Buying your first home can be pretty daunting – but it is a great way to begin investing in your future and paves the way for you to begin climbing the property investment ladder.
READ: Residential property market predictions and buying tips
Right now, Tyson Properties is seeing renewed interest in first-time homes with new buyers queueing up to take full advantage of the fact that we currently find ourselves in a buyers’ market – which means that prices are good and sellers are eager.
To ease your transition into property ownership and help you make what is probably your biggest investment to date, Tyson Properties has 10 tips:
Find your neighbourhood: Before setting your heart on a particular street or neighbourhood, do your research. Find out the average prices and the potential re-saleability of a property. If you spot lots of ‘For Sale’ signs, find out why so many people are leaving. Convenience is also key, so check where you can do your shopping, how close a suburb is to your place of work as well as key facilities like doctors, schools and restaurants. Find out about security in the area. Chat to those already living there who will fill you in on the pros and cons when it comes to everything from noise to traffic congestion.
Be prepared: Save up for a deposit. This is the best way to secure a bond at a good rate. The more money you put in at the beginning, the less you will owe and the more inclined a bank will be to sign you up. Better still, get prequalified for mortgage finance. That way, you’ll know how much you have to spend.
Calculate affordability: The amount of credit a bank will give you depends on how much you earn, your expenses and the leftover disposable income you have to service your debt. Balance your lifestyle needs with your income so that you do not become “house poor” and have to sit at home whilst friends are out having fun. The credit check and affordability assessment your bank will require when you apply for finance will be a useful safety net and provide a reasonable idea of what you can afford. Confine your searches to properties in the recommended price range to avoid disappointment.
Click here to check your home loan affordability
Stick with the professionals: It is always good to get advice from friends and family, but also remember that there are plenty of professionals to guide you on your buying journey.
Understand the cost of living: Apart from upfront costs such as transfer fees, find out what other expenses you are likely to encounter prior to move in – an internet connection, home security, renovations and repairs. Then look at your potential monthly costs factoring in levies, garden services, rates and insurance.
Shop around: Take time to educate yourself about what’s available. Don’t buy in haste, without considering the alternatives. When you have a sense of what’s out there and the prices, you’ll be able to make better decisions as an informed buyer.
Spot potential problems: Be aware of hidden defects and check for things that are not working properly - from faulty wiring to water leaks or even subsiding walls. If you want to make an offer, bring in a specialist to inspect plumbing, electrics and structure, with particular attention to the roof. If you uncover something, it doesn’t necessarily mean you won’t buy the property, but it puts you in a position to negotiate on the price.
Time it right: Know the difference between occupation and possession. It is not your house until the transfer is registered at the deeds office. If you are renting, make sure that you know the notice period so that you do not find yourself paying both your first bond repayment and final rental at the same time. Check the requirements for occupational rental with your agent should you need to move in ahead of transfer and, remember, if you spend money on alterations before this happens, you could lose it if the transfer doesn’t go through.
Read the rules: If you are moving into a housing estate, chances are there are plenty of rules and regulations that will impact on your lifestyle. Many complexes have restrictions on pets, so find out if you can accommodate your pooch ahead of time rather than finding he is not welcome after you have purchased. Parking, gardening and even decorating rules need to be checked ahead of time.
Plan ahead: If you are buying a property off-plan, don’t rely on artist impressions and brochures but rather make sure that you have the full details in terms of the square-meterage of each room. If you are buying an older home, insist on a valid set of building plans that are approved by the municipality. Even if your bank doesn’t demand approved plans, you might need these for insurance claims, if you wish to add on to your property in the future and for future buyers when you are ready to sell. Redrawing them can be expensive.
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“Buying a home is a significant life step and major financial commitment and rushing into buying a property can lead to costly regrets and dissatisfaction down the line,” says Cobus Odendaal, CEO of Lew Geffen Sotheby’s International Realty in Johannesburg and Randburg. (Read full article here)
“The key to a successful and fulfilling home-buying experience lies in patience, careful consideration of numerous factors and thinking long-term rather than only fulfilling immediate needs.”
Odendaal says that the following mistakes and omissions can easily lead to regret purchases and unwise investments:
Failing to Define Your Priorities:
One of the most significant mistakes when purchasing a property is failing to clearly define your priorities. It's vital to have a clear understanding of your needs, desires, and deal-breakers before embarking on your home search.
Consider factors such as location, size, layout, amenities, and proximity to work and schools. Create a list of non-negotiables and use it as a guiding compass throughout your property search.
Skipping the Research Phase:
One of the most prevalent errors when seeking a new property is neglecting thorough research and impulsive decisions can lead to mistakes such as selecting a location that doesn't align with your lifestyle or needs.
Prior to committing to a property, take the time to research the neighbourhood, its amenities, proximity to work, schools, and other essential facilities. Visit the area at different times of the day to get a comprehensive understanding of the environment.
Online resources, local forums, and community websites can also provide invaluable insights and help you make an informed decision.
Neglecting Proper Budgeting:
It's crucial to establish a realistic budget that encompasses not only the property price but also additional and future costs such as taxes, insurance, maintenance and potential renovations.
A comprehensive budget ensures that you can comfortably afford the property without compromising your financial stability.
Overlooking Future Growth and Needs:
Consider your future plans and potential life changes when purchasing a property. While the current layout may suit your needs, will it accommodate potential family expansions or lifestyle shifts?
Opting for a property that aligns with your long-term goals can save you from the hassle and costs of relocating sooner than you had planned.
Skipping Home Inspections:
Foregoing a comprehensive home inspection can be a grave error, especially when buying an older home. Hidden issues, such as structural problems, plumbing or electrical concerns, and potential pests, can lead to substantial expenses post-purchase.
Engage a qualified home inspector to thoroughly assess the property's condition, allowing you to make an informed decision based on accurate information.
Succumbing to Emotional Impulses:
Emotions can cloud judgment, especially when purchasing a property. Falling in love with a property's aesthetics without considering practicality and functionality can lead to disappointment in the long run.
Maintain a rational mindset and critically evaluate the property against your predefined criteria.
Overlooking the Fine Print:
Whether you're signing a lease or purchasing a property, reading and comprehending the contract is crucial because ignoring the fine print can lead to unpleasant surprises later on.
Ensure you understand the terms, conditions, and obligations associated with the property. If needed, seek legal advice to clarify any ambiguities or potential pitfalls within the agreement.
Succumbing to Market Pressure:
In competitive real estate markets, it's easy to succumb to pressure and rush into a decision, especially if you know that there are other buyers interested in the same property.
While it's natural to feel a sense of urgency, it's crucial to remain patient and not settle for a property that doesn't meet your requirements. Take your time, explore multiple options, and don't let market dynamics dictate your choices.
Disregarding Resale Value:
Life is full of surprises, and circumstances may change, necessitating a property sale. Neglecting to assess the property's potential resale value and marketability can leave you trapped in a less-than-ideal situation if you need to sell. Research the property's history, growth trends in the area, and potential for appreciation.
Not Seeking Professional Guidance:
Navigating the complexities of the real estate market can be overwhelming and engaging an experienced real estate agent, financial advisor and legal expert can provide invaluable guidance throughout the process. Professionals can offer insights, negotiate on your behalf, and ensure that your interests are protected.
“The path to a successful property purchase is paved with thoughtful consideration and deliberate steps,” says Odendaal.
Avoid the allure of rushing into a decision and take the time to define your priorities, set a realistic budget and thoroughly research the property and its surroundings.
“Remember that a property is not just a purchase; it's an investment in your future and the place in which you raise your family and escape from the hustle and bustle.”
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