After months of house hunting, a multitude of legalities and reams of paperwork, you’re finally ready to realise your dream and move into your very own home but, as it’s also one of the largest financial investments you’ll ever make, it’s important to start off on the right footing.
This is according to Cobus Odendaal, CEO of Lew Geffen Sotheby’s International Realty in Johannesburg and Randburg, who says that whilst buying a home is a smart investment and offers a lot of benefits for you and your family, owning a home also comes with a few disadvantages and many responsibilities.
“You now have additional monthly expenses like building insurance and municipal rates and, unfortunately, you can no longer just pick up the phone to call the landlord when something goes wrong – you are the landlord.
READ: What will you pay for your home loan if interest rates hike again
“It can easily become overwhelming not to mention costly, especially if you’ve bought an older home that requires updating but, if you are prepared from the get-go, you will experience all of the joy with few of the potential headaches.”
Odendaal offers the following new homeowner tips to make your transition to property owner a little smoother:
1. Create a homeowner’s file
Before you move into your new home, create a binder or allocate a drawer in your filing cabinet for important documents relating to your home, including your mortgage and home insurance paperwork.
Once you’ve moved in add all your appliance user manuals and warranties and keep all receipts relating to home improvements as you will need these for tax purposes when the time comes to sell.
After your move in, use the same binder to store all of the guides and warranties for your new appliances. Store receipts for any home improvement and moving expenses here as well. You’ll want to hang on to these for your taxes. You can also start collecting contact information for reliable contractors in this binder.
READ: If there is no body corporate yet, who is in charge of your ST scheme?
2. Start an emergency house fund
You never know when something is going to go wrong, or how much it is going to cost and, as repairs are now your responsibility, this can really put a strain on your finances if you aren’t prepared.
And the longer you live in your home, the more likely you are to experience surprise issues like plumbing faults and electrical failures or even big-ticket repairs like new roofing, plumbing, heating or roofing issuess, so start an emergency savings account as soon as possible and try to contribute to it religiously.
3. Make friends with your neighbours
This is a good idea for a number of reasons. Building a relationship with your neighbours will help to resolve disputes more easily should they ever arise, enable you to get good recommendations for any services you may need and it’s also better for security as neighbours who know each other, look out for each other.
READ: Ten holiday home hotspots to invest in this summer
4. Put together a basic toolbox
The last thing you want to become is that new neighbour who always borrowing something and you don’t want to have to call out a contractor every time anything small goes wrong.
Purchasing your first home has likely left you stretched thin money-wise, so you don’t need to go overboard but it’s a good idea to buy the essential tools you're most likely to need.
5. If possible, get small projects finished before you move in
It is a good idea to complete certain small projects such as painting rooms or removing old wall-to-wall carpeting before moving into your new home. Your home is then liveable and you have time to plan bigger projects properly.
6. Wait to start any large projects
Home improvement projects are expensive and, to avoid completing unnecessary projects, it’s always best to live in your new home for several months before making any final decisions.
This will allow you to get a feel for your home, how the existing layout works and what really needs to be changed. It will also give you time to save for the cost of any upcoming projects.
7. Focus on upgrades that will give you the most bang for your buck
Unless you have a generous budget, it’s best to focus on improvements that will give you the most return on your investment. Take the time to do a little research - find out what the most popular features are in your area and how much the work will cost.
READ: Should you rent or buy your first flat or house?
As a rule of thumb, projects that typically yield a good return include kitchen and bathroom upgrades, repainting in neutral tones and an attractive outdoor living area or deck,
8. Complete one project at a time
It may be tempting to get finished with all your improvements as soon as possible, but don’t work on multiple home projects at once. Not only will you exhaust your finances, but you will also make your new home unliveable and add unnecessary stress to your everyday life.
9. Pay attention to your energy usage
This is especially important if you’ve bought a bigger home than you lived in before. Pay attention to how your home is using energy and learn how to reduce your carbon footprint and save money. You’ll be surprised how small changes can affect your electric bill and ease your monthly expenses.
Homeowner tips and tricks for reducing your energy costs:
Lower your water heater’s thermostat to 120 degrees.
Switch out lightbulbs for energy-efficient LED lightbulbs.
Move your refrigerator away from your oven.
“Buying your first home and getting your foot on the property ladder is an exciting time and, if you are properly prepared, it will be the best investment you’ll ever make,” says Odendaal.
READ: How deposits work for first-time buyers
Mike Greeff, CEO of Greeff Christie’s International Real Estate previously shared some real estate terms.
Greeff explains the real estate terms:
1. Term: OTP - Offer to purchase
This very important document is submitted once a prospective buyer is ready to make an offer on a property. This document will include the buyer’s intention to purchase, the price offered for the property as well as further information on the seller, including his or her ID number among other things. The offer to purchase is a legally-binding document once all parties have signed and initialled.
2. Term: CMA - Comparative Market Analysis
A Comparative Market Analysis is performed by a real estate agent, where he or she conducts a study and produces a report based on the selling price of similarly-priced homes within the seller’s area. This report then assists the agent in aiding the seller with choosing a realistic price at which to list their property. The report is not purely factual, and it takes into consideration the expertise of the real estate professional.
3. Term: Transfer fees/duties
Fees that are payable in order for the property to be transferred from the seller to the name of the new owner. Transfer fees often also include conveyancing fees and registration fees payable to attorneys and conveyancers involved.
4. Term: CGT - Capital Gains Tax
The calculation of this tax is based upon the income (from all sources) that is received during the financial year.
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.
*Article updated 02 September 2024
Want all the latest property news and curated hot property listings sent directly to your inbox? Register for Property24’s Hot Properties, Lifestyle and Weekly Property Trends newsletters or follow us on Twitter, Instagram or Facebook.
Print
