Golden Tips for Home Buyers

Linda Erasmus, CEO of Fine & Country in South Africa knows the property business inside out. Currently the head lines about property are dominated by doom and gloom, which is nothing new in any property cycle. Any downward cycle offers the homebuyer an excellent opportunity to buy property and now is definitely the time to buy property if you can afford to do so.

Buying property has got it pitfalls, however should you follow a few golden rules, and thing can actually goes quite smoothly. Erasmus shares some golden rules that buyers must follow in order to enhance a smooth transaction.

GOLDEN RULE NO ONE:

The underlying basic process involves two parties (buyer and seller) who want to trade something (the property). As the buyer is always the party that have to pay money over, it is vitally important that they buyer establish upfront how he is going to pay for the property. If cash, is it readily available from his bank account and if it is through a mortgage bond the question arise whether the buyer qualify for such finance. The buyer must do his homework first as most contracts will stipulate the time period in which the buyer has to deliver proof of payment(finance) The golden rule is that the buyer must have the money(finance) to pay for the property. This includes the transfer fees and fees to be paid in connection of the sale. When the finance will come from the sale of the purchasers previous property, make sure that the dates coincide with the dates where you need to deliver guarantees.

GOLDEN RULE NO TWO:

On the other hand the seller (second party to the contract has to perform his duties. The property that he is trading to the buyer needs to be the exact product that the buyer has paid for.

The buyer must make sure that this is happening and there are a few clauses that can assist the buyer with this process. Ask for approved plans of the property. Make sure that the home, as it stands, has been approved by authorities.

GOLDEN RULE NO THREE:

Maintenance: Quite often, once a property is sold, the seller neglects the property (garden) or leaves it empty where valuable attachments can be removed. In order to protect the buyer, a clause should be inserted to insist that the seller maintains the property until date of transfer.

GOLDEN RULE NO FOUR:

Fixtures and fittings: Always make sure that all fixtures and fittings, as well as all items that you as the buyer wants to remain as part of the property, are listed in the deed of sale. Quite often sellers remove the bar stools, which should remain in most cases where it fits in with the interior. South African Law demands that the sale of property must be in writing. Keeping this in mind rather put all the details going with the property in writing. Do not rely on any verbal promises.


GOLDEN RULE NO FIVE:

Earlier we mentioned the importance of the financial position of the buyer. The seller’s financial position can also impact on the sale. The buyer may ask for evidence that the seller’s outstanding bond is not higher than the price that he is about to offer. If so, the seller must give an undertaking that he will pay the difference to the bank, failing which may jeopardize the sale of the property.

Similarly, when there is a large account outstanding to the municipality for rates and taxes, transfer cannot go through. A simple way to overcome this is to ask the seller for a copy of his latest municipal account.


GOLDEN RULE NO SIX:

Occupation date: The occupation date can play a big role in making the parties satisfied with the transaction or dissatisfied. When the occupation date is given as the 1st November 2008, also put a time i.e. 13h00. In many cases a date is given and the seller awakes at 8am whilst the buyer’s furniture is outside the door. When the seller knows that he has until 13h00 to hand over the keys it makes it a lot easier and a lot clearer.

When parties decide to change the occupation date after the deed of sale has been accepted, always do it in writing on an addendum to the contract. Do not rely on the seller’s promise that he will move out at an earlier date, unless it is in writing. Should you have signed the agreement with the date being agreed upon as the 1st November 2008, but the parties agree at a dinner party weeks afterwards that the date should rather be 1st January 2009, the golden rule should be to get this in writing at soonest, failing which the only agreement that can be proofed as real, is the 1st November 2008.

The above are common mistakes that are made not once, but ongoing and by following these few rules, we are convinced that your next property transaction will be a very pleasurable one.