home buying as it directly influences your mortgage approval and interest rates.
It’s crucial to establish a realistic budget, consider existing debts, and ensure your credit score is in check. Establishing a realistic budget helps not only in assuring financial stability but also in identifying affordable homes that match your financial standing.
Choosing a realtor you trust, or a reliable real estate agent should be key in your first-time buyer journey. A trustworthy agent will help you negotiate contracts, schedule tours, and, most importantly, be a valuable partner throughout the process.
Another critical step in the process that is often under-emphasised, is understanding pre-approval letters and then obtaining said pre-approval letter before you start shopping for homes. Pam highlights how a pre-approval letter sets a realistic expectation of what you can afford, preventing any surprise elements later on.
One of the most complex aspects of buying a home are the additional costs that arise, such as closing costs and transfer duties. Closing costs are often neglected until the last minute, leading to potential budget overshoots.
Similarly, understanding transfer duties and fees, an essential part of the home buying process, can be quite daunting for first-time home buyers. It’s crucial to make a distinction between these two as they have a significant impact on the total cost of buying a home.
Transfer duties are a tax levied by the government when ownership of property changes hands. In South Africa, this typically amounts to about 9-10% of the total purchase cost. This means if you buy a home worth R2,000,000, you could expect to pay transfer duties of around R180,000 to R200,000. This can be a substantial amount, especially for first-time buyers.
On the other hand, transfer fees are legal and administrative costs you pay to attorneys to get the property registered in your name. These usually make up about 3% of the total purchase cost. For a R2,000,000 home, this would be approximately R60,000.
Adding to the complexity, certain types of property purchases, such as off-plan developments, only require transfer fees, not transfer duties, making them a more affordable option for some buyers.
Make sure you understand and incorporate both transfer duties and fees into your holistic budget. It will not only provide you with a more accurate estimation of the total cost of your new home but also save you from last-minute financial stress.
Remember, most attorneys’ websites provide calculators where you can plug in the purchase price to get a detailed breakdown of these costs. This can be a handy tool in planning your budget and understanding the true cost of home ownership.
Moving on from financial aspects, we delve into the appeal of estates. According to Charles, estate living in South Africa offers an unbeatable blend of convenience, safety, and lifestyle.
For families, estates present a harmonious lifestyle with the added benefits of maintained common amenities and heightened security – the cornerstone of a happy and stress-free living experience.
“It’s the ability to run around the estate of an evening, or on the weekends and experience that complete freedom and safety.” Said Charles.
A buzzword you may come across in your research is “mixed-use precinct”. It refers to a property that has diverse zoning uses within the same precinct, such as residential, commercial, retail, and more. This concept is gaining popularity as it embodies the “live-work-play” lifestyle, providing modern homeowners with unparalleled convenience.
Traditionally, property viewings were held on Sundays. However, Pam notes that in the current dynamic market, agencies like Devmco Realty operate seven days a week, offering potential buyers the flexibility to visit at their convenience.
Buying a home is complex, but with the right help, it can be a rewarding experience. The insights shared by Charles and Pam serve as a comprehensive guide for first-time buyers, answering burning questions and offering advice that could potentially save you from common pitfalls.
No matter where you are in your home buying journey, remember that asking the right questions and doing your homework are crucial steps towards finding your perfect home.