How to buy a home in South Africa: a step-by-step guide

Buying a home takes most people two to four months from finding the right place to getting the keys. Most of that time goes on paperwork you don't control. What you do control is the start: the budget, the search and the offer. Get those right and the rest mostly follows.

1. Work out what you can afford

Banks look at your income, your expenses and your credit record. As a rough guide, most banks won't approve a bond where the monthly repayment is more than about a third of your gross income.

Remember the costs on top of the price. Transfer duty, attorney fees and bond costs can add 5% to 8% of the price, and the bank won't lend you this money. Our guide "Property transfer costs in South Africa" shows the full breakdown.

Then add the monthly costs of owning:

• The bond repayment.
• Municipal rates and taxes.
• The levy, if it's in a complex or estate.
• Home and life insurance, which the bank will require.
• Maintenance. Plan for something going wrong every year.

2. Save a deposit if you can

Some banks lend first-time buyers the full price. But a deposit of 10% or more usually gets you a better interest rate and a lower monthly repayment, and it makes your offer stronger.

If your household earns a moderate income, check whether you qualify for First Home Finance, the government's subsidy for first-time buyers (previously called FLISP). Banks and bond originators can tell you whether you're eligible.

3. Get pre-approved

Before you start viewing, ask a bank or a bond originator for a pre-approval. They'll check your credit record and income and tell you how much you're likely to be able to borrow. A bond originator applies to several banks at once, which can get you a better rate, at no cost to you.

Sellers take you more seriously with a pre-approval in hand. Our guide "How to check a buyer's bond pre-approval" explains what sellers look for.

4. Choose the area, then the home

Decide on the area first. Think about the drive to work, schools, transport, safety, and whether there's backup power and water.

Then decide what kind of property suits you:

• A freehold house gives you the land and the building, and you're responsible for all of it.
• A sectional title unit (a flat or townhouse in a complex) means you share the common property and pay a monthly levy to the body corporate.

5. View properly

At each viewing, look past the paint:

• Check for damp, cracks, roof leaks and water damage on ceilings.
• Run the taps and flush the toilets.
• Ask how old the roof, geyser and electrics are.
• Ask why the owner is selling and how long it's been on the market.
• Visit again at a different time of day, to check traffic and noise.

In a complex or estate, ask for the levy statement, the body corporate rules, and the minutes of the last annual general meeting. The minutes show whether a big expense or a special levy is coming.

If you're serious about a property, pay for an independent home inspection before you sign.

6. Make an offer

In South Africa, an offer becomes a binding contract once both of you sign it. This document is the offer to purchase. Before you sign, make sure it covers:

• The price, and what's included (for example curtains, appliances, the pool pump).
• A bond condition, so the sale only goes ahead if your bond is approved, for a set amount by a set date.
• Any other conditions, such as selling your current home first.
• The occupation date, and the occupational rent if you move in before transfer, or the seller stays after it.
• The defects the seller has told you about.

Most offers include a voetstoots clause: you buy the property as it is. The seller still has to tell you about serious defects they know about but you couldn't easily see. That's another reason for a home inspection.

Ask a conveyancing attorney to read the offer before you sign. It's quick and it's cheap compared with a bad contract.

7. Bond approval

Once the offer is signed, apply for your bond, or ask your bond originator to submit your application. The bank will value the property. If it values it lower than the price, it may lend you less, and you'll need to pay the difference.

When the bond is approved, accept it in writing before the deadline.

8. Transfer and registration

The seller's transfer attorney handles the transfer. You'll be asked to:

• Sign the transfer documents at the attorney's office.
• Pay the transfer costs into the attorney's trust account.
• Provide FICA documents (ID and proof of address).

The attorney lodges the documents at the Deeds Office. Registration usually takes two to three months from signing. On the day of registration, the property is legally yours.

9. Get the keys

You get the keys on the occupation date in your offer to purchase, usually on registration. Before you move in, do a walk-through with the seller to check that everything included in the sale is there and working.

Buying directly from an owner: stay safe

Most private sellers are honest, but property scams do happen. Protect yourself:

• Never pay a deposit into a person's private bank account. Pay only into the transfer attorney's trust account, and confirm the account details by phoning the attorney's office on a number you looked up yourself.
• Make sure the seller owns the property. Your attorney can check the title deed at the Deeds Office.
• Be wary of a price that seems too good, or a seller who pressures you to pay quickly.

Find your next home on LetDirect

On LetDirect, you can browse homes for sale across South Africa and contact the owners directly. Every listing is checked before it goes live. Our guide "Rental scams in South Africa" also covers how to spot a fake listing.