(By Chantalle Bell)
Buying your first home can be a thrilling experience, although it can also come with its own unique challenges…
It is quite common to be anxious when you’re house hunting – especially if it is your first property. A small amount of preparation can go a long way to ensuring you end up with the perfect home.
“Buying a property is both exciting and terrifying at the same time, even though it is seen as a business transaction it is an emotional affair too. Try your best to try and keep your emotions under control before you make a hard-pressed and foolish decision about a home which is financially out of your reach, or alternatively settling for something within your budget, yet not what you wanted” advises Craig Hutchison, CEO Engel & Völkers Southern Africa.
In order to avoid finding yourself drowning in “house” possibilities, set priorities and organise the house hunting process early on, you can then rest assured that you have armed yourself with as much knowledge as possible.
To help you stay focused on the important details during your house hunt, here are some tips and important decisions to think about before rushing to the property market.
1. Know your budget
Determining what you can afford is the first step in narrowing down the home search. Buyers need to know what they will be able to afford on a monthly basis, and decide ahead of time what amount they are comfortable with paying per month for their mortgage. Remember to include the other costs associated with homeownership, such as home insurance, property taxes, maintenance and utilities.
2. Check your score
The higher your credit score, the better. Good credit is like gold when obtaining a mortgage and securing the best interest rate possible. If your credit score falls short, get busy repairing it, Correct any errors that might be on your report, start paying all your bills on time, and get your credit limit raised.
3. Pre-approved home loan
Most people will need to take out a bond to purchase their first home. Applying for pre-approval with the assistance of a Bond Originator puts you in a much stronger position to buy, and you’ll feel more confident of your limitations when making an offer. You’ll be able to show sellers that you are a serious buyer and have the required finances to purchase the property. Once you know how much home you can afford, you can perform your home search based on your pre-approval amount or less.
Applying for pre-approval with the assistance of a Bond Originator puts you in a much stronger position to buy, and you’ll feel more confident of your limitations when making an offer.
4. Plan ahead…
It is crucial to determine how long you think you will be living in the property you are about to buy. It is pointless to buy a studio flat knowing you wish to start a family soon. Similarly, if your job or your financial circumstances are in any way to become unstable in the near future, make sure you will be covered financially.
5. Find a diligent agent
Once you know how much you can spend, and what your planned future holds, you are ready to begin your search for an agent. Some buyers choose to first select their agent before doing any of the above. This might be a wise choice in many cases, as if you have the right agent by your side, you are covered in all areas.
Your agent can help guide you through the financing part of buying a home and will have a better handle on the market. They will represent your interests and keep a constant eye out for newly listed homes you might love. Look for an agent who is educated and who has lived in the area for a long time, knows the market, who is knowledgeable about problems with potential homes, and who’s invested in educating you about how to buy a home.
6. Where you would like to live
If you aren’t sure about your specific location, spend some time in the areas you’re interested in at different times of the day to get a feel for the area, for instance visit during rush hour and at night time. Consider what you would prefer: an older, more established area, or a newer one? Do you like communities with plenty of activity or a secluded cul-de-sac with more privacy? Would you like to live in a gated community or are you prepared to trade some security for your independence?
To some extent, the answers to these questions will help you decide where you should start looking, but you also need to consider whether these neighbourhoods are within easy reach of work, schools, public transport, medical services, shopping and entertainment facilities.
7. Market research
The statement “Knowledge is power” applies multiple times to the process of buying property. A level-headed understanding of the property market will give you an advantage.
Once you have chosen your suburbs to buy in, take your time to learn more about that area. What is the price of homes there? Does this fall within your range? Is there potential for solid capital growth? Browse the online listings in and around your budget, go to open houses, and, depending on what’s important to you, get to know the neighbourhoods, find out about schools, crime/safety and traffic.
8. Your current housing
It might seem very unappealing to a seller if your offer is dependent on you selling your current house, as they have no idea how quickly or easily it will be to sell. It is advisable to sell your current home before you seriously start looking to buy a new one. That would mean possibly needing to rent a storage unit for your belongings and find provisional housing.
That would mean possibly needing to rent a storage unit for your belongings and find provisional housing.
9. What features do you require?
You will need to decide on the features which are required in order to meet your family and lifestyle needs. Make a careful list of the things they would regard as essential and non-negotiable, for both your current circumstances, as well as your future plans.
How many bedrooms or bathrooms do you need? Make decisions around a home office or a granny flat, how much parking is required, and whether or not you need a large garden for their children and pets. This will make it easier for the real estate agent working in your chosen area to help you find your ideal home, and not waste anyone’s time showing you unsuitable properties.
10. Sectional title or full title?
Sectional title units are less maintenance intensive for homeowners. All exterior maintenance of the property and the complex are taken care of by the body corporate, however, this will require the homeowner to pay a levy or monthly association fee to cover services and repairs within the development. On the other hand, full title homes come with more privacy and the freedom to add on or renovate without requiring permission from the body corporate. Along with the freedom comes the full financial responsibility for all maintenance.
House hunting is a learning experience and buyers need to take into account that there is no such thing as the perfect house. Ultimately you want to find that home that incorporates the things that are most important to you.