You have finally found your dream home and are now ready to put in your offer to purchase, but you are not sure how to go about it and what is involved.
For novice buyers, Van Wyk says it can often be a real disappointment if they have their heart set on a home, just to find that they were a few thousand short with their offer and the seller accepted another offer.
Steve van Wyk, MD of Seeff Centurion, says the best way to secure the property is to ensure that you put in an offer that will get the seller interested.
“Remember, you might not be the only interested buyer. If you are serious, then have a frank discussion with the agent and rather put in an appropriate offer,” says Van Wyk.
“Properties below the R1.2 million to R1.5 million price mark often attract the interest of multiple buyers, and if you are really interested it is best to go in with your best possible price offer. Similarly, any well-priced property close to schools, good transport and those in top-class security complexes and estates, tends to attract good interest.”
In a sellers’ market, it is especially advisable to do your homework in terms of submitting a good offer.
In this type of market, Van Wyk says there tend to be more buyers who compete for a limited supply of property. Chances are the property will attract multiple offers and end up selling for close to or even more than the asking price.
“In a buyers’ market there tend to be more properties and fewer buyers. The onus then tends to shift to pricing, and a smart seller will price in line with the market trends to attract good offers,” says Van Wyk.
“In this type of market, buyers tend to have more bargaining power and, since they are likely to be one of a limited pool of offers, can come in a bit lower.”
“Buying a property is always an exciting activity, but it requires careful consideration as it is a substantial financial and legal commitment,” says Van Wyk.
He says a ‘clean’ offer – one with as few suspensive conditions as possible – is likely to make it to the top of the list in the event of multiple offers. An offer that is subject to the sale of an existing property could, for example, cause a notable delay, and may even result in the offer falling through if that property remains unsold by the specified date.
In the event of a cash offer where the cash is tied up in investments, it may also take up to 30 days for the investment to be released.
“Buying a home is a significant financial commitment, and you need to do your homework in terms of the price that you can afford. Bear in mind that if the offer is below the asking price it may be rejected – even in a buyers’ market – because the seller might not be in a hurry to sell,” says Van Wyk.
“I, therefore, recommend that buyers ensure they have a bit of room to go in with a higher counter offer should that be necessary.”
Another important consideration is whether you will need a home loan.
“In most instances, especially for first-time buyers, a bond is required. The financial institution may also require you to pay a deposit as part of the transaction,” says Van Wyk.
“First-time buyers should also be aware of the additional transaction costs that may apply. Even though the first R900 000 of the purchase price is exempt from transfer duty, there may be bond registration costs, and it is vital to check with the agent what costs will apply.”
To qualify for a home loan, you will need a positive credit record and secure income of three times the loan amount.
It is advisable to undertake a pre-qualification check before you put your offer to purchase in. This way, Van Wyk says you can avoid disappointment.
“Buying a property is always an exciting activity, but it requires careful consideration as it is a substantial financial and legal commitment. It is therefore always advisable to work with a credible real estate agency.”