For many people buying a house sounds much more complicated than it really is. The reason is that we do not do it regularly so its normal to panic. However property prices might be low at the moment but, according to Rael Levitt, CEO of Auction Alliance, interest rates have dropped to lows last seen in 1974, and there is a chance they could drop further. So if you've been planning to buy, now is probably the right time to buy property. Here is a short description of the home buying process:

1. The Purchase - You look around and identify the property you want. Before you take any decision it's advisable to get a professional to assess the property you're considering, however it's worthwhile having a good look yourself for some of the most common and potentially expensive flaws. Before you decide on buying the property, here's a checklist:

• Check places where wood has been exposed to moisture, such as in the kitchen or bathroom. Rotten window or door frames will need to be replaced, which will mean dusty, inconvenient building work which will no doubt also be costly. Keep an eye open for unsafe or loose railings on decks, staircases and balconies.
• Check that the space between the roof and ceiling is properly ventilated. Adrian Goslett, CEO of estate agency RE/MAX says ventilation ducts in the ceiling allows heat in that space to escape, which aids in the evaporation of any moisture that could ultimately damage interior walls and structures.
• The state of the roof is important. A damaged or leaky roof can have a serious impact on various other elements in the building, including the electrical components. Make sure you get an electrical compliance certificate before you consider signing anything. If you're looking at an old building, you could do worse than get your own electrician in to assess the state of repair of the wiring.
• Drainage on the property and on the perimeter roads needs to be assessed. If water can't escape, it could destroy your foundations. Make sure drainage areas are properly graded to direct water away from the home. Also have a careful look at the gutters and downpipes to make sure they are in good nick.
• Inside the house, check the state of the taps and the toilets, and look under sinks for leaks and damaged pipes that could come back to haunt you.
• Goslett says a good investment should be based on location first, and then features and price. You are likely to see a decent return if you are in an area or a suburb - or even in a specific location inside a suburb - that is sought after. Consider your proximity to schools, shops and hospitals when you are looking at buying a property.
•  But before you take the leap, you need to be sure that the property you've got your eye on won't end up costing you more in the long run. Goslett, says buyers must look past the aesthetic appeal of a potential home and assess the integrity of its components.
• If you are in any doubt, get hold of a certified property inspector to help you look for defects and assess how difficult or expensive they will be to fix. Also have the inspector check for things like additions and conversions that aren't approved or permitted by council.
• Be sure the property boundary lines are accurate. If there's any question about this, hire a land surveyor to research the original deed and to stake out the property's lines as well as those of your neighbour to avoid future disputes.

After you've found the right property the seller and you (the buyer) will sign an offer to purchase. If the seller accepts the offer, the buyer contacts the bond originator who will appoint an experienced consultant to collect all the necessary documents from you and submit it to the bank(s).

2. The Approval - The bank approves the home loan and instructs the bond attorney to register a mortgage bond. Here are a few suggestions on deciding whether to take the leap and, if you do, how to get the best out of your investment.

• Kevin Mountjoy, Gauteng regional sales manager at bond originator ooba, says it's vital that you shop around for a bond before you decide who to go with. All banks have different strategies, depending on where they need exposure, and this influences the rates they offer their clients. If the bank wants to increase its exposure to middle-income people in KwaZulu-Natal, it might offer preferential rates when such clients come.

3. The property registration or transfer - The seller instructs the transferring attorney to transfer the property into the buyer's name. Normally the seller appoints the attorney of his/her choice, but if you negotiate with the seller and he/she does not have any objections, you may appoint your own attorney. The title deeds and cancellation figures are requested from the current bond holding bank and a rates and taxes statement are requested from the local municipality.
4. The Transferring Attorney - The transferring attorney get the buyer and seller to sign the transfer documents after receiving the title deeds and cancellation figures. The buyer has to pay the transfer fees.
5. The Cancellation Attorney - The cancellation attorney is requested to cancel the seller's bond after receiving a guarantee from the bank for the amount still outstanding. You will note that it can save a lot of time to use an attorney who is registered on the bank's panel of attorneys. Also try to the same attorney for all the transactions. Otherwise your documents have to be sent from one attorney to the other which not only wastes time but also money.
6. The Bond Attorney - The Bond Attorney then contacts the transferring attorney. He advises the transferring attorney of the amount available for guarantees and requests the transfer (or draft deed) and guarantee requirements. The bond attorney prepares the bond documents. The buyer signs the bond documents; the attorney prepares and issues the necessary guarantees, forwards them to the transferring attorney, and prepares the bond documents for lodging at the Deeds Office. Note that the buyer pays for this service.
7. The Deeds Office - All the documents are handed in at the deeds office simultaneously by arrangement with all the relevant attorneys. The deeds office takes about two to three weeks to check the documents. If everything is correct they continue with registration.
8. The Bank - On the day of registration the bank pays out according to the guarantees issued.

You can allow at least three months for the registration and transfer process.

Factors which can delay the registration and transfer process:

• Failure by the buyer or seller to provide the necessary information
• Failure by buyer to obtain necessary proof of income and other documents
• Failure by the buyer to pay a deposit if required
• The existing bond holder (bank) failing to provide cancellation figures and title deeds to the transferring attorney
• Delay in the obtaining of guarantees
• Failure by the buyer to pay the bond or transfer costs on time
• Delay by seller or buyer to sign the transfer documents

Once you've bought your home, make sure you get adequate insurance and that you stay up to date with your coverage. Christelle Fourie, managing director of MUA Insurance Acceptances, says that up to 40% of South Africans have insufficient cover for their homes and their belongings and will be paid out only a fraction of what they should get if they make a claim. Fourie says that if a house is underinsured by 40%, a maximum of just 60% of the claim will ultimately be paid out. Some insurance companies offer assessment as part of their service, but if you aren't affiliated to one that does, consider getting your own assessor in to get the figure right.

Fourie says homeowners also need to be sure that they update their insurance annually. The value of artworks or valuables might fluctuate, or items might have been bought or sold - and all this needs to be adequately reflected in your policy. Insurance on the building itself is for its replacement value, so up-to-date building costs need to be continually reflected in the amount of cover you have.

It's also important that you ensure you have the minimum security requirements, so that there can be no dispute if you do make a claim. These might include having a lock-up garage, armed response, burglar bars, and so on.

Sources:

• Digiprop
• Businesslive

Page Created: 17 January 2012