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The process of buying a house privately in SA

The process of buying a home privately is different in a number of ways from buying one through an estate agent. Here's what you need to know.

Process Buying House Privately

Article summary

  • Private sales are not subject to the Consumer Protection Act.
  • Be sure to research prices before buying a home privately.
  • You’ll need to scan the Offer to Purchase thoroughly to ensure everything is in order.

Buying a house is an exciting prospect, whether it be through an estate agent or from a private seller. Of course, the process of buying a home privately is different in a number of ways. Here are the steps to ensure the process goes smoothly.

1. Have the home thoroughly inspected for defects

In most cases you will be buying the home voetstoots, a phrase originating in Roman-Dutch law that translates as “testing something by shoving it with one’s foot”. It implies that when you buy something, what you see is what you get and it’s your responsibility to give it a kick with your foot, if that’s what you need to do to test it.

Voetstoots obviously has significant implications for homebuyers, who will be concerned about the prospect of ‘latent defects’. This refers to problems with the home that are not visible at first glance, such as a leaking roof, a faulty water pipe, or maybe rising damp that won’t be apparent if you are buying in summer.

According to the voetstoots clause, if you discover such defects after you’ve purchased the home, they’re your problem. Private sales are not subject to the Consumer Protection Act. So conduct a home inspection with an expert in order to mitigate the risk of hidden defects.

2. Research prices

Sellers may overvalue their home and take advantage of the buyer’s ignorance. You could check the value of other homes in the area to get an idea of what you should be paying.

3. Conduct a thorough home viewing

In most cases, you’ll be purchasing the home based on what you saw during the home staging. So you may want to attend more than one, and ensure you know as much about what you’re in for as possible. As you’re viewing the home, try to imagine the experience of living in it, and take into account what renovations you may need to have done.

Also visit at different times of day so you can get an idea of what the neighbourhood is like. This is especially important if you’re hoping for a quiet property.

4. Scan the Offer to Purchase

It’s down to you to ensure the Offer to Purchase is watertight. You can have an attorney look through it before you sign.

Elements you should pay particular attention to include:

  • Fixtures Find out what fixtures are specifically excluded from the property sale. For example, you might think window blinds would be left behind, but if they aren’t specified in the agreement, the seller wouldn’t be required to leave them.
  • The 72-hour clause This entitles the seller to keep marketing the property even after the Offer to Purchase is signed. If they receive a better offer, they can provide the original buyer with written notice, informing them that they’ll have to waive the suspensive conditions and go ahead with the offer to purchase within 72 hours, or the offer to purchase will be rendered null and void, freeing the seller to sign a deal with the new buyer.
  • Conditions of Sale Check these carefully as the sale cannot go ahead until the conditions are met. Some of these conditions may have a time limit which you must take into account, and possibly negotiate.
  • Relevant dates These include the expiry date of the offer, and the date of occupation.
  • Price Ensure that the price listed on the Offer to Purchase is the one that has been agreed upon.
  • Occupational rent If the buyer occupies the home before it is sold, the seller is entitled to charge occupational rent. Ensure the rental price is agreed upon by both parties.
  • The National Home Builders Registration Council (NHBRC) certificate This assures that the home builder is registered and meets the necessary qualifications and quality assurance requirements. The seller may need to provide this if the home is a new development.
  • Check the details carefully Even a misspelled or misplaced word can disrupt the agreement. For one, ensure that both parties involved in the agreement are correctly identified.

Going ahead…

Estate agent or not, should you wish to go ahead with a purchase, bear in mind that a home loan comparison service such as ooba Home Loans can help you acquire the best deal on your home loan. They also offer a range of tools that can make the home buying process easier. Start with their Bond Calculator, then use the ooba Home Loans Bond Indicator to determine what you can afford. Finally, when you’re ready, you can apply for a home loan.

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