Buying a house?
Investment budget template
Non South African Residents
Checklist for house hunters
a home is usually one of the more exciting and rewarding experiences most
people ever have; probably challenging and even daunting, emotional and
overwhelming, as it is often the biggest financial investment they will
a few guidelines and questions a buyer should answer before making the
commitment. Decide on the area you'd like to live in (close to schools,
work amenities etc.) Decide on the type of property you would like to
own an individual dwelling (house / cluster) a unit in a high density
(complex / flat / townhouse /apartment) The reasons you would like to
own a property rather to rent Decide on how much you would be comfortable
with spending on a property Normally financial institutions allow one
to spent between between 25 to 30 % of joint monthly incomes on a mortgage
bond repayment. It is recommended to be pre-approved by a financial institution
Contact a reputable estate agent to : Assist you with the process Show
you properties Answer any queries Check the properties thoroughly: the
suburb the amenities future developments financial aspects size, space
and style Physical condition
duty & cost
for miscellaneous costs
required = (Deposits + sub total of cost) (i)+(ii) =
of bond (amount of years@xx%)
repayment : NB minimum income must be three to four times the amount of
the bond installment
factor for 20 years at 14.5% =............(bond amount / 1000) x 12.8
= monthly repayment
: Further provision to be made for :
& bond insurance
Furniture removal expenses
Water, lights connection
property is bought through a Real Estate Agent, realtor or broker. Should
you consider purchasing a property privately, it is recommended to involve
a reputable estate agent or conveyancer to assist you.
South African government allows foreigners (individuals who reside outside
the countries borders) to purchase property in South Africa, subject to
Reserve Bank approval, either as: Natural persons Legal entity (C.C /
Company / Trust) (Legal entity may take up to 30 days to be registered)
/ Nonresidents may utilize local mortgage bond finance on the basis of
50% cash being brought into the country via Reserve bank approval.
finding a suitable property, a nonresident can submit a written offer
to the owner of the property to purchase the property, subject to a maximum
of 50 % bond from a local bank (an "authorized dealer") and subject to
Reserve Bank approval, which may take up to 14 days, for written confirmation.
mortgage bond finance approval from a bank is based on
The value of the property and
b) the credit rating/risk of the purchaser.
All offers to purchase property in S.A. must be made in writing to be
valid. (Any advise required must be sought prior to committing an offer
in writing) Once the seller has accepted an offer (in writing) a contract
comes into being, even if it contains any suspensive conditions e.g. Subject
to the approval of mortgage bond finance and approval by the Reserve Bank.
Normally all conditions are linked to a definitive time scale. Purchasers
are then bound to the contract, unless the purchase price is below R250
000, when the purchaser has a "cooling-off" period in which they may withdraw
their offer. (Please discuss this with an agent) South Africa has a sophisticated,
dependable banking system with healthy competition amongst the individual
banks on products and rates. Funds are secure and the transfer of funds
to registered banks are guaranteed. Once funds are received and guarantees
are called for by conveyancing attorney these maybe released to the attorney
pending registration of transfer (ownership) Ownership can be partial
or wholly-owned by foreigners, with the following property ownership:
Freehold – most common (Residential dwellings) Sectional title (Multi
unit dwellings) Leasehold Share block Extra costs included, are over and
above the purchase price: Transfs charges a er duty – government tax.
Transfer fees – Conveyancer's fees. Bond registration fees – bank nd legal
fees for registering a bond.
above fees are based on a tariff recommended tariff. Normally these fees
are approximately 7% of the purchase price.
in cases where the seller is registered as a VAT (Value Added Tax) vendor,
trading in property, VAT is applicable, included in the final selling
price, and payable by the seller.
may be rented out/leased to others, in which case rental incomes less maintenance
costs are taxable. Property may be sold or exposed of, in the normal manner
and foreigners are allowed to repatriate these finds back to their own countries
Africa is a very beautiful and diverse country spread over a fairly vast
area, ranging in different climates, vegetation, rural, urban, coastal,
inland, mountainous, flat, busy, quiet aspects …. there is a place for
everyone. We hope we can help you find your "little piece of paradise"
in our country.
a decision has been to purchase a property in South Africa, one should
adhere to the following guidelines: Check exchange rates of your currency
with the South African rand. Consider you affordability and financing
options. Decide on "where" you’d like to own property: A Gauteng (Johannesburg)
the financial "capital" of South Africa. The beautiful coastline – Kwazulu
Natal / Cape Conduct "Some market research" Speak to people you may know,
reputable agents, business contracts etc. about your ideas of purchasing.
Consider your motivation / reasons of wanting to purchase. Ask as many
questions as possible. Obtain information on South Africa and the various
regions – utilize the web, contact the embassy etc.
is worldwide every area has up market, middle and lower market areas.
Prices range from relatively "cheap to expensive", certain areas are "more
secure/exclusive" etc. Individual properties range from "freestanding"
freehold, to high-density sectional title. All properties are subject
to monthly council charges or levies.
the property market price ranges are: Lower (up to R300 000) Middle (R300
000 to R600 000) Middle/upper (R600 000 – R1000 000) Up market (R1000
the exclusive areas prices can easily range from R2 500 000 to R10 000
cluster/sectional title complexes – the fewer the number of units the
factors with pricing include: Locality within an area "views" "curb" appeal
Security Activities, schooling etc.
South African public transport system is generally considered to be fairly
poor, with individual vehicle ownership being a high priority, road traffic
and distances, should be carefully considered. Local business is relatively
decentralized to nodes surrounding the entire Johannesburg CBS to access
to – and transport are important factors.
you feel satisfied with your investigations – you can get down to the
business of finding a property.
have an idea of: area/price range/type of property…) Do a property search
on the Internet. Obtain newspapers with property adverts. Contact the
agents (Try and work with one or two – carefully, explain your requirements
– check that the agents understand what you want) View properties Check
each property thoroughly (See check list for house hunters) Ask as many
questions as possible
hope these pointers will help and we are only "the click of a button"
away to assist you with any queries. For further assistance in this matter, please feel
free to e-mail us.
| Distance from work Access in and out Public transport routes
Streets, lighting, pavements Future development plans Amenities–shops
Medical Schools Religious facilities Recreational facilities Community
Type of people Zonings Density high/low Commercial developments
Security Bottom end and ceiling price Average price
| In your price range Size and space Layout Living areas Potential
| Improvements/plans Electrical systems Plumbing Roof Walls Floors
General condition Position on stand Quite/noisy Garden Security
Views Value for money Resale value
remember that if the property you are purchasing is not newly built, it
is a "second hand" home and normally there is a bit of "wear and tear".
During the excitement and emotion of the first visit one tends to be "blinded"
to small faults. Please check the property as closely as possible.