Buying a home is an exciting step, especially for first-time buyers, but it’s not without challenges. In South Africa, the property market is unique, and certain common mistakes can lead to financial and emotional strain if buyers aren’t careful. From overlooking costs to skipping critical due diligence, these pitfalls can be costly in the long run.
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Antonie Goosen, principal and founder of Meridian Realty, shares insights on the most common mistakes and offers advice on how to avoid them.
“Many first-time buyers are so eager to step onto the property ladder that they overlook crucial elements, like the additional costs beyond the purchase price,” Goosen begins. “Transfer fees, bond registration fees, and ongoing maintenance are often underestimated, leading to financial strain that could have been avoided.”
One of the most common pitfalls for new buyers is stretching their finances too thin. In a country where interest rates can fluctuate significantly, it’s vital for buyers to remain within their means. He explains, “It’s very tempting to choose a home that’s at the upper limit of what you can afford, especially if it’s in a desirable area or has features you love. But buyers must remember that interest rates can rise, and economic changes can impact one’s ability to afford monthly repayments.”
Goosen advises that buyers keep a financial buffer to cover unforeseen costs and not rely solely on current income or low interest rates. “It’s always wise to prepare for potential increases in monthly payments. A house is a long-term investment, and buyers should have a plan that sustains them even in tough economic times,” he adds.
Another common misstep is rushing through or skipping property inspections. In South Africa, property inspections can reveal issues such as structural weaknesses, damp, or electrical faults, which could lead to expensive repairs. “Many buyers believe they’ll save money by avoiding a professional inspection, but in reality, they’re taking on a significant risk,” he says. “A professional inspection can reveal hidden issues that may not be apparent during a casual viewing. These issues, if ignored, could lead to significant repair costs later on.”
Goosen also highlights the importance of understanding the local area and neighbourhood. “Check for factors like security, noise levels, and future developments in the area. All of these can impact the quality of life and long-term value of the property,” he advises.
Many first-time buyers assume they’ll be approved for a bond without considering how their credit history affects their application. South African banks conduct thorough credit checks before approving bonds, and a poor credit score can lead to higher interest rates or even bond rejections. He stresses, “Buyers should ensure they have a good credit score and avoid making major purchases on credit just before applying for a bond. Lenders look for stability, and any financial disruptions can affect the bond application process.”
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He also advises seeking pre-approval for a bond before shopping for properties. “Pre-approval gives buyers a clear idea of their budget and prevents disappointment if they fall in love with a home outside their means,” he says.
First-time buyers are often focused on current needs, but overlooking a property’s resale potential can be a mistake. “Your first home may not be your forever home, and it’s essential to think about how desirable the property will be to future buyers,” says Goosen. He advises buyers to choose properties in well-established or growing areas, with access to amenities, good schools, and secure surroundings.
“Location is one of the few factors you can’t change, so choosing a good one helps preserve and even increase your property’s value over time,” he adds.
In an attempt to save costs, some buyers try to navigate the process without professional help, which can lead to mistakes. He suggests working with a reputable estate agent who understands local market dynamics. “A knowledgeable agent provides invaluable guidance on fair market value, negotiates effectively, and helps buyers avoid overpaying, especially in competitive areas,” he says.
For first-time buyers, avoiding these common pitfalls and seeking expert advice can make the difference between a smooth purchasing journey and a financially challenging one. “Ultimately, a well-informed buyer is a successful buyer. Taking the time to understand each part of the process can prevent costly mistakes,” says Goosen.
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According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, not working alongside a real estate agent can be a costly mistake for buyers. “A good agent brings expertise, market knowledge, and negotiation skills to the table. They can help guide you through the paperwork, coordinate with other professionals, and support you through the entire process. Their assistance can be invaluable, especially for first-time buyers,” says Goslett.
There are many obstacles in the path towards a successful property transaction and a lot can go wrong between signing an offer to purchase and having the home transferred into your name. To help buyers be better prepared for these potential pitfalls, RE/MAX of Southern Africa shares some of the most common roadblocks.
Being rejected for a home loan
A common mistake is not getting pre-approved for a home loan before starting the home search. Pre-approval gives you a clear idea of what you can afford and reduces the risk of rejection when you officially apply for home finance. There can be a number of reasons why your bond application could be rejected, but most commonly it has to do with your credit score. Also, if you have changed jobs recently (within the last 6 months), or are self-employed, this will also affect your chances of bond approval.
Being unprepared for upfront costs
There are a number of upfront costs that need to be paid before the property can be transferred into the new buyer’s name. This includes transfer duty, transfer fees, bond initiations fees, and other associated costs. Depending on the value of the home, this can add up to a large sum of money.
Skipping a private home inspection
Although this would come at a buyer’s own expense, taking this precaution could save you a lot of money and stress by uncovering all the potential issues with the property before transfer takes place. The compliance certificates that the seller will need to have issued before transfer can occur will cover some of the potential problems, but these won’t reveal all the issues with the home. To make sure you are not caught off guard by hidden problems like structural damage, low water pressure, or roofing issues, it is advisable to hire a contractor to inspect the home beforehand.
Buying a home is a complex process with many potential pitfalls. Goslett says that by being aware of the common issues and taking proactive steps to address them, you can navigate the journey more smoothly and make a decision that brings long-term satisfaction and financial stability.
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