So you’ve made your calculations with your home loan calculator and you’re out there viewing houses and getting all excited about what you see. At some point you’re going to have opportunity to talk about the house you’re interested in with the agent. If you’re anything like me you sit staring at the agent with mouth open like a guppy and your best questions dribbles down your chin as they gush madly about the house in question. Then you drive home confidently reciting some the most incisive questions know to man. Perhaps you should come prepared.
Don’t be afraid to ask questions, you’ve gone to the trouble of using your home loan repayment calculator, don’t hold back with your research now. Whether you are looking to rent or buy you will be parting with a significant sum of money and you are well within your rights to have any of your questions answered.
Here are some important questions you should ask the agent before you sign on the dotted line. They are not necessarily in any particular order.
What are the rates?
This will help you calculate your budget should you want to look at making an offer for the property.
Is there a levy?
This is a particularly important question to ask if you are looking at a flat within a residential block or a unit in a sectional title complex.
How long has the property been available?
The longer the property has been on the market the more likely that it is overpriced or has some other problem. Having this information empowers you when it comes to negotiating a price – for example, if it’s been on the market for a while, the vendor or landlord is likely to be keen to come to a deal and so may settle for less than the asking price.
Why is the property available?
Hopefully the answer will be something that is not related to the standard of the property. For instance, if the current residents are looking to move because they have out grown their home or need to relocate then consider if you would be in the same position if you moved in.
How long did you/the previous owners/tenants live here?
The longer the better. If there have been many different residents in a short period of time, why did they not stay longer?
Has there been any recent improvement work on the property?
Recent work can be viewed both as positive and negative. If the house has just had new windows or guttering that may be a plus. However, if it has been underpinned to prevent subsidence this may prove to be a significant negative.
Is there a neighbourhood watch?
While the answer won’t necessarily tell you how safe the neighbourhood is, you should get a good idea if neighbours look out for each other if there is an active scheme in place.
What are the neighbours like?
Although you are unlikely to be told directly that you are set to move next to neighbours from hell, the reaction you get from the landlord or homeowner should give you some idea what the local residents are like. Does she run a trombone recital club or a day care? Does he service cars or use loud power tools all day?
How many viewings have they had?
More viewings indicate a greater interest in the property, however, if none of the viewings have resulted in an offer does this show that it is too expensive or has another issue. Again, getting this information also gives you more ammunition for price negotiations.
What is the local traffic like?
This is especially important to ask if you have to commute to work by car. Again it’s unlikely that they will complain about heavy traffic but you may pick up some clues in the answer as to whether there is a problem.
When is the noisiest time of the day?
Any mention of aircraft or traffic noise? Is the house on a minibus taxi route or near a taxi rank? What about proximity of shops, clubs and restaurants that may have high noise volumes at certain times of day.
How old is the roof?
Firstly, are there leaks and where? Roofs only last for a limited time so it’s worth checking just how old the current one is. The older the roof the more likely it will need work, which may be quite costly.
When was the last time the geyser needed repairs or has been replaced?
Geysers sometimes malfunction due to electrical faults or water pressure issues. Is the current geyser under guarantee?
Has the property ever been burgled?
Unfortunately if a property has been burgled in the past it can often be revisited again. If they have been burgled on more than one occasion then it’s even more likely that it will reoccur. It’s also a good idea to ask what security measures the property is fitted with – for instance an alarm.
Are there any issues that I need to know about?
Certain problems, such as if a property has been underpinned for subsidence, must be legally declared, however asking this question should ensure you know if there is anything else that you’re not being told. Ask about rising damp and faulty drains.
How old is the septic tank?
Not all South African towns have waterborne sewerage. Septic tanks have a life span and they often need draining. They are also attacked by nearby roots. Ask to see where the tank is in the garden and look how closely trees are planted.
How far is the property from local amenities?
Can you easily walk or drive to everything you need without a problem?
This list is by no mean exhaustive but they all make up a body of research that you began when using your bond calculator. Keep in mind that agents are paid to put the best face on a property not to be dishonest. Most agents may be honest about most things but they are unlikely to volunteer information that will paint the house in a bad light. So take your list of questions with you and write down the answers as you hear them. Happy house hunting.
When considering a mortgage bond from a bank to buy your dream house you may find yourself bogged down in a swamp of legal terms and bureaucratic mumbo jumbo. Not everything is as straight forward as your bond calculator.
The Bank’s assessment of a Buyer’s ability to afford monthly instalments based on their income.
The amount payable by the Seller to the agent for work done on marketing and selling a property. This is a percentage of the selling price.
The price at which the Seller is offering their property for sale.
A certificate issued confirming that a structure is free of wood borer or termite infestation. This is a legal requirement when selling.
A lending agreement between a Buyer and the Bank. The legal bond document states that the Bank will lend an amount of money in the form of a bond.
Online software used to calculate estimated repayments on a bond. Input data is required, for example the desired monthly price. The sales price is then automatically adjusted enabling the user to appraise his/her position in the market place.
Bond Cancellation Cost
Costs accrued during the cancellation of a bond. These include an Attorney’s registration fee and a Deeds Office fee.
The Attorney who attends to the cancellation of the Seller’s bond and is appointed by the Bank with whom the current mortgage bond is held.
A tax charged for the transfer of property from the Seller to the Buyer.
A Conveyancing Attorney will attend to Deed Office transactions such as the transfer of a property from a Seller to a Buyer.
Cooling Off Period
The 5-day period after the Offer to Purchase has been signed during which the Buyer of a property has the right to cancel this agreement.
A detailed score card of an individual’s credit history prepared by an official credit bureau. This report will determine your risk as a borrower.
A ratio which shows a Buyer’s monthly payment obligation to debts and which is divided by gross monthly income to ensure affordability.
The Estate Agent is a person who is authorised to act as an agent for the sale of land or the valuation, management, or lease of property.
The Financial Intelligence Centre Act, 2001 was formed to regulate money laundering and requires valid information to be presented to the Bank.
An agreement between the Buyer and a Bank, where the Bank lends the Buyer money in order to purchase property.
Home owners Insurance
An insurance policy that covers your house (structure and property) in the event of damage or loss.
The monthly amount paid to the lender as part of the total home loan amount. Instalments run for the entire duration of the agreed term.
A percentage interest is added onto the amount of money borrowed from a Bank. This amount is fixed for a period and is based on the amount of money borrowed.
Someone who acts as an intermediary between the Buyer and a Bank, for the purposes of arranging a home loan.
Taxes paid to the municipality by property owners.
This is your yearly income after taxes.
A charge applied to the Seller for occupying the property after registration has taken place or to the Buyer for occupying the property before the registration has taken place.
Offer to Purchase
A legally binding document signed by the Buyer and Seller stating the agreement of the sale and its conditions.
A document issued on a monthly basis by your employer as proof of your monthly income.
When ownership of a property legally changes hands from Seller to Buyer, through registration of the property at the Deeds Office.
The amount paid for the purchase of a property as set out in the Offer to Purchase agreement. This can be worked out retroactively by using a bond calculator.
Someone who meets a Bank’s requirements of affordability and has qualified for a home loan.
The Attorney who attends to the registration of the new bond into the name of the Buyer.
The number of months allocated to pay off a home loan. The maximum repayment term is 30 years. This can be easily calculated with a bond calculator.
An entire property of flats or townhouses. The property is divided into individual units and sold separately and runs under a Body Corporate.
Subject to Sale
When a sale of a house becomes binding and unconditional then certain conditions are met, such as bond approval.
The legal document which states ownership of a property. The Title Deed is filed at the Deeds Office and contains details of the property.
Services provided by the government for your use at home. Utilities include: water, electricity, telephone service and other essentials.
Refers to a property sold “as is”. After a sale of property, a Seller is not liable for defects following a reasonable inspection of the property.
Print this list out and keep it handy when those terms start flying around that you’re not too familiar with. Remember to refer to your bond calculator as the figures start coming at you. With both your bond calculator and your glossary of terms you’re all set to go house hunting.
So you want to buy a house. House hunting is all about the viewing. Here’s how to make sure a property is really worth your money.
Upon determining your bond repayments with your bond calculator it’s time to start looking around. Looking around a property that could become your new home is exciting, but you can’t afford to get swept up in fantasy, sales pitch and the pressure to purchase…
Failure to use the viewing time effectively and you could miss something that ends up costing you dearly.
Here are ten tips that will help you see what’s really up for sale behind the agent’s sales talk.
1 View during the day
Make sure to view the property at least once in daylight so that you can see it with clarity. If your first viewing was unavoidably at night, push for another viewing in daylight before making an offer. Similarly if you have viewed the property during the day and want a better idea of what the area is like in the evening, you could arrange a second viewing later in the day.
This will give you an idea of how light the property is at different times of the day, how loud the neighbours are and what the neighbourhood is like once evening sets in.
2 View with company
The more pairs of eyes you have looking around a property the better.
If you attend a viewing alone then it’s likely you will be lead around by an agent who do their best to highlight the positive features of the property, not giving you the chance to look closely.
So even if you will be living alone, take a friend or relative to view the property with you as they may spot something you miss.
3 Examine the exterior.
It is easy to get caught up examining the inside of a property and forget to take a thorough look at the outside.
Checking the exterior and the roof as well as the pipes and drainage is essential; if there are any problems they could be expensive to fix.
If any work needs doing you may either want to arrange a professional survey if you are looking to buy, or look for a rental property elsewhere.
4 Take your time
The last thing you want is to have to rush around the property because you have another appointment or viewing booked.
You should leave at least 20-30 minutes to view the inside of a property and a further 20-30 minutes to check the outside and the local neighbourhood.
If you are being shown around by an agent or the owner, try and view the property at your own pace and avoid being rushed through.
5 Consider room and space
An empty flat or house will always look bigger than a fully furnished property, so you need to check that there really is enough room.
Check what the property offers in terms of storage space. For instance, are there built in wardrobes in the bedrooms, or would you need to have space for a wardrobe in each room?
Would your bed, couch, dining table and drawers all fit comfortably or would you be blocking plugs and windows and so on?
In the kitchen, are the white goods built in or would you need to use vital space for a fridge, washing machine or dishwasher? What about the cupboard space, is it expansive enough to fit all of your pots, pans and crockery?
6 Arrange many viewings
Making sure you go back to view a property after the first look can help make sure that you don’t miss any potential issues and ensures that your know exactly what you’re getting for your money.
It also gives you the chance to ask the agent or owner any specific questions that you have after looking around the first time and to negotiate on price if needs be.
7 Take pictures
Taking lots of photos, or even a video, is a great way of ensuring that should you miss something you then have a personal record of the viewing to look back at.
It also means that you can look back at the property and compare it to others you’ve seen in your own time without the pressure of going around with a letting or estate agent.
However, make sure to ask permission before you start snapping away. Although letting agents and estate agents will not usually have an issue with you taking photos, if the owner still lives in the property it is only polite to check.
8 Watch out for damp
Damp can be serious concern regardless of whether you are looking to buy or rent a property, simply because it may illustrate more fundamental problems.
Signs of damp include a musty smell, peeling wallpaper or bubbling paint and mould or dark residue on the walls and ceiling.
If you suspect that the property suffers from damp it need not be a deal breaker but should definitely be an issue you raise with the agent and investigate further.
Any cracks or signs of subsidence may indicate a much more serious problem with the property so make sure you look out for these too.
9 Examine everything
When you are looking around a flat or house, don’t be afraid to test the fittings and fixtures.
Check that the windows open easily and that there is suitable water pressure throughout the property by testing the showers and taps. You are also within your rights to check things like the level of loft insulation, the wiring and electrics during a viewing and it’s a good idea to do so.
Although you may feel awkward testing things in this way, any issues you spot at viewing can either be fixed before you move in or be used to negotiate a reduction in price.
10 Ask the hard questions
Don’t be afraid to ask questions, whether you are looking to rent or buy, you will be parting with a significant sum of money and you are well within your rights to have any of your questions answered. For example ask about rates, previous renovations, traffic, neighbours, burglaries, state of roof, proximity of schools, state of geyser, the reason why the property is on the market, were there tenants before and so on.