Essential tips for first-time home buyers in South Africa

 First-time buyers now make up nearly half of home-loan applications in South Africa. While the average age has crept up from 34 to 36 over the past decade, many are still young professionals without dependants – some even buying to rent. Most new homeowners purchase properties priced between R700,000 and R1.5 million.

No nasty surprises

When buying a home for the first time, you need to remember the risks involved. You don’t want to move in and then discover something major, like damp or structural cracks, that was simply masked with a fresh coat of paint.

To avoid this, get the necessary certificates and building plans from the previous owner before the sale goes through. Make sure you get the compliance certificates, including rates, electrical and gas certificates, as well as approved building plans for any additions that have been done to the house. If you’re not sure what to look out for, some companies offer inspections for new homeowners.

Get the right level of cover

In terms of insurance, you want to get the right level of cover at the right price. The best quote is not always the cheapest quote. Speak to your broker to understand what the cover is that you’re getting, what excesses you’ll need to pay if you claim, as well as limits and extensions.

Two kinds of insurance are available to property owners: buildings insurance and contents insurance. Building insurance covers the structure of your house, while contents insurance covers the belongings inside your home. It’s a good idea to get both.

Don’t under- or over-insure

A common mistake for new homeowners is not insuring your property adequately. Make sure that you insure your home at the replacement value and not the market value.

Market value is what you’d get if you sold your home, based on factors like location, demand, and nearby amenities. Replacement value is what it would cost to rebuild from scratch, including demolition, municipal fees, and construction. Insuring your home at market value can mean paying too much – or worse, being underinsured if disaster strikes.

It’s also always a good idea to communicate with your insurer if you make any changes to the house. Whether you add a solar geyser, water-storage tank, or build a loft, your insurer needs to know about it. Review your policy annually and speak to your broker if there are any changes to your home. Remember, your broker is there to act in your best interests.

With the right checks and balances in place, you don’t have to worry. Buying a home is a huge achievement, but protecting it is just as important. With the right guidance and cover, you can enjoy peace of mind in your new space.

* Langa is the head of strategic accounts at Old Mutual Insure.

PERSONAL FINANCE