Buying a house in 10 steps: Your complete guide

Article summary

• Find out what you can afford by getting prequalified, then find a home that meets your requirements.
• Sign the offer to purchase.
• Apply for a home loan.
• Pay for the transfer of property and bond registration.
• Move in and enjoy your new home.

As one of the most significant investments you’ll ever make, it should come as no surprise that purchasing a home is an extensive process.

But while it may seem daunting at first, it’s not like you’ll be wandering uncharted territory. The path is well signposted, and there are expert advisors who can help you along the way.

Here’s a handy step-by-step guide to buying a house in South Africa, including how best to secure a home loan.

Buying a house: Step-by-step guide

1. Determine what you can afford.
2. Assess your credit record.
3. Hire an estate agent.
4. Find your ideal home.
5. Make an “offer to purchase”.
6. Arrange a home inspection.
7. Apply for a home loan.
8. Transfer and bond registration.
9. Title deed registration.
10. Move in.

1. Determine what you can afford

Before you start your house search, you should have a very clear idea of what financing is available to you for the transaction.

A good starting point would be to get prequalified. This provides an idea of what you can afford.

You can get prequalified by contacting ooba Home Loans, or using our free, online tool, the Bond Indicator. 

2. Assess your credit record

Your credit score is the single most important factor when applying for a home loan.

The bank uses your credit score to determine how much of a risk you are. It therefore determines your chances of home loan approval.

Your credit score will be a three-digit number from 300 to 850. A good credit score is anything above 600. 

Find out your credit score by getting prequalified with ooba Home Loans, or by using our Bond Indicator.

3. Hire an estate agent

While it’s commonly assumed that estate agents work solely for sellers, they are in fact a great asset to house buyers too.

Find an estate agent you can develop a good working relationship with (consider asking friends and relatives for recommendations). Their knowledge of the housing market, and their ability to handle paperwork and deal with sellers on your behalf, will make for a much smoother process.

Furthermore, their services are free, as their commission is paid by the seller.

4. Find your ideal home

Now the part people generally enjoy most about the home-buying process, the house hunt itself.

Of course, this is also the most difficult part of the process, as this will all be for naught if you don’t find a home that meets your requirements.

It helps to have an idea of what you can afford, and to have an estate agent advise you on market conditions.

Determine what kind of neighbourhood you want to live in, whether you want to be close to schools and hospitals, and whether you plan to conduct renovations.

5. Make an “offer to purchase”

Once you’ve found your dream home, and got all your finances in order, you’re ready to sign an offer to purchase.

This is an agreement between you and the seller that stipulates the terms and conditions for the sale of the property.

The offer to purchase is a binding agreement, one from which you will be unable to withdraw without incurring significant penalties (unless the seller fails to fulfill a clause in the agreement).

6. Arrange a home inspection

The offer to purchase should include a requirement for a home inspection. This is your opportunity to discover any latent defects in the property.

It’s important to be aware of what your rights are when it comes to this issue. If the offer to purchase includes the voetstoots clause, then the seller will not be liable for any defects you discover after purchasing your home, including latent defects. So a home inspection is an important part of the process.

The seller will also receive a copy of the report, and it’s up to you whether to request that necessary repairs be made.

7. Apply for a home loan

Once you and the seller have come to an agreement, the next step is acquiring a home loan to fund your purchase.

A home loan comparison service such as ooba Home Loans can provide invaluable assistance during this part of the process.

We submit your home loan application to multiple banks, improving your chances of having the application approved, and of securing lower interest rates.

8. Transfer and bond registration

Once your home loan is approved, the seller of the home will hire a conveyancing attorney to transfer the home to your name. This is the transfer of property process.

Meanwhile, the bank hires a bond attorney to register the bond in your name.

You will have to pay the transfer of property and bond registration fees. You can use our Transfer Cost Calculator to determine what this will cost you.

The transfer cost includes transfer duty, a tax payable to SARS. Properties worth less than R1 000 000 are exempt from transfer duty.

The transfer of property and bond registration process takes around 3 months on average.

9. Title deed registration

Once the bond has been transferred, the title deed is registered in your name at the Deeds Office. This confirms your ownership of the property.

The bank will keep the title deed until you have paid off the home loan, although you can request copies of the deed from the Deeds Office at any time.

The Title Deed registration process usually takes around  2 — 3 weeks. However, this can fluctuate depending on the process. If things go smoothly it may be done in 7 — 8 working days, but if there is a bottleneck it can take as long as two months.

10. Move in

Once it’s all done, time to move in and enjoy your new home.

It’s wise to set aside resources for additional expenses, such as moving costs, and the cost of any renovations you intend to perform.