Buying a home is a huge step. Getting it right can dramatically improve your lifestyle and financial future. Getting it wrong can leave you regretting the day you ever decided to stop renting.
So, how to ensure you’re making a smart buy? David Jacobs, Gauteng Regional Sales Manager for the Rawson Property Group, shares his insider tips.
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Choosing the right neighbourhood
“The area you live in plays a huge role in your ability to enjoy your home. It can also directly affect the value and growth potential of your investment,” says Jacobs. “Since you can’t just pick up and move your property if you don’t like where it’s located, finding a neighbourhood that meets your needs should be the first step of any house hunt.”
Price
Jacobs says the easiest way to narrow your neighbourhood choices is to exclude those that fall outside your affordability.
“The best buys are in neighbourhoods with property prices at your affordability level and higher.”
Amenities
If a neighbourhood is priced right and safe, it’s time to consider its amenities. Does it provide access to the essentials you need for everyday life?
“Make a list of your must-haves, from public transport to good school zones,” says Jacobs. “Remember, a property is a long-term investment, so don’t just think of your needs now. Imagine what you’ll want in five- or ten-years’ time as well.”
Connection
Amenities are only part of a neighbourhood experience. If you’re going to live there, it’s also important to feel like you connect with the community on an emotional and social level. That means finding somewhere close to important friends and family, with an atmosphere you enjoy (busy and bustling or quiet and peaceful) and neighbours you can see yourself befriending.
Choosing the right home
Once you’ve settled on your ideal neighbourhood(s), it’s time to dive into the real house-hunting. Jacobs suggests starting your search on the major online property portals, but also approaching a local real estate expert with your property wish list.
“Most properties are listed online, but there are still gems that sell before they’re ever made public,” he says. “If you want to be in on that action, you need a real estate agent keeping an active eye out for properties that meet your needs.”
As an added bonus, local real estate agents will be able to give you the inside scoop on the neighbourhood, confirming your choice or raising red flags you’ll be glad you knew before buying in.
Good structure
As for defining your needs, he says: start with the essentials. The right property size, the right number of bedrooms and bathrooms, and any other must-haves like secure parking and a home office, for example.
“Try not to be put off by surface aesthetics like paint colours,” he says. “Good basics in good condition are much more important than a seller with the same taste in décor as you.”
Again, Jacobs reminds buyers that the right property should accommodate their needs for several years to come.
“Make sure your must-haves cover future needs as well,” he says. “You may only need two bedrooms for now, but you’ll wish you had more when that work-from-home opportunity or second child comes along.”
Good condition
Unless you’re specifically looking for a fixer-upper, you’re going to want to find a property in good condition as well.
“Sellers are required to provide a list of any defects, but these aren’t guaranteed to cover absolutely everything,” says Jacobs. “It’s still essential that buyers do their own investigation and book a professional home inspection before they buy.”
Good layout
It’s relatively easy to knock down a wall here and there to improve a property’s flow, but it’s a whole other ballgame to move a kitchen or a bedroom to a different part of a house.
“Make sure the basic layout of the property supports your lifestyle,” says Jacobs. “So, if you’re an entertainer, look for a good flow between kitchen, dining room and outside areas. If you have kids, make sure there is enough room indoors and outdoors for them to play and do their homework.
Room for improvement
It’s always nice to put your own stamp on a new home, but if upgrades are part of your plan, he recommends making sure your property has room for improvement.
“If you’re buying at the upper limit of a neighbourhood’s price range, there’s a risk that any improvements you do won’t add materially to your property’s value,” he says. “Rather buy a little lower if possible so your efforts will pay off in the long run.”
No major compromises
No property is perfect, and most buyers will need to make minor compromises. However, he recommends avoiding properties with major features you absolutely dislike.
“Don’t compromise on the big things,” he says. “If you're not that into Victorian houses or can’t handle face brick, it’s not worth trying to convince yourself to live with these feelings. You need to be proud and happy and comfortable in your home. If there’s anything that materially and irreversibly detracts from that, it’s not the property for you.”
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SEE | Property24 101 - Buyer and Seller specific advice
RE/MAX of Southern Africa runs us through the A-Z of property transactions: Read full article here: Exploring property transactions: an A-Z guide
Asking Price:
The price set for the home, usually suggested by a real estate professional based on a competitive market analysis and agreed to by the seller. Depending on demand, buyers can choose to make offers above or below the asking price.
Bond Originator:
A free service that can help buyers find the best deal on their home loan. Bond originators have several services that will help buyers navigate the bond application process more efficiently.
Conveyancer (also known as a transferring attorney):
A legal professional who will attend to all the paperwork and other legalities that are required for a property transfer to take place.
Deposit:
An amount of upfront cash provided to the buyer upon acceptance of an offer to purchase. The rule of thumb here is roughly 10% of the asking price. A deposit is not a legal requirement but can make a buyer’s offer more appealing and could help the buyer acquire the remaining home finance.
General Valuation Roll:
A document that presents a value upon which household municipal rates will be calculated until a new roll is issued. It is important to check this when it is released to make sure you do not end up paying more for municipal rates than what the home is truly worth.
House Price Appreciation:
A percentage of growth calculated based on average house prices in an area (usually calculated at a national level). These averages can provide an indication of how much more a property will cost in a year’s time. For landlords and tenants, these averages can provide an indication of what a fair annual rental escalation could be.
Interest Rates:
There are various rates at which interest is calculated on debts, including home loans. Consumers should focus on the Prime lending rate, as this is the base rate that banks use when offering loans to consumers. This will either be above or below Prime depending on how good your credit score is.
Off market sale:
When a property is for sale, but it has not yet been publicly advertised or listed on any property portals.
Pre-approval:
A certificate issued by a bank that provides a buyer pre-approval of a certain loan amount, calculated based on what a buyer can afford. These amounts are only 100% finalised after the bank has completed a property valuation and has received a signed Offer to Purchase on a property.
Reserve Price:
The minimum price set for a home when it is sold via auction.
Sole Mandate:
A written agreement that places the responsibility on a single agent for a period of time. It is often far more effective to sign a sole mandate and allow one agent the space to secure the best sale. A sole mandate is also a more convenient option because sellers will only have to liaise and deal with one agent rather than several.
Turn-key property:
A property that is move-in-ready, with no need to do any further renovations or updates.
Unconditional offer:
An offer to purchase that is not subject to any other conditions, such as a home loan or private home inspection, etc.
Zoning: the type of property that can be built on a plot of land. Local planning authorities control zoning permissions.
“There are a lot of moving parts to any property transaction. That is why the real estate profession exists. Property professionals are there to help guide clients through these transactions. Never feel afraid to ask questions if you are ever unsure of anything during the process,” says Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett.
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In an article published on 11 May 2023, Pam Naidu, Director of Sales and Marketing at Devmco Realty, shared some key learnings which every first-time buyer should know when deciding to purchase their dream home.
1. Location, location, location! Also known as the Three L’s:
There are three micro locations that define the actual location of a property on a macro level. If the property you want to purchase is in an estate for example, you may want to find out what area of the estate it sits in and what that actual area provides, such as a good sea views, etc.
2. Financial stability is important:
Get your credit card payments and debts in order.
3. Budget:
Establish a realistic budget to determine your affordability. Create a budget and try to stick to it so that you can enjoy the process and not put yourself under too much pressure.
4. Find a trustworthy real estate agent:
This is the person that will assist in picking out your potential home and exploring your new neighborhood and is also responsible for scheduling tours and negotiating important contracts on your behalf. Ensure that this is someone you trust, to have your best interests at heart.
5. Get approved:
Get a pre-approval letter before you start shopping! This will help you have realistic expectations on what you can afford.
6. Be mindful of transfer and closing costs:
First time buyers usually tend not to factor these costs in, and it comes as a huge surprise at the end. Doing your homework is a very vital part of house hunting.
Becoming a first-time homeowner can be an overwhelming experience and requires careful consideration of several factors. With the expert advice from Devmco Realty, first-time home buyers can make an informed decision and successfully unlock the door to their dream home.
*Article updated 26 December 2023
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