Getting bond preapproval, saving up to cover transfer costs and maintaining a good credit history are imperative for people looking to enter the property market for the first time, experts advise. Bay agents also say that prospective first-time buyers should be cautious and conduct research on property prices and other costs involved before taking the plunge.

Advice for first time home buyers

Mike Thomas, principal: Sotheby’s Realty in Port Elizabeth, says given affordable property prices in the city and the fact that rentals are increasing dramatically, now is the perfect time to enter the market.“Banks are still willing to provide 100% loans to first-time buyers, but it is important to have a squeaky clean credit history,” he says.Thomas suggests applying for preapproval at a bond originator such as Ooba, which works with all the relevant banks to determine how much buyers will quality for.“Preapproval is extremely important for first-time buyers. It makes no sense to find a house you love and lose it because you didn’t know you are not qualified to buy for that amount. Research is also important. First-time buyers are more educated than ever before and know how much other properties have been selling for in the area.”


Thomas says first-time buyers should also take levies and municipal rates, as well as transfer fees, into account. They should also consider whether a property will require repairs or renovations in the near future.Harcourts Alpha property agent Siphiwo Ludwabe agrees that preapproval is important, but adds that first-time buyers should have enough put away to cover transfer and bond registration costs. “The lawyers involved will inform the buyer of these costs, but it’s important to have this money available before putting in an offer. It is also important for first-time buyers to pay their accounts on time and ensure they are not blacklisted,” Ludwabe says.

He says banks have different criteria for determining what kind of bond they will grant a first-time buyer.“For example, FNB may offer an 85% bond, while Absa might only be willing to offer a 50% bond and then you will need to pay in the difference.”

Warning for first time home buyers

Henri Abrahams, 33, who recently bought in Mount Croix, warns first-time buyers that they might have to pay a year’s municipal rates up front. “We were lucky as we bought in June and then only needed to pay two months, because the municipal year end is at the end of July.”

Milisa Piko, 29, who bought a property in Parsons Vlei, agrees that research is extremely important: “Going to see an agent should be your last step, and not your first step.”


Words: Lee-Anne Butler

Images: iStock

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