The decision a property buyer makes today, could affect their financial wellbeing and lifestyle for the rest of their lives.
In light of this, it is important that buyers don’t feel pressured into making a decision but rather take the time to do the necessary homework to assist them in making the most informed decision they can, says Adrian Goslett, CEO of RE/MAX of Southern Africa.
He notes that due to the fact that purchasing a home is a major investment, the decision making process should be given adequate time and effort before reaching its final conclusion. “Buying a home is usually a very happy and exciting experience, but it is important that buyers don’t make their decision based purely on feelings alone. Although a buyer must want to live in the home they purchase, they should consider other aspects that could affect them in the future,” says Goslett.
Finance and affordability
The first step any prospective home buyer should take into account is finding out if they qualify for finance and what they can afford. Goslett says that a bond originator such as Betterbond, will be able to help the buyer determine what home loan amount they can afford and qualify for before they start looking for a property. While this is not a guarantee, it will guide the buyer in terms of what price range they can look at in the market. Obtaining a prequalification is also a clear indication to estate agents and sellers that the buyer is serious. “A further benefit of a prequalification is that the buyer will then have an idea of what deposit they will need to qualify for in order to obtain the required finance. Very few buyers are able to obtain 100% home loans in the current market,” says Goslett.
Aside from the bond qualification and the deposit, a buyer will need to determine whether or not they can afford all the other expenses involved in purchasing property such as; transfer duties, moving costs, home insurance, rates and taxes, and the attorney’s fees.
Gather information
According to Goslett, the more information about a particular area or home a buyer can obtain the better. We have all heard it said that knowledge is power and a buyer that has knowledge about the market, demand and home pricing in an area, will be able to negotiate the best possible price for the home that they want. Goslett says that knowing how long a house has been on the market, for example, will help determine how open a seller may be to negotiation.
“A professional agent specialising in the area will be invaluable in providing a buyer with comparative market information such as the listing prices and actual selling prices of homes in that area,” says Goslett. “They will also be able to provide statistics on the capital improvement or decline of the area over the last five years. This will provide a clear indication as to whether the buyer can expect a good return on their investment over the long term.”
Check out the neighbourhood
Goslett says that once a buyer has decided on the area they would like to buy in, there are a few aspects that they should research before signing on the dotted line. “Location is of the utmost importance when buying a property. The neighbourhood that the home is situated in will largely determine the property’s potential for appreciation in value. Buyers should look at the kind of amenities in the area and how well they are maintained, the quality of schools, the level of crime and traffic experienced, as well as whether there have been any recent or planned zoning changes in the area. In addition, potential buyers should take note of the level of maintenance of the roads infrastructure and pavements as well,” Goslett advises.
He notes that the local residents’ association, municipality and police station will offer a wealth of information for interested home buyers. Current homeowners in the area are also an excellent source of information. Goslett says that another reason to speak to the existing owners is that they may potential be your new neighbours and it is a good way to determine whether or not you might get on with these individuals. Most homeowners will only get to meet their neighbours once they have already bought their home.
Make sure the property is structurally sound
Goslett says that it is advisable to have the property professionally inspected before buying it. A reputable home inspector will be able to provide the buyer with a full report on all defects and work that needs to be done to the home. While some problems may be a relatively easy fix, homes with severe structurally damage can cost a lot of money to repair and may not be worth buying. He notes that buyers should walk through and check that all the fixtures work, such as the stove, all the lights, the pool pump, the electric gates and the alarm system.
“While many buyers may feel that painstakingly researching the area and property they intend to buy may seem unnecessary, buyer’s remorse on a purchase as large as a home is not a pleasant experience. The only way that buyers can avoid this and make the best possible decision is by doing their homework, thoroughly,” Goslett concludes.