Tips to prospective home buyers from Alexander Swart Property and Nedbank Home Loans
Category Advice
A recent session on Good Hope Breakfast Radio in which he and Ms Lephoi Mokgaple, CEO Nedbank Home Loans Digital Sales, answered pertinent questions related to the purchasing of a home has once again shown how deeply interested and how relatively ill-informed the general public is on property matters, said Rowan Alexander, Director of the Cape Town estate agency, Alexander Swart Property. This, he said was a pity because the fear of making the wrong choices led to many who could afford to be in this market, holding back and losing out on good investment opportunities The questions put to him and Ms Mokgaple, he said, are more or less the same no matter when or where he deals with prospective buyers, and no matter what income group the buyers come from.
The show was hosted by Ms Geri Saunders, who said she had fielded queries from a wide variety of sources before. One of the most important had been from a member of the Good Hope team who is himself weighing up the pros and cons of a residential property purchase.
First on the list, said Saunders, was the question of whether to buy into a new project - possibly one not yet built, or a second hand home that has already had one or more owners. Alexander said that there can never be one all-embracing answer to this question; much will depend on the individual purchaser's need and here he said, a good estate agent can help the buyer define what he needs rather than what he dreams of having. For many buyers closeness to reputable schools and/or transport may well be factors of paramount importance, while others will want above all to be within easy travel times of their places of work. For some a garden is a sine qua non; others will be more than content with a lock up and go sectional title apartment. A good estate agent, said Alexander, will assist the buyer to define his needs rather than his wishes and, with the aid of a bond originator, help him calculate what he can afford.
Once these matters have been settled, in most cases with some compromise, it should be accepted that most new developments, although on paper possibly more expensive than older homes, come with two great advantages: the buyer does not have to pay transfer duty (which is often underestimated by buyers new to this type of transaction); and his repair and maintenance costs are likely to be minimal in the first years of his occupation. With an older property, no matter how good it looks on first viewing, said Alexander, it has to be acknowledged that the "life cycle"/maintenance costs are likely to be ongoing from very soon after the purchase and may include major outlays for repairs from an early stage.
If the decision is to opt for a new development, especially one being launched on the plot and plan system, said Alexander, the buyer should investigate the developer's track record. Did his previous projects conform to the design and other promises (e.g. the specification details and communal facilities) made at the launch in the original marketing material? Did buyers later find that the pricing had somehow included a number of extras of which they were not aware? Did the handovers conform to the original schedule? And do the banks providing the finance and/or the bonds for purchasers still support this developer? There are, said Alexander, many good developers who over the years have brought quality homes to the market, to the benefit of their clients and themselves. However, there is also always one or two who, attracted to this field of entrepreneurship, "give it a go" even though they lack the experience to make a project successful. With the help of a bank involved in his field and a good estate agent it is not difficult, said Alexander, to dig up the facts and then make an informed decision. Asked if it is possible to bargain with a developer on the list price of a new development, Alexander said that in most cases the price is unalterable. However, once the developer has met the banks' sale figures (i.e. the number of properties to be sold before they will agree to fund the development) he may well be open to negotiations on the conditions of payment.
Explaining the steps that a buyer has to take once he has decided to take the plunge, Mokgaple said her team will first check his credit worthiness and his record on paying his debts. If they then decide that his current earnings and financial position enable him to afford the proposed purchase and his offer is accepted, they will, with the help of the agent and the conveyancer, draw up an Agreement of Sale. This she emphasized, is a binding document in which there are likely to be a whole range of clauses and conditions, every one of which has to be met. Matters such as the occupation date, occupational rental and the fixtures accompanying the home are not open to negotiation later in the sale process. Alexander corroborated this: it quite often happens, he said, that the seller will verbally agree with the buyer that X or Y will be part of the deal but if this has not been PUT IN WRITING, the offended party will have no recourse in law if the promise is not fulfilled. He advised buyers in particular, to get all additional agreements listed in the Sales Agreement. Mokgaple then mentioned the many ways in which an approach to Nedbank Home Loans can be made, from online via their web to liaising with a branch.
With time running out Saunders was able to accept only one further question. This related to purchasing a property as a joint deal with two or more partner buyers. Alexander said that this is wholly acceptable to the banks and fairly frequently done. When couples are married out of community of property, it is the usual method of purchase, but it is also regularly resorted to by couples living together or simply in a business agreement.
For further information, please contact Rowan Alexander on cell phone 082 581 3116 or by email: rowan@asproperty.co.za
Author: Independent Author
