Steps to buying

For non-residents buying in South Africa, the process can often be complex and time-consuming. Legislation, foreign exchange regulations and economic factors can all act as obstacles. Fortunately Barclays Buying Abroad can help.

The following steps provide a snapshot of the buying process so you can see, at glance, what you need to do before your property can become yours:

Before you buy:

1. Find out how much you can borrow - This is dependent on your income and the type of mortgage you want. Bear in mind the maximum loan to value (LTV) amount (see deposit section of Costs to consider) and your other expenses. It’s important that you don’t over-stretch yourself to make your mortgage payments.
2. Set your budget - Be realistic as you calculate all the costs involved. You'll have a variety of professional fees, taxes and charges to pay on top of the price of your property. Ask your South African attorney to clarify all costs, such as transfer and bond costs, local council deposits and occupational rent. Costs fluctuate so make sure you have an up-to-date breakdown to incorporate into your budget.
3. Know what you’re looking for - The first thing to decide is what you need and in which area. There are many types of property you can invest in (sectional title ownership, cluster developments, 'off-plan', etc). Speak to your attorney or estate agent to find out more about each property type.
4. Search for a property - This is the most exciting part of the buying process. Once you’ve decided what you’re after, and where, speak to friends and relatives about the area or make contact with people living in the chosen area. Find out about issues such as transport, schools and crime or security. When it comes to finding a property, nothing beats actually going to a location to check it out in person. Once there you can browse through weekly property advertising supplements and other methods of property advertising, such as the internet, in order to get a good idea of the homes available and the current asking prices in various areas. If you are visiting South Africa, drive around areas of your choice to look for properties with ’For Sale‘ signs. Consider the proximity to your place of work, schools, shopping centres, medical facilities, police stations, post offices, your bank, public transport and other amenities that are important to you. Ask your estate agent about the profile of the suburb, the average cost of houses in the area and the future potential of the suburb from an investment point of view.
5. Carry out a price check - If you’ve been out of the country for a while, you may need to refamiliarise yourself with property prices in South Africa. It's worth spending time doing some research on prices for comparable properties in the area where you want to buy. This will make sure you don't pay over the odds for your property. Unfortunately, some sellers assume that a buyer, particularly from overseas, may not know the local market and set an unreasonably high sale price – don't get caught out!

With these matters dealt with, you're in a much better position to go ahead with the purchase once you've found your ideal property. The next steps for you are:

6. Negotiate a price - Now is the time to haggle! Negotiate until you reach a verbal and non-binding agreement with the seller about the sale price and what is included in that price (for example, fittings that may be left behind). At the moment, everything is informal and there's no need for money to change hands.
7. Sign a deed of sale - Now is the time to start to formalise the sale. The deed of sale normally takes the form of a document titled 'Offer to Purchase'. The document sets out, in detail, the terms and conditions of the sale. It is imperative that you understand and agree with its contents before signing. If you’re not sure, consult with an attorney. Once you have signed an offer to purchase, and it’s been accepted in writing by the seller, you are legally bound to the transaction.
8. Five-day cooling-off period - After signing an offer to purchase you have a five-day cooling-off period when you can withdraw and cancel the offer to purchase if you want. NB: This only applies to properties with a purchase value less than R250,000. Once the cooling-off period has lapsed, the offer to purchase becomes a legally binding contract.
9. Pay a deposit - Once the sale has been negotiated, any deposit should be placed in either a registered estate agent’s trust account or an attorney’s trust account until transfer of ownership is completed. The deposit is likely to be the difference between the purchase price of the property and the amount of the loan. Any interest that is accrued will be paid back to you on written request.
10. Arrange your mortgage or alternative finance - Absa has a number of mortgages to help you buy in South Africa. Look at our Mortgages section to find out more.
11. Arrange a valuation - With a mortgage from Absa, we will arrange a valuation of your property on your behalf as part of the application process.
12. Instruct your solicitor to begin legal investigations - You'll need a bank account in South Africa during and after the buying process. Apart from the property itself, you'll need to pay professional fees, taxes and charges on the purchase and utility bills and local taxes once the property is yours. Look at our Everyday Banking section to find out more.
13. Conveyancing Attorney -In South Africa, an attorney specialised in property known as a conveyancer will be appointed to give effect to the transfer of property. The seller can choose who they want to appoint as their conveyancing attorney. Although appointed by the seller, the conveyancing attorney will oversee the whole property transaction, make sure all property taxes are paid and ensure that the sale is properly registered.
14. Completion - At last, completion day arrives! The final contract needs to be signed by you in the presence of a mandated authority in the UK, before the SA conveyancer can proceed.
15. Pay for the property and applicable taxes - At this point, you pay the remainder of the purchase price to the conveyancing attorney along with his fees and any other taxes due.
16. Title will be registered at the deeds registry - The very final step of the buying process is when the seller receives the funds for the sale of the property and the conveyancing attorney registers the deed of sale with the deeds registry (this could take up to three months). You are now officially a homeowner in South Africa – congratulations!