Are you buying a new home or an investment property? Tips for buyers.
My previous article offered tips for sellers, but in this article I would like to provide some tips for you if you are buying a new home or investment property, especially as a first-time buyer.
- Get advice or a second opinion regarding the important things that you are unsure about. Not everyone has expertise when it comes to buildings, damp problems, roofs, etc, and doing a surface check of the property is not sufficient for the amount of investment you are about to make. Take friends who know or hire an expert to inspect the property. Don’t feel pressure to sign the Offer to Purchase (OTP) without doing this type of due diligence. When I was viewing property as a prospective buyer, I once had an agent make light of a very serious damp problem. I am glad I could call a friend who had expertise regarding this, and whose advice ensured I was not buying a massive problem.
- You can make your choice of a trusted transfer attorney part of your OTP conditions of sale. I was assisting clients just this morning with a very messy situation and they really wish they had known they had this option before signing their OTP. Exercising this option will give you added peace of mind during the transfer, and contrary to popular thinking, while sellers traditionally choose the transfer attorney there are no laws preventing buyers from choosing or requesting a particular transfer attorney. There is currently a move to the parties reaching agreement as to the transferring attorney.
- This one seems obvious, but don’t just view the property, try to experience it. Walk around the neighbourhood and if possible, speak to neighbours and find out how they like living there. Visit the property more than once and at different times of the day. If you do not live close enough to do this, ask a friend to do this for you, or get professional assistance.
- List all the property repairs, painting, etc that you would like the Seller to do before transfer, or as agreed, as part of the OTP conditions of sale. Make sure to itemise the repairs or maintenance required, instead of using general terms. This itemised list becomes invaluable should a dispute arise as to the repairs.
- Stress is often a huge factor when buying, but try to enjoy the process of change or the new season that this significant purchase may represent for you.
- If you are buying a sectional title property:
- find out what the monthly levies will cost and what the levies cover;
- find out what the monthly rates payment will be;
- Enquire about the state of the HOA books of accounts: are they up to date? Is there surplus? You may also need the recent annual financial records for the bank if you are applying for a bond.
- If English is not your first language, or if you are based outside of South Africa but buying here, ensure that you get your OTP reviewed by another attorney before you sign, in order to avoid agreeing to problematic clauses such as interest charged on delays.
Disclaimer: the information contained in this article is educational and not intended as legal advice. You should always consult with an Attorney for advice and assistance pertaining to your specific circumstances.