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Buying your first home in South Africa: a step-by-step guide
You buy a first home in South Africa in seven broad steps: work out what you can afford, get your credit record in shape, line up a deposit, get a bond pre-approved, find a property, sign an offer to purchase, and then wait for the transfer attorney to register the property in your name. The whole process, from signed offer to keys, often takes about 8 to 12 weeks, and the work you do before you start looking saves the most time and money.
Before you look at any houses
Start with your budget, not the listings. A bond (the home loan you repay monthly to a bank) is only part of what you will pay each month. You also pay rates and taxes to the municipality, insurance, and levies if the home is in a sectional title scheme or an estate.
- Work out what you can afford. Add up your income and your fixed debts, then test a monthly repayment with the affordability calculator. Banks run their own checks, but you should know your own limit first.
- Check your credit record. You can get a free credit report once a year, and you can ask each credit bureau for one. Look for errors and old accounts you forgot about. Banks look at your repayment history when they decide whether to lend to you.
- Start a deposit fund. Some buyers get a bond for most or all of the price, but a deposit lowers your bond and your monthly repayment. See how much deposit to aim for and use the deposit savings calculator to set a monthly target.
- Get pre-approved. A pre-approval tells you roughly how much a bank is willing to lend. It is not a final approval, but it lets you shop with a realistic ceiling. More on that in our guide to home loan pre-approval.
Budget for the costs on top of the price
This is where first-time buyers are caught out. Besides the deposit, you pay transfer costs when the property is registered in your name. These include transfer duty (a tax paid to SARS), the transfer attorney’s fees, Deeds Office fees and, if you take a bond, the cost of registering it.
There is no first-time buyer exemption from transfer duty. Duty is nil on a price up to R1 210 000 and rises in bands above that, so a cheaper home may carry no duty at all. Attorneys’ fees are not fixed by law and differ from firm to firm, so ask for a written quote. The transfer costs calculator gives you an estimate, and the full cost of buying a home lists every item.
Finding the property and making an offer
Search by area and price on PropertyNow, and view more than one home before you decide. Take a list with you; these viewing questions will help you spot problems early.
When you find a home, you make an offer to purchase. This is a legal contract and it must be in writing and signed to be valid. Read every clause before you sign. We explain what to look for in the offer to purchase. Pay particular attention to:
- The suspensive conditions, such as the sale being subject to you getting a bond. See suspensive conditions explained.
- The voetstoots clause, which means you buy the property as it stands. See voetstoots and latent defects.
- The occupation date, and whether you pay occupational rent if you move in before registration.
Do not assume you can change your mind afterwards. For most home purchases the law gives no cooling-off period. Read the rules on cooling-off before you sign.
From signed offer to registration
After you sign, the seller’s transfer attorney (also called the conveyancer) takes charge of the transfer. You will need to provide your ID and often proof of address, because attorneys and banks must verify who you are. If you are married in community of property, your spouse will be named in the documents too.
In the meantime, you apply for the bond, the seller arranges the municipal rates clearance, and any required compliance certificates are obtained. When everything is in place, you sign the transfer and bond documents, the attorney lodges them at the Deeds Office, and the property is registered in your name. Here is the step-by-step process and timeline.
Do not move in before registration without a signed occupation agreement. It leaves you exposed if the deal falls through.
What to do next
- Test your budget with the affordability calculator.
- Estimate your monthly repayment with the bond repayment calculator.
- Read about how much deposit you need.
- Browse homes for sale in your price range on PropertyNow.
This article is general information for South African readers, not legal, financial or tax advice. Rules and rates change, so check your own situation with an attorney, your bank or a tax practitioner. Our property calculators can help you work out the numbers.