If you’re just starting on the road to homeownership, excitement and eagerness to possess your own property for the first time may cloud your judgement and cause you to make some mistakes.
Online bond aggregator MortgageMe offers some tips for people buying their first property. The online platform, launched in 2019, is designed to initiate a super-fast digitised application process that automates tailored submissions to the country's major banks and lenders on behalf of prospective buyers.
Renovations
A good deal trumps bad décor. Just because the house isn’t to your taste doesn’t mean it is not an option to buy - if the price is right. With a great bargain, you could have enough funds to renovate the home to meet your needs cost-effectively.
On the other hand, it’s essential not to underestimate the cost of renovating as well as the time it will take. If major renovations are needed, be sure to factor in the requirement of more money and a longer timeframe than you initially considered. Even then, you still run the risk of exceeding one or both of these.
Consider living in the home for a while before you renovate. Once you get to know the property, you will have a better idea of precisely what needs to be changed and what you can happily live with.
If you have definite plans to renovate, track down your house plans as soon as possible, as this can be a time-consuming administrative task. When you get them, check that the house as-built matches the current plans.
If there is an option of moving elsewhere temporarily while you renovate, don’t hesitate. If you’re going to be breaking down walls or making changes that affect plumbing, you’ll be grateful you made this decision.
Not all renovations increase property value immediately, so don’t assume you will be adding to the resale value.
Finances
The most important piece of financial advice is to stay within your price range.
It may be difficult to resist the urge to buy that ideal home that costs just a little more than you can comfortably afford. The problem is that so many unexpected expenses come with owning a property, especially in the first one to two years. Financial stress is to be avoided at all cost.
Even if you don’t enjoy haggling, this is one time when you should be prepared to bargain. The interest rate offered by your bank and many of the fees charged by bond attorneys, such as registration and transfer fees, are often negotiable. A home loan at just half a per cent less can put thousands of rands in your pocket over the 20 to 30-year lifespan of the mortgage.
An access bond will provide a safety net for emergencies or later renovations, so make sure you sign up for this in your home loan agreement with your chosen bank.
Compliance
An electrical compliance certificate issued by an accredited electrician is a legal requirement for the transfer of ownership of a property. For the new owners, it is also a guarantee that the electrical installation in your home is safe. Therefore, you need to ensure your CoC is a legitimate electrical compliance certificate issued by an accredited electrician, particularly if you’re buying an older property.
Fixed asset
Location is considered to be the most important criterion when deciding which property to buy. The ideal is to buy the cheapest house in the most expensive suburb you can afford. This limits the possibility of over-capitalising on your property when it comes to resale.
Be extra observant when viewing a property you are interested in.
- Remember to look up to make sure there are no leaks or structural issues in the roof.
- Inspect the walls for signs of fresh paintwork, and don’t be embarrassed to ask if it may be covering up damp or hiding water leaks.
The recently promulgated Property Practitioners Act makes it obligatory for sellers to disclose known defects when selling their properties. However, it isn’t always possible to prove that they knew about undisclosed defects once you have moved in, so you need to check carefully before you sign an offer to purchase.
Writer : Sarah-Jane Meyer