Buying a new home is a very exciting time in your life. With this excitement comes a lot of anxiety because most people often overlook some very important factors which can later prove to be costly.
You should not only consider whether you can afford the bank’s monthly installments. Below I cover some very important factors you should also keep in mind.
- Transfer duty costs – these are calculated according to the SARS tax tables and may add to the cost of buying your home depending on its value
- Find out what the current estimated electricity, water and rates on the property are. Include these in your budget
- Find out if the local Municipality account is up to date in payments and obtain a clearance certificate
- If you are buying a property in a complex, find out what the monthly levies amount to and budget accordingly
- Determine what the levy payment covers. In some complexes it is all inclusive; this means it covers gardening, security, building insurance and reserve fund allocations. If it is not all inclusive, ensure that you factor in these additional costs into your budget
- Confirm if the levies on the property that you are moving into are up to date. Get a clearance certificate from the property manager. Note: If you move into your property without the certificate, you could be held liable to settle outstanding levies
For properties in a complex- The Body Corporate
- Enquire about the financial position of the body corporate of the complex that you are moving into. If the financial position is not stable it might not be a good idea to buy in that complex. A poor financial position could later on damage your chances of being able to sell your property
- Find out if there are any special levies that are about to be introduced so that you can budget for that as well
- If it is a sectional title property, make sure that they have built up a reserve fund as is required in terms of regulations. If not, it may lead to a special levy in future and that could affect your monthly budget