When it comes to buying a house, the traditional route often involves navigating the complex process of home loan approvals and interest rates. But what if you could bypass all that and purchase your dream home with cold, hard cash?
If you’ve had an investment mature, an inheritance come through, or a sudden windfall, there’s no reason you can’t channel it towards real estate. Here’s an overview of the procedure to help you buy with confidence in South Africa.
Process of buying a house in cash
While buying a property with cash is less complicated than with a home loan, there are still some steps you should know. Here is how the process unfolds in simple terms:
Step 1: Put together your funds
Getting on the house hunt is a significant decision. You should take time to understand if you are ready to buy a house or if you’d rather rent. Even with paying off the cost of a property, there are still costs involved in owning and maintaining a home.
Once you’ve set your mind on this venture, you should consult with your financial advisor or bank consultant to help you put together your money into one amount; this can take time if you’re consolidating funds from several savings accounts or stocks.
Next, get a letter from your bank to show you have proof of funds to pay for a potential home. You can also use a bank statement unless you’d prefer to keep your transaction history confidential.
Step 2: Find your property
When your finances are in check, you should browse online to find a property that fits your needs. Seeff, for example, has a wide range of properties across Southern Africa. With experienced property practitioners, there’s a team ready to help you find a property that hasn’t even come onto the market as yet.
Having cash means the sale will progress at a quicker pace. For example, you won’t have to wait for suspensive conditions to the sale such as a bond approval or waiting to sell an existing property in order to make a property purchase. With the help of an experienced property professional, you can even use this to negotiate a better price or perks from the seller.
Step 3: Make your offer
After you’ve had the property inspected, you can make an offer to purchase. If the buyer accepts, you’ll find the transfer process will be much quicker than a home loan sale.
Documents you need to buy a house in cash
Even though you’re buying a property in cash, there are still documents you need to provide as part of the sales process. Please note: some of these documents are required to comply with the Financial Intelligence Centre Act (FICA) to verify your identity.
- Sales agreement accepted and signed by you and the seller
- Copies of your ID document
- Copy of your marriage certificate (if any)
- Copy of your antenuptial contract (if any)
- Proof of your residential address
- Copy of a divorce order if applicable
- Copy of an income tax document reflecting your tax reference number
- Proof of funds
For proof of residence, this can include a utility bill, bank statement, lease or rental agreement, municipal rates and tax invoice, or a telephone/cellphone account.
How long it takes to buy a house in cash
Buying a home cash can help put the keys in your hand a lot sooner. It removes the need for a home loan application and credit checks which add a significant period to the sales process. According to Ooba, as a cash buyer, you can close the deal in a few days as opposed to roughly 10-15 days when doing so with a home loan approval being required.
When it comes to waiting for the transfer of the property to take place, this can happen on an average of six weeks rather than three months with home loan purchases.
Make your cash sale effortless
Seeff’s property practitioners have the sales savvy and local area expertise to find your home and negotiate the best deal for your cash sale. Whether you’re buying your first home or making an investment, we’re here to help you make the best real estate decision. Contact us today to get started.
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