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More Women Are First Time Home Buyers in South Africa Than Men

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Johannesburg, 23 August 2022:– You’re a strong, independent woman who can do anything on your own — including buying a home. This is beyond empowering, but you also want to be as informed as possible going into the process, to ensure you get an amazing space at a fair price.

The club you’re about to join has shown a steady increase in women’s buying power in the residential property market. Lightstone data recently released shows that over the past six years, single female first-time property buyers have outnumbered males, and married couples. There has been a steady increase in women buying residential property, with 60% of bond applications being women

Black women in particular are an important market segment according to  property analytics firm Lightstone.

Shaun Rademeyer , CEO of MultiNET Home Loans  says, “Today, there are more women in the workplace than ever before, and they are buying homes – no matter the size of their salary,” “Even when they end up buying jointly with their partners, or in their partner’s names, data suggests that women increasingly have influence and decision-making power, in addition to buying power.”

More women are first time home buyers in South Africa than men, according to property analytics firm Lightstone. This has already been the trend for the past six years.

Things Every Woman Should Know About Buying Her First Home

To get started, you already know you need to find a great real estate agent and get preapproved. However, the more informed you are, the better your chances of landing a new home that makes you truly happy.

Want to learn more? Here are eight things every woman should know about the homebuying process before purchasing her first property.

Be Willing To Negotiate

When it comes to negotiating, Shaun Rademeyer , CEO of MultINET Home Loans , recommends that you be prepared to move out of your comfort zone.

Choose a Home That Fits Your Lifestyle

A property you tour might be nice, but Rademeyer advises you to take your lifestyle into consideration before making a final choice.

“For example, if you are an executive and travel a lot for work, then you may want to consider a townhouse or complex versus a single-family home,” he said.

This is due to the fact that townhouses and complexes typically require less maintenance than a single-family home.

“The benefit of townhouses and apartment developments is that you won’t have to worry about hiring someone to do the necessary upkeep of the exterior or doing it yourself,” he said. “With townhouses and developments, the homeowners’ association almost always will take care of that for you.”

Get the Right Insurance Coverage

If you have a mortgage, your lender may require you to obtain homeowner’s insurance. However, Shaun , reminds us that it is important to make sure you have proper comprehensive coverage for your property.

This might include flood, earthquake or sewer backup insurance, depending on your area. To make sure the right insurance coverage fits your budget, he recommends requesting an estimate for homeowner’s insurance before making an offer on a property.

Request a List of Vendors From the Previous Owner

Chances are the current owner of the property has a go-to list of service professionals — i.e., plumber, electrician, and more — they call for repairs and routine maintenance. These people are already familiar with the home, so Rademeyer recommends asking the seller to make a list for you with their names and numbers.

Have a Double Emergency Fund on Hand

Generally speaking, adults are advised to have an emergency fund that covers three to six months of living expenses. However, Shaun suggests having more cash at your disposal, as a solo owner of the property.

“Make sure to have double the emergency fund that a couple would,” he says. “Since you are alone, should things break or need repair, it all falls on you.”

Put Safety First

You can’t put a price on safety, so Rademeyer emphasises the importance of ensuring this is a key factor in your home search. “Make sure you are in a neighbourhood and in a home where you feel safe”, “homes with gated access, streets that are well lit, attached garages with interior access to the house and homes already wired with alarm systems are great features to look for.”

Know How the Purchase Could Be Affected by Marriage

Right now, you may be single , but that could change in the future. Rademeyer recommends that single women looking to purchase a home must consider how a potential marriage would impact their property rights, so conduct research to know where you stand.

If you need additional guidance, he recommends reaching out to an attorney who specialises in marriage law to ensure your asset is fully protected.

Be Aware of Bond and Transfer Costs

Saving up for a down payment on a home is a big deal, but that’s not the only major expense associated with the transaction. You’ll also need to have enough cash for the legal costs associated with finalising your home purchase.

What Is Transfer Duty?

When buying a home, it’s important to remember that the price tag on the property is not all you’re going to have to budget for. It’s best to have between 8 and 10% of the purchase price put aside for other purchase expenses, including bond costs and transfer duties. Transfer Duty is a government tax levied to transfer the property from the seller’s name into the buyer’s name.

According to SARS, the transfer duty is the tax levied on the value of any property acquired by any person by way of a transaction – or any other means. Transfer duty applying to property refers to land and fixtures, including real rights in land, rights to minerals, a share or interest in a residential property company, or a share in a share block company.

Who Pays the Transfer Cost and When?

The burden of property transfer costs falls on the shoulders of the buyer and is payable within six months from the date of acquisition. If the buyer fails to pay the transfer costs within this timeframe, interest will be added at a rate of 10% per year for each completed month – which is calculated as the first day from the expiry of the interest-free, six-month period to the date of payment.

It’s important to note that, in the case of conditional sales on a home, the six-month period starts on the date that the transaction was entered into, not the date when the contract becomes binding. This means the period starts on the last date of the party signature to the agreement, not the date the conditions are fulfilled.

Who Do You Pay the Transfer Duty To?

The transfer costs are paid to the estate agent or conveyancing attorney who is responsible for the transfer of the property into your ownership. In South Africa, it is actually the seller who gets to appoint the conveyancing attorney, while the cost is still covered by the purchaser. This makes negotiating fees with the conveyancing attorneys trickier, however, there is nothing stopping the buyer from putting forward suggestions of conveyancing attorneys. Just take note that the conveyancing attorney’s fees are separate from the transfer duty costs.

How Do You Calculate the Transfer Cost?

SARS is responsible for determining the transfer duty amount, and this is calculated according to the value of the property – not the selling price. However, in most cases, the selling price of the property will represent the property value, so it’s easier to work out an estimate. Red flags for SARS will be when a property is being sold within a family, where the selling price could possibly undercut the actual value. Use the MultiNET Home Loan transfer cost calculator to get a useful estimate.

What Are the Transfer Duty Rates?

Before March 2020, the transfer duty threshold was limited to properties of R900 000. However, the transfer duty threshold has since been lifted to R1m, which means that properties valued below R1m are not subject to any transfer costs.

The Transfer Duty Rates for 1 March 2020 to 28 February 2021

These costs apply to properties that were purchased after 1 March 2020 over R1m in value.

  • From R 1 000 001 to R 1 357 000, the transfer duty is calculated at 3% of the value above R 1 000 000.
  • From R 1 375 001 to R 1 925 000, the transfer duty is calculated at 6% on the value above R 1 375 000 PLUS a flat rate of R 11 250.
  • From R 1 925 001 to R 2 475 000, the transfer duty is calculated at 8% on the value above R 1 925 000, PLUS a flat rate of R 44 250.
  • From R 2 475 001 to R 11 000 000, the transfer duty is calculated at 11% of the value above R 2 475 000 PLUS R 88 250.
  • From R 11 000 001 and above, the transfer duty is calculated at 13% of the value exceeding R 11 000 000 PLUS R1 026 000. On average, buyers pay 2% to 5% in closing costs, according to Rademeyer.

Talk to your expert and efficient MultiNET Home Loan consultant about the variety of charges that might include transfer taxes and an origination fee. Let us guide you in your home buying process, from preapprovals, obtaining the best home loan deal to Home-Owners Insurance.

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Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE
Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.