It is vital to realise that an offer to purchase a property is a legally binding contract and that you cannot get out of it without incurring onerous financial penalties. You should therefore be ready to purchase the property before you put in your offer, says Samuel Seeff, chairman of the Seeff Property Group.
A property is a long-term purchase, and you need to ensure you make the right decision before putting in the offer. You cannot put more than one offer in at a time and once that offer is in, it is binding unless it lapses due to your inability to fulfil any potential suspensive conditions.
Seeff says these are some of the things that you need to consider before doing so:
That you are able to pay the purchase price. If you need a home loan to help you buy the property, you should do a formal prequalification so that you know how much you can buy for and that you will be able to secure a home loan.
That you have cash available to put down as a deposit. Generally, only in the case of qualifying first-time buyers will the banks grant a home loan to cover the full purchase price. In all other instances, the buyer will need to put down a deposit. Currently the average deposit requirement is around 10%.
That you have cash available for the transaction costs. This can be considerable and include transfer duty, attorneys’ fees, bond registration costs and other incidentals. The money must be available upfront and usually become payable once the Conveyancing Attorneys start with the transfer process.
That you have all the necessary documents. You will need certified copies of your personal documents (ID, proof of address, marriage certificate etc.) and documents required for a home loan application such as proof of employment and income and three months recent bank statements.
That property will meet your future needs. For example, if you want to make alterations or build on and the property is part of a community scheme what the restrictions or regulations are, or things like visitors parking or what you can put in your yard or on your balcony.
That you have done a proper walk through and inspection. You should be quite sure that you want to buy the property because an offer to purchase is a binding legal contract. You should also familiarise yourself with the neighbourhood, amenities, schools and the daily traffic commute.
Read: First-time homebuyers' fears - how to overcome them
Cobus Odendaal, CEO of Lew Geffen Sotheby's International Realty in Johannesburg and Randburg, shared in an article that the idea of homeownership as the holy grail of adulthood and evidence of success has been ingrained in us for generations and property still remains one of the best long-term investments, so many people are in a quandary about whether to delay the purchase or bite the bullet and get a foot on the property ladder no matter the consequences
“But it’s not a simple choice as each option offers distinct benefits and drawbacks and with the economic fluctuations, high interest rates and uncertainties that we’re seeing, it’s essential to carefully assess one’s current financial situation and long-term goals before committing to either option.”
Advantages of Ownership:
Building Equity:
One of the most significant advantages of homeownership is building equity. As you make mortgage payments, you are gradually increasing your ownership stake in the property. Over time, this equity can serve as a valuable asset and a potential source of wealth.
Stability and Freedom:
Owning a home provides stability and the freedom to personalize and modify the property to suit your preferences. You have more control over your living space and can make long-term plans without concerns about lease expirations or rent hikes.
Tax Benefits: Homeownership can come with tax advantages, such as deducting mortgage interest and property taxes from your taxable income. These benefits can help reduce your overall tax liability.
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