Advice for Purchasers
I remember when I bought my first house with the idea of it becoming a home for my family (+-18 Years ago). Since then legislation changed and this caused a few extra landmines on the road to a successful homeowner.
The implications of CPA (Consumer Protection Act), FICA (Finance Intelligence Centre Act) Credit Act, Rental Act, Prevention of Illegal Eviction (PIE) is but a few that can become applicable.
Contact your bank and find out what amount you qualify for a home loan. You can also speak to a bond originator who specializes in bond applications. This will assist in the price range you want to buy.
Finance
Make sure you are aware of the consequences if you do not register the property in your own name, especially the effect of CGT (Capital gains tax) and Estate Planning in future. Speak to an experienced Attorney or your bookkeeper.
In whose name are you buying?
Both have its benefits and pitfalls. If you have done your homework on the market and the value of the property you are interested and you can buy it privately from the owner and save a lot of money in estate commission. I would advise that you consult with an Attorney to assist with the Offer to Purchase.
Private or Agent
Read this document carefully before signing and seek legal advice if not sure about a condition or any other enquiry.
OTP (Offer to Purchase)
Make sure that you go through the house with a critical eye as a house full of furniture is deceptive and many defects are overlooked as you are so overwhelmed of the fact that this house can be the once you choose. Take into account cost of possible repairs and or alternations. If in doubt, take a professional builder and/or engineer to give you his opinion.
Inspect the Property
If it is a Sectional Title Complex. Keep in mind that the Sectional Title Act has certain implications on you as Sectional Title Owner. speak to other owners in the complex to get an opinion on how the complex is managed and find out who is the Managing Agent of the Complex.
Buying a house in a Security Complex
Make sure you are aware and understand conditions of the bank’s loan criteria.
The bank may trust on life insurance ceded to the bank to the value of the loan amount. Keep this is mind.
Plans
Ask the owner or agent for a copy of the approved building plans to make sure all improvements are on plan. If not on plan the OTP must make provision or keep the expense in mind when making an offer. When the property is, a Sectional Title ask for a copy of the Sectional Plan to compare with the Unit. If any portion is added to the unit the Sectional plan must be extended which can be costly and must be kept in mind when making your offer. You are probably making the biggest capital investment and adding an expense that will form part of your future budget for the next 20 years. Speak to any of our professional staff if any enquiries in this regard as every transaction has efficient circumstances and factors that must be kept in mind.
Conditions of a Home loan
Life Insurance
The bank may trust on life insurance ceded to the bank to the value of the loan amount. Keep this is mind.
Surety
If you buy in a legal entity the bank will usually insist on suretyship if you in your personal capacity.
Insurance
The property must be insured for the replacement value and you can make use of your own insurance as banks usually push their insurance companies forward. If you buy a Sectional Title Unit the insurance on the building will be covered by the Body Corporate.
This article is for information purposes only and must not be construed as legal advice. Please consult one of our Attorneys for legal direction related to the circumstances of your individual situation.