The decision-making process when buying your first home

WHEN purchasing a residential property, whether for your own use or as an investment, you need do a due-diligence exercise before signing a sales agreement, advises Roper & Associates.

This includes:

1. A physical audit

Identify all the positive and negative features/characteristics of the property, including:

• Gourmet kitchen/dysfunctional kitchen.

• Sea views/poor outlook.

• Tasteful internal decor/pink and purple walls.

You should then separate this list into three groups:

Group A – Likes/advantageous features.

Group B – Dislikes, repairs and renovations, necessary extensions. All are possible with the necessary spend (you are in control).

Group C – Dislikes, disadvantages, annoyances, functional and economic obsolescence that no amount of money will improve/repair/replace (you are not in control).

This group is the most important one and possibly the game-changer in that it is the main contributor in whether the value of your property appreciates or depreciates. The features include:

• Building orientation – north-facing is best.

• Stormwater control – avoid being

below road level.

• Avoid abundant/high embankments; and retaining walls, especially on boundaries shared with unco-operative neighbours.

• Avoid noise and visual pollution, such as opposite a school or on busy/ steep roads.

2. Legal audit

Identify the limitation of your “real rights” on the property by either researching or obtaining:

• Title deeds and the surveyor-general’s diagram that shows:

1. Servitudes (that is below ground pipelines and so on).

2. Road reserves.

3. Legislated restrictions – usage. 4, Conservation areas.

5. Water rights.

• Town planning controls – maximum allowable development of:

1. Building/ floor area.

2. Height.

3. Building lines.

4. Usage (see websites of municipalities, conservation of land – DMOSS, and conservation of buildings – AMAFA).

5. Local authority-approved architectural plans.

6. Encroachments (by the neighbours or affecting the neighbours).

7. Body Corporate/home Owners Association rules and regulations including: – That sectional title plans are up to date.

– Security of tenure over exclusive use, parking bays, storage, gardens, and so on.

– Copies of Body Corporate minutes of meetings.

3. Financial audit

• Municipal rates – arrears or over-valued (high rates).

• Body corporate levies – arrears or anticipated special levies (due to inadequate financial planning) – obtain body corporate financials.

• Body corporate financial status (savings fund) – competent management.

Roper & Associates says you need to make property purchasing decisions based on sound, logical research as opposed to emotional impulse.