Adrian Goslett, CEO of RE/MAX of Southern Africa says that not only is buying a property a large investment, but the often complex process can be an intimidating experience for many homebuyers.
For this reason, he notes that systematically working through the process, asking the right questions and seeking professional advice can assist homebuyers to navigate the process and alleviate some of the emotional stress.
Goslett says that at the start of the property purchasing process, buyers should sit down and answer four key questions before they continue looking for the perfect home. The answer to each question, he says, will form a vital part of making an informed and educated decision.
The four key questions, according to Goslett, are:
1. Where do I want to live?
While location will definitely have an impact on the return on investment and the appreciation in the property’s value, this question is also about where the buyer actually wants to spend their days. Buyers will be able to get information about an area from online property sites, which is also a good resource for finding out about the general property pricing in the area along with the range of amenities on offer.
“Property search portals will help buyers to narrow down a location and type of home. Depending on the buyer’s future plans or current situation, certain elements will be more important than others such as schools, the commute to work, entertainment amenities available or proximity to medical facilities. Eliminating certain neighbourhoods because they do not meet requirements will help to streamline the process and reduce frustration,” says Goslett. “Once the search has been narrowed down, the buyer should then take a drive out to the areas they have chosen to get a feel for the neighbourhood and the people that live there.”
2. How much savings do I need?
In today’s market it is no secret that on average 60% of buyers will require a deposit when applying for finance in order to successfully secure the bond with a lender. Knowing how much of a deposit will be needed all depends on the target purchase price that a buyer has set for themselves and what they can afford. On average, the current required deposit for repeat buyers is around 20%, while first-time buyers are generally asked for about 12% of the purchase price.
“There are also additional costs associated with a property purchase that a buyer must be aware of and will need to set aside money for. These include transfer costs, moving costs, home repairs, renovations and planned upgrades among others,” says Goslett.
3. What do you want to spend monthly?
Often homebuyers find themselves in financial distress because they did not take the additional monthly expenses of owning a home into account. Goslett says that buyers need to keep in mind that qualifying for a bond doesn’t necessarily mean that the buyer can afford the home. He notes that a reputable mortgage originator will be able to provide the buyer with the total cost of the bond, which would include the repayment, interest and homeowner’s insurance, however there are other expenses to be considered. Some of these expenses include:
Electricity and water
Rates and taxes
Levies (sectional title unit)
Homeowners Association fee
Home maintenance
Landscaping
4. How do I choose an estate agent?
Once all others questions have been answered and it is time to go out and look at properties, choosing a real estate agent will probably be one of the buyer’s first decisions. “It makes sense to work with an agent who specialises in the particular area that the buyer is interested in,” says Goslett. “They will have a working knowledge of the area and prices as well as a network of sellers they are working with. It is important that the buyer chooses an agent that has the qualities they are looking for, such as honesty, integrity and experience. However, most importantly the buyer needs to feel comfortable with the agent.”
A reputable estate agent can provide much needed guidance through the home buying experience, provided there is an open line of communication between the buyer and their agent. “Buyers who have a good relationship with their agent and trust their agent’s expertise and knowledge usually have a much smoother property buying process,” Goslett concludes.