Property buying tips from a property lawyer
While there are many factors that influence property buyers’ preferred investment, as experienced property lawyers we’ve selected a few points that are commonly considered by when purchasing property.
This option can offer a substantial cost saving for the seller, so it’s becoming more popular for people to opt for less traditional ways of selling their property, especially if they’re comfortable and capable of marketing their own properties.
There are a few cautions that we would like to point out:
As a buyer you need to have your property lawyer review the contract to ensure it is not biased in favour of the seller, to your detriment.
Understand legalities and processes as outlined in our guide to the conveyancing procedure.
Research the market and recent sold prices in the area you’re looking at, there are a number of property value reports that offer this information at no cost. Consult with estate agents and property professionals that can provide insight into selling prices, trend and growth potential of the area.
ask your property lawyer about latent and patent defects, your protection under the Consumer Protection Act and also the voetstoots principle - all of which can protect, or affect you as the buyer should property defects not be disclosed ahead of the sale
make sure the agreement of sale is specific about fittings in the house and garden – if not, you could have several itms removed from the property with no recourse.
Building new vs buying existing
The advantages of either buying an existing property or building new are unique to each buyer’s personal preference and financial consideration. While buying off-plan, or in a property development estate can actually cost less than buying and renovating an older home. It will also, of course, depend on whether you prefer a completely new home, or are willing to invest in renovating an older character home, with the potential of increased costs for older homes as issues arise during the renovation process.
Building your own home
plot-and-plan, or off-plan options are cost effective, and usually don’t have transfer fees. Remember though to factor in other costs associated with building, although they should be included in turnkey options make sure everything is clarified with the developer ahead of time, i.e. electrical, plumbing, utilities and services.
make sure you’ve budgeted for the estate’s fees and levies, and check whether these are to be paid monthly as soon as the property is registered in your name, even though you have not started building yet
buying off plan in an estate, of course dependant market factors, can be an excellent investment as capital value growth can be positive in just a few years.
Buying an existing home
If you’re looking for a home that has the potential to expand, or even sub-divide and develop at a later stage, buying an older home is definitely a consideration. You may also be inclined to purchase an existing home if you want to be in an area that has restricted new, or high-volume developments, or no longer has open plots or land for sale as is sometimes the case with older, more exclusive areas.
A few things to bear in mind here are:
research thoroughly and try an get an idea of the potential growth and future value of the area, as well as developing plans and infrastructure of surrounding areas.
budget for all associated costs, as you’re liable for for transfer duty, transaction costs, attorneys’ fees and bond registration costs.
make sure all inspections and certificates are current, relevant and legitimate - it could also be good to get your own structural engineer inspect the property to be sure you’re aware of potentially expensive issues often associated with older homes.
Depending on how, or why, the property is being sold, buying a property can offer the buyer a number of advantages:
price: the buyer can be reassured that the property value is aligned with the selling price, and not inflated
it’s a sure thing: the seller is definitely selling
the seller is obligated to sell to the highest bidder, so the transaction is not likely to fall through
quick turn-around time as the lengthly negotiating process is cut out
There are a few things to be aware of ahead of the time:
check that as the buyer you are not responsible for outstanding utility or municipal fees
research the property history, market value and other properties in the area to make sure you have a clear idea of the value pf the property, and set you bid price accordingly
make sure you finance is arranged ahead of time, and covers all fees involved, including the auctioneer’s fees that need to be paid on auction day
ask the auctioneer for the contract and Terms & Conditions to review ahead of the time so you’re fully aware of all details
When entering into a property transaction, all the terms of the sales agreement need to be transparent, accurate and fair to avoid unforeseen complications or delays.