Experts answer your property questions

Bonny Fourie|Published 5 years ago

Buying or selling a home always requires research and careful consideration. In these unprecedented times, however, making these life-changing decisions can be more difficult. Our experts offer insight to help property buyers and sellers make the best decisions.

Q: I have found a home that I love, and am so tempted to buy it, but it is priced at my maximum budget. I’ve been told this is not a good idea, but since I really love the home, would it not be worth it?

A:

You can be tempted to buy a home that might stretch your budget but overextending yourself is never a good idea as you risk losing your home if the unexpected happens and you fall on tough financial times. You’ll also have less wiggle room in your monthly budget for other bills and expenses. – Claude McKirby, Lew Geffen Sotheby’s International Realty

Q: The repo rate has just been cut again but, in practical terms, what does that mean for me as a soon-to-be homeowner?

A:

On a R1 million bond at the current prime rate of 7.25%, monthly repayments have gone down from R9 400 a month to R7 900 a month – a difference of more than R1 500 or 17% a month. That’s meaningful, especially if you consider that it’s an after-tax saving. If you also factor in the petrol price reductions over the past few months of almost R4 a litre, consumers will have some additional disposable income. The rate cuts will also mean lower repayments on all other forms of credit, including car finance, personal loans and credit card balances, which will bring further relief to many households currently in financial distress due to the Covid-19 lockdown.

– Herschel Jawitz, Jawitz Properties

Q: Before the pandemic I was considering selling my home. But now that the economic situation has changed and people are under more financial pressure, I am wondering whether this is such a good idea. If I do go ahead with selling, what are the chances of getting my asking price?

A:

The economic fallout of Covid-19 will be more property listings will flood the market as many owners will be forced to sell for financial reasons. In an overstocked market, price and value will be buyers’ overriding considerations, with price being one of the main deciding factors. Let your agent help you set your asking price in the right range to sell in the shortest possible time.

– Samuel Seeff, Seeff Property Group

Q: I started a new job at the beginning of April and, fortunately, have not had my salary affected by the pandemic as I work in the essential services sector. With my new salary I can now afford to buy a home. How long should I wait before getting pre-qualified and starting to house hunt?

A:

Having permanent employment reflects a stable income, which is a factor lenders look at when considering bond applications. An employment record of at least 6 to 12 months would work in a buyer’s favour. If a buyer has recently been retrenched and has had to start a new job, the lender may regard them as a credit risk and might not approve the application.

– Adrian Goslett, Re/Max of Southern Africa

Q: I have my eyes on a property that I am really interested in buying but will not be able to view it personally until the real estate sector reopens. What risks am I taking by signing an offer to purchase without physically seeing the property?

A:

Though technology makes it possible to buy a property without actually seeing it, buyers need to be careful before signing the legally binding offer to purchase. But there are some things they can do to minimise their risks. Buyers should ask for room dimensions as pictures, and even videos, can be deceptive. To get an accurate idea of how large these spaces are, measure your current rooms and compare them to the dimensions of the new home. Covid-19 clauses (special addendums addressing the coronavirus) are being added to real estate contracts to protect buyers and sellers from the various unknown factors of purchasing property over this time. These may cover events such as delays in home inspections because inspectors aren’t able to enter the property, or slower repairs because only one contractor is allowed in a building at a time. Clauses also may address what happens if one of the parties has to go into quarantine or allow buyers to exit the contract if they lose their job prior to closing. Speak to your real estate professional and make sure you’re covered. If you’re serious about buying, make sure to ask the seller detailed questions about the condition of the home. Under the voetstoots clause, sellers must repair or disclose all defects to buyers if they are aware of them. But buyers are protected only if they can prove that the defects were deliberately concealed from them by the sellers. This is why it is imperative to ask the sellers as many questions as possible about the condition of the home. These include things as small as broken door hinges and window frames that stick, to larger concerns such as leaking pipes, faulty electrical outlets and the condition of the roof.