November 2024

Whether you’re a born-and-bred local or new to our shores, buying a house in South Africa can be both exciting and overwhelming. Navigating the property market successfully takes a fair amount of know-how. Here are the answers to some of the most common questions you may ask as you embark on your journey towards buying your dream home in South Africa.

How do I start my home-buying journey?

The first thing you need to do when considering buying a house in South Africa is familiarise yourself with the current property market – research is key. 

Look into various neighbourhoods, property prices, and market trends. Online real estate platforms can provide valuable insights, as can experienced real estate agents in your city/suburb of interest.

Remember: a good property for a fair price will often attract numerous competing offers, regardless of what the broader market is doing. Understanding market trends and their macro and micro influences will help you recognise a great value property when you see one.

How important is finding a reputable real estate agent?

In South Africa, finding a reputable real estate agent is crucial. These professionals can provide invaluable guidance and local insights, which are essential for navigating the property market successfully. 

Well-established real estate agents may also be able to connect you with sellers who have not yet publicly listed their properties. This could give you a chance to sidestep your competition and make your offer the first one on the table for your dream home.

The benefits of using a real estate agent extend beyond the practical, however. Buying a house is not an everyday occurrence. It’s a huge commitment, both financially and emotionally. Being able to talk through your hopes, concerns, and questions with a professional who understands the market and the neighbourhood you’re buying into is a great way to get comfortable with the process and ensure you’re making smart property decisions. And having a reputable real estate agent walk you through the various legalities, documents and contracts. 

How do I find a reputable real estate agent?

The best way to find a good real estate agent is through word-of-mouth referrals. If this is not possible, keep an eye out for local show house signage, and pay attention to the names most frequently associated with listings in your area of interest. A good real estate agent will be active in your neighbouhood - so look out for names you keep noticing.

Once you have a few names, set up some meetings to see who you gel best with. The right agent should make you feel supported, informed and confident in their connections, skills and experience.

How do I prepare my finances for a property purchase?

The general recommendations for buying a house in South Africa is to save for a deposit of at least 10% of the property’s value and set aside another 8-10% for additional fees and transfer costs. 

Financial readiness is about more than just saving enough money to cover purchase expenses, however. It’s also a good idea to investigate and understand your credit score, manage and minimise any debts, and carefully curate your monthly expenses to put your best foot forward in your bond applications.

Did you know? Deposits aren’t required to buy a house in South Africa. However, buyers with sizeable deposits of 10% or more have been known to qualify for interest rates up to 2.5% lower than buyers financing 100% of their property purchase.

What are the benefits of getting a pre-approval certificate?

A pre-approval certificate indicates how much you are likely to qualify for when applying for a bond. It offers several advantages when buying a house in South Africa.

Firstly, it gives you a clear idea of your budget, ensuring you don't waste time looking at properties out of your price range. Secondly, pre-approval shows sellers that you are a serious buyer with the financial backing to follow through on an offer which gives me value to your offers.

This can be particularly advantageous in a competitive market, but don’t be fooled into thinking that getting prequalified is only necessary during sellers’ market conditions. Competition for specific properties can be fierce at any time. The last thing you want is to find that perfect home and then lose out to another buyer simply because they took the time to get prequalified and you didn’t.

How do I find the right property?

Start by making a list of your must-haves and nice-to-haves in a home. This includes the number of bedrooms and bathrooms, proximity to work or schools, and amenities like shopping centres and public transport. 

Once you have an idea of what you’re looking for, attend a few showhouses to get a feel for what’s available in your price range and to refine your preferences. 

Don’t rely solely on visiting show houses privately, however. It’s always a good idea to get in touch with the leading real estate agents in your area to let them know what you’re looking for and what your budget is. That way, they can let you know immediately when an appropriate property becomes available, putting you first in line to make an offer, ahead of all the competition.

What should I be cautious about?

There are a few potential hidden costs and pitfalls to be aware of when buying a house in South Africa. These range from unforeseen maintenance issues (property inspection reports are not mandatory in this country), neighbourhood crime rates, and future development plans that might affect your property's value. 

Also, ensure all your financial documents are in order and understand the terms of your home loan thoroughly. The last thing you want when buying a house – or when getting to grips with homeownership – is to face an unexpected financial hurdle.

What if I want to buy property with a partner?

Buying a home with a partner can maximize your buying potential, but it requires very careful planning. 

It’s best to treat joint property ownership as a business agreement with a formal contract in place – regardless of your relationship with your partner. This makes it easier to address any disagreements that may arise and protect all parties (as best as possible) from the risks of joint ownership.

To sum it up:

Buying a house in South Africa is a significant milestone, and with the right preparation, it can be a rewarding experience. Understanding the market, finding a reputable agent, and ensuring your financial readiness are critical steps. So, start your research, get pre-approved, and happy house hunting!