1. Budget
A budget is your personal financial plan that helps you make informed decisions about your money. It typically includes:
- Income: the money you earn
- Expenses: the money you spend
- Savings: the money you’ve set aside
- Goals: how much you need to save for specific targets—such as a deposit on a home
2. Home loan pre-qualification
Some refer to this as “pre-approval,” but that’s misleading. Pre-qualification means a bank has assessed your finances to estimate what monthly bond repayments you can afford. It’s not a guarantee that you’ll be approved for a home loan later.
3. Credit check
Banks check your credit history through credit bureaus to assess whether you’re likely to repay the loan. A good credit score increases your chances of loan approval. Your history of previous debt repayment plays a big role in this rating.
4. Property search
Once you have saved a deposit and pre-qualified for a home loan, you can start your property search on platforms like Private Property. Filter listings by location, number of bedrooms and bathrooms, garages, and more.
5. Viewing
Visit multiple properties in your price range. Arrange viewings with the estate agent or seller and inspect everything—from ceilings and walls to windows and plumbing. This is your chance to find a home that meets your needs.
6. Market value
Market value is what a property is worth based on:
- Recent sale prices of similar properties in the area
- The home’s size and features
- Whether it’s a buyer’s or seller’s market (see below)
- A comparative market analysis done by an estate agent
7. Buyer’s or seller’s market
- A buyer’s market means more homes are for sale than there are buyers—prices tend to be lower.
- A seller’s market means more buyers than homes for sale—prices are typically higher.
8. Offer to purchase (OTP)
The Offer to Purchase is a legally binding document where you propose to buy a property at a specific price and under certain conditions (like needing to sell your current home first). If the seller accepts and signs it, the transfer process begins.
9. Conditions of sale
Conditions of sale in the OTP can include:
- Securing a home loan
- Selling your existing property
- Timeframes for occupation
- Special inspections
- Occupational rent agreements
10. Counter-offer
If the seller disagrees with your offer, they may issue a counter-offer with a revised price or changes to the conditions. You can accept, reject, or negotiate further.
11. Home loan application
If you’re not buying in cash, you’ll need to apply for a home loan. Submit applications to one or more banks, choosing between 20- or 30-year repayment terms. The bank will assess your income, expenses, and credit history.
12. Interest rate
This is the fee charged by the bank for lending you money. It’s based on the repo rate set by the South African Reserve Bank. A good credit score may qualify you for a better rate, often referred to as prime interest or below-prime.
13. Home loan approval
If the bank is satisfied with your financial standing and the property, you’ll receive home loan approval in principle—subject to a property valuation.
14. Property inspection
The bank appoints an accredited property inspector to ensure the home is structurally sound and worth the purchase price. This protects both you and the lender.
15. Home loan registration
Once approved, you’ll submit documents like your ID, proof of income, and bank statements. The bank will register a bond over the property as security for the loan.
16. Conveyancing
A conveyancer (a specialist property lawyer) will transfer the property into your name. They work with both the bank and the seller to handle legal paperwork and payments. They also liaise with the Deeds Office and municipality to update ownership and services.
17. Legal costs
You’ll need to cover various legal and administrative fees:
- Conveyancer’s fees
- Transfer duty, if applicable (paid to SARS)
- Deeds Office registration fees
- Estate agent commission, if applicable
- Home loan cancellation fees if replacing an old bond
18. Deeds Office and title deed
The Deeds Office records ownership of every property in South Africa. Once the property is registered in your name, a title deed is issued. Until your bond is fully paid, the bank holds the title deed as security.
19. Occupational rent
If you move in before the property is registered in your name, you may pay occupational rent, usually a percentage of the purchase price. This must be agreed upon in the OTP and includes covering services like water and electricity.
20. Transfer and handover
After registration at the Deeds Office, your conveyancer confirms transfer. This can take 6–8 weeks. You’ll then receive the keys—either from the estate agent, seller, or conveyancer—on the agreed occupation date.
21. Rates and taxes
You must open a municipal account in your name. In addition to utility bills, you’ll pay property rates, which are calculated on the home’s value, and fees for services like refuse removal.
22. Home loan repayment
From the day your property is registered, your home loan repayments begin. These include the principal loan amount and monthly interest.
23. Homeowners insurance
Also known as building insurance, this protects against damage to the physical structure of your home—roof, geyser, fixtures, and weather-related incidents. If buying into a sectional title complex, the body corporate may already cover this.
