Buying a home is usually the largest purchase a person will make in their lifetime, and along with that can come a lot of stress, especially if you are a first-time buyer.
“Because you are buying a family home as well as making an investment, there are a multitude of factors to consider,” says Grahame Diedericks, Managing Principal for Lew Geffen Sotheby’s International Realty in Midrand.
“There can also be a number of unknown factors that can arise along the way and potential pitfalls to navigate - and mistakes can be very costly - so you need to take the time to do your homework and have all your ducks in a row before you start the process.”
In order to make a successful purchase; one that is both a happy family home as well as a good investment, Diedericks offers the following tips:
1. Check out the neighbourhood
Remember that you are not only buying bricks and mortar and that the location of your potential new home can count for more than you might initially imagine. First, there are the financial implications to take into consideration: How easy will it be to resell your home in the future? How has the local market fared in recent years?
Then, there are the lifestyle aspects of location to consider: How long does it take you to get to work? Is it a noisy or quiet neighbourhood? If you have school-going children, is it near good schools? Take the time to really weigh up your priorities and needs and explore the neighbourhood to make sure it’s a good fit.
2. Your choice of real estate agent matters
Your choice of agent can have a big impact on your purchase so it’s important to select one who has a thorough knowledge of the area and the local market and one who understands your personal needs.
If your agent is more concerned with getting their commission than with helping you find a home that actually meets all of your needs, it’s much more possible to make an investment you later regret. Not every real estate agent is the same, and you need someone who can be attuned to your unique situation.
Take the time to ask them questions and interview a few agents before making your choice.
3. Zoning regulations can Impact your renovation plans
Different areas have different zoning rules and there can also be also heritage factors to take into account so before you buy a fixer-upper for which you have great plans, make sure that the local regulations don’t conflict with the renovations that you have in mind.
4. Be prepared to make compromises
No home is perfect, and even if you have a big budget, most homes will probably not have every single characteristic on your wish list and you’ll have to weigh your priorities to make the final decision. Taking the time to actually make a list of the qualities you’re looking for and identify those that you’re not willing to sacrifice will help to guide your search.
5. Stay steady with your money before buying
It’s not wise to make any large purchases or move your money around for at least three months before buying a new home as it could compromise your credit profile. Lenders need to see stability and that you’re reliable and they will expect a complete paper trail which will also help in getting you the best loan possible. If you obtain new credit, amass too much debt or buy big-ticket items, you’re going to have a harder time getting a loan.
6. Check your affordability and get your ducks in a row with pre-approval
Pre-qualification not only affords prospective homebuyers the peace of mind that their credit record is in good standing and that they are considered a viable credit risk, it also arms the them with the knowledge of how much they can afford to spend and the type of bond deal they can expect from a bank.
Obtaining pre-approval also gets the application process started, which means that the transaction can be more swiftly concluded once buyers have found the home they want.
7. Don’t try to time the market
Don’t obsess with trying to time the market and figure out when is the best time to buy because the real estate market is cyclical and trying to anticipate the housing market is near-on impossible. The best time to buy is when you find your dream home and are in a position to buy it. If you try to wait for the perfect time, you’re probably going to miss out.
8. Don’t forget to budget for sleeper costs
The difference between renting and homeownership is the additional ongoing costs. Often buyers make the mistake of focusing on their mortgage payments when they budget, but they also need to be aware of the other expenses such as rates and taxes, utilities, insurance and homeowner-association dues.
New homeowners also need to be prepared to pay for repairs, maintenance and emergencies and it’s a good idea to set up a separate savings fund to cover these costs.
9. Give the house a physical
You wouldn’t buy a second-hand car without inspecting the engine so, unless you are buying new off-plan, it makes sense to commission a condition report before signing on the dotted line.
This will help you make an informed decision as to whether or not to buy or if you love the house, what you should offer to pay. It also gives you some idea of the scope of maintenance and repairs.
10. Beware the voetstoots clause
All too often, buyers discover unpleasant ‘surprises’ about their new homes within months or even weeks of moving in and, even in cases where they do have recourse, it’s a stressful situation best avoided.
There are two types of defects:
- A latent defect is a fault that would not readily be revealed by a reasonable inspection of the property being sold.
- A patent defect is a flaw that is not hidden and ought to be easily identified upon reasonable inspection.
It is a purchaser’s duty to acquaint himself with the general condition of the property when purchasing it, as the purchaser cannot later claim that he did not see patent defects.
“Buying a home to call your very own should be a dream come true, not a nightmare that you regret for years to come,” concludes Diedericks.
“So even if you’ve already been through the homebuying process, there’s always something new to learn and there are always unexpected pitfalls to navigate so every transaction should be treated as if it’s the first.”
Writer: Tracy Bartlett