1. Why do I need an estate agent?
2. Should I first get bank pre-approval?
3. What about the interest rate?
4. What are the pros and cons of buying a bank repossessed property?
5. Where do I start when I'm looking for my ideal home?
6. How much should I budget for my new house?
7. What is in a Sales Contract?
8. How do I apply for a home loan?
9. What about the Electrical Installation Regulation?
10. What is "Occupational Rental"?
11. What is a sole mandate?
12. What is movable property, and what is immovable property?
13. How much can I afford to spend on a house?
14. What market price should I ask for my house?
15. How can I make my house more attractive to buyers?

1. Why do I need an estate agent?

An estate agent's job is more than just showing you homes you might be interested in. Just as important as finding your new home, is coming to an agreement with the seller, and arranging a home loan that suits your financial situation. It is the estate agent's job to ensure that these things are taken care of quickly, and to guide you through the process.

There are many pitfalls to buying and selling real estate without engaging a professional estate agent.

For example, a buyer needs to know what hidden costs there are to purchasing fixed property. You may ask yourself "How will I know I am viewing the best properties in the area? Who will explain the Purchase Agreement, and how will I know I can trust that person? How can I spot a latent or patent defect in a property? Who will explain the implications of putting my signature to any document? Do I have the expertise to co-ordinate a smooth transaction from purchase to registration of the property?"

As a seller, you may ask yourself "When will I allow a stranger to enter my home? How will I qualify a buyer? How much deposit should I require, and when will this deposit be payable? How long does it take to secure a loan? What special conditions should be included in the contract? Do I have the negotiating skills to ensure the best possible price?"

2. Should I first get bank pre-approval?

It is advisable to first approach a trusted agent to secure a bank pre-approval certificate. With this important document, a buyer can negotiate almost as powerfully as a cash buyer. In some cases a seller may rather accept a lower offer from a pre-qualified buyer than a risky, though maybe higher, offer from an unqualified buyer.

3. What about the interest rate?

A purchaser can, in many cases, negotiate his rate. Factors which determine the interest rate a financial institution will offer, are:

1. Income and professional status.
2. Availability and size of a deposit.
3. Credit history of the applicant.
4. Affordability - the extent to which the applicant is committed to other monthly payments.
5. Age.

4. What are the pros and cons of buying a bank repossessed property?

• No transfer duty is payable to the Receiver of Revenue, which can save the buyer many thousands of Rands (typically about 7% of the purchase price). The buyer will, however, still be liable for attorney's fees.
  
• Banks do not give any guarantees or warrantees on repossessed properties.
  
• Most banks do not supply an electrical compliance certificate.

5. Where do I start when I'm looking for my ideal home?

Step 1. Ask yourself why do you want to buy a home?
Step 2. What kind of home would you like to have?
Step 3. Where would you like to live?
Step 4. What must you have, and what would you like to have?
Step 5. Important things to look out for!

Step 1: Ask yourself: Why do you want to buy a home?

• Is your current home too small? Need more space?
• Do you want to move to another neighbourhood or area?
• Tired of paying rent?
• Do you want to have a place of your own?
• Are you buying simply as an investment?

Also ask yourself:

• How long do you expect to live in this home?

Step 2. What kind of home would you like to have?

• Do you want a sparkling new home, or a 'fixer-upper'?
• How large should your new home be (number of bedrooms, bathrooms, garages) and will you need more space in the foreseeable future (nursery etc.)
• Think about home styles (single story, townhouse, high or low maintenance).

Step 3: Where would you like to live?

• Firstly, and probably most importantly. Someday, you will want to sell. Is the area good for resale?
• List firstly which city and secondly the suburb.
• The neighbourhood. Do you prefer an older, more settled neighbourhood? Do you need to be or would like to be near a particular school, shopping mall, day care centre, church, library or other community services?
• How far are you willing to commute to work? What would the traffic be like?
• Is the property near to a highway or a busy road?

Step 4: What must you have, and what would you like to have?

Here you could list what other features are important to you. For example:

• Swimming pool?
• Quality of finishes and features in the kitchen and bathroom.
• Quality and design of fitted carpets.
• Electrical sockets (how many are necessary). Hot water geyers.
• Burglar bars, burglar alarms or other security features.
• Access to outdoor areas i.e. sliding doors.
• Size and placement of windows. Views from the windows.
• Indoor heating and air conditioning.
• Facing towards the sun.
• Outdoor paving and garden area.
• Established lawn, garden and walls.
• Borehole or irrigation system.

Step 5: Important things to look out for!

It is important to check the condition of the roof, gutters and drain pipes, and plumbing (do all the taps actually work!) Look for serious cracks or damp in floors or walls. Signs of termites or wood rot.

Try to view the property during week and weekend, and during the daylight, not only in the dark!

Check with the local authorities for plans of possible shopping centres or highways in the near future.

6. How much should I budget for my new house?

When you are budgeting for your new house, there are two types of costs involved:

Once only costs:

• Deposit on your new home;
• Conveyancing (attorney's) fees, bond registration fees;
• Municipal deposits for water and electricity; telephone;
• Also: Cost of moving, new curtains and carpets etc.

Regular monthly costs:

• Repayment of home loan;
• Insurance on your home;
• Municipal rates and taxes or
• Monthly levy if you buy on Sectional Title.

7. What is in a Sales Contract?

The signed 'Offer to Purchase', or more commonly known as the sales agreement, is the document you sign which presents your price and terms to the seller. It must be completed in full, because when the seller signs it, the document becomes the binding 'sales contract' which contains the conditions of the sale. If you forget something in the offer, you can't usually add it to your sales contract later.

Terms and conditions of the contract vary depending on the situation. You and the seller may negotiate and agree on:

• what items go with the home, such as curtains, appliances, swimming pool equipment etc.
• the sale price of the home
• the amount of your deposit
• the amount of the home loan you will endeavour to obtain
• the date of occupation.
• any conditions agreed upon by you and the seller which must be met before settlement can take place, such as: improvements (painting, roofing, etc); your ability to obtain a specified home loan within a specified time, or sell an existing home.

8. How do I apply for a home loan?

Your agent can assist you in making application to a financial institution for a home loan. There are many flexible financial packages available to borrowers, along with variable interest rates, or capped options.

You may buy a home with another person, if you are not married. The property will be registered in both applicants names, provided they have contractual powers.

The institution will require all your personal particulars, and a statement of assets and liabilities. Other documentation required is usually (where necessary):

• Proof of income
• Marriage certificate
• Original Identity Documents
• If divorced, copy of Decree of Divorce
• Copy of Deed of Sale or Offer to Purchase

However:

You should ideally be over 21 years old and have full-time employment. The monthly repayment should not be more than 30% of your gross income per month. You should have a clear credit record and be able to afford the property.

9. What about the Electrical Installation Regulation?

In October 1992, the Machinery and Occupational Safety Act 1983 (Act No 6 of 1983) was amended to include a schedule regarding electrical installations which came into operation in January 1994.

In terms of this legislation the user of an electrical installation is responsible to ensure the safety, safe use and maintenance thereof.

The user is obliged, prior to sale and letting of property to obtain a Certificate of Compliance from an accredited electrical contractor registered with the Electrical Contracting Board of South Africa. This certificate can be transferred from the user to the next party.

10. What is "Occupational Rental"?

If one of the parties is in occupation of the property whilst it is registered in the others name, it is usual for the agreement of sale to make provision for the payment of occupational rental during that period.

The exact amount and date of occupation should be clearly stipulated in the contract.

11. What is a sole mandate?

Under a sole mandate a seller instructs a particular Estate Agency to find a buyer and no agent from any other company may market the property during the sole mandate period.

12. What is movable property, and what is immovable property?

A general rule is that most things that are screwed in, bolted, nailed or attached to a building are regarded as permanent fixtures and fittings.

Although some objects may appear to be movables, for example, loose bar stools which are part of a built-in bar, they may not be removed by the seller if they are part of the object as a whole.

All keys, light fittings, light bulbs, fitted carpets, curtain rails as well as the rings are regarded as permanent fixtures.

It is important to note that loose standing kitchen and study units remain movable albeit that visually they appear to be an integral part of the property. If the purchaser intends to submit an offer to purchase which incorporates these features, this must be stipulated specifically in the Agreement of Sale. The same provisions apply to swimming pool equipment, M-Net aerial and a satellite dish.

A simple way to avoid confusion is to state clearly at the time of mandate, as well as in the sales contract specific details regarding this.

13. How much can I afford to spend on a house?

Calculate what your monthly repayment will be.

Calculate how much you can afford to spend on a house.

14. What market price should I ask for my house?

The difference between 'Listing' your home and 'Selling' it is usually PRICE!

The value of a home is determined not by what the owner has invested in the property, but by what a willing and able purchaser will get out of it.

Principles to keep in mind when considering price:

• Cost - The amount actually paid for a property plus any capital improvements made since the purchase.
• Price - The stated amount an owner is willing to accept for a property.
• Value - The amount a Buyer is willing to pay, given a certain set of circumstances.
• Market Value - The amount that will bring a sale between a willing Buyer and a willing Seller. It is based on the history of similar properties recently sold in the area.

15. How can I make my house more attractive to buyers?

1. Inside your Home
2. Patio and Outdoor Living area
3. Do that bit Extra!
4. Seller's Sweeteners

1. Inside your Home

Kitchen and bathrooms should be spotlessly clean! Even a minor facelift - fresh paint, new floor tiles and new cupboard doors, for example - will pay off in a faster sale at a better price. It is usually better to keep to light neutral colours when renovating.

Make sure countertops are clean and uncluttered, and cupboards tidy.

Bedrooms, family rooms and sun rooms. Pack away unnecessary items and keep the floors clear of toys! Create space, where possible, and open the curtains to let the sunshine in.

2. Patio and Outdoor Living Area (pool)

Water tends to add a feeling of tranquility to any home - whether for entertaining guests or merely appreciating that well-earned leisure time. What better way to spend a summer weekend with family and friends than outdoors next to the pool!

However, keep your pool sparkling clean. Paint and repair garden furniture and brighten up with pretty cushions.

First impressions count! Keep your lawn neatly trimmed and mowed.

3. Do that bit Extra!

Repair all those smaller things that you've lived with for years! Broken light fittings, leaky taps or loose doorknobs should be repaired, for a quicker sale.

Remember, buyers won't always love your pets as much as you do!

4. Sellers' Sweeteners

Once your home is in beautiful condition and you have priced at a competitive price, a smart seller will want to give themselves an extra edge.

Be flexible about date of occupation, or occupational rental. It may mean a sooner move yourself, to accommodate your buyer.

Consider including in the purchase price, furnishings especially suitable to the home, or curtains tailored to specific windows. You may also include terracotta pots or garden furniture.

Disclaimer: All information and calculations appearing on these pages should be used as guidelines only. Although every effort has been made as to accuracy, we offer no warranty whatsoever, whether expressed or implied.