As exciting a milestone as it is, being a first time home buyer can also be scary when you don’t know what you’re doing. Here are some things you should bear in mind as a potential first time home buyer.
1. Renting property
- There’s more allowance for change with renting. Should you get that job in another city, you have the option of cancelling the contract and moving out.
- Renting allows you to stay in an area where you might not be able to afford to buy a house.
- Property insurance and maintenance issues are not your responsibility, so that’s a big stress off your shoulders.
2. Buying a home
- There are the long-term benefits of possible growth in personal wealth and value in assets.
- Your property’s worth will increase and, should you one day sell, you may earn profits.
- It becomes your legal property, which gives you more liberty with making changes (renovations, painting, extensions, etc.).
- You can buy to rent; that way, the property can pay itself off.
3. Find a good agent
It’s important to have someone who knows the ins and outs of the property market to guide you through the process. Ideally your agent should be qualified and rich in experience and knowledge. Don’t be afraid to ask the agent about their experience and background in the industry, if it’ll make you more comfortable. It’s always the safer and easier route to connect with an agent who belongs to a trusted establishment. There is also the option of viewing listings on online platforms such as Property24.
4. Choose your ideal neighbourhood
Before looking at your dream house, consider whether the neighbourhood will be suitable for present and future plans. Maybe you’re currently single and the idea of living in the rowdy and busy city is perfect for you. But what will your life look like a few years from now? Planning on getting married or having kids? Will your space accommodate you and your potential future family? Consider all these possibilities before making a decision.
5. Get pre-approved
Very few things are as frustrating as an unapproved bond. Especially when your offer has been accepted. With a pre-qualification certificate, that won’t be something you have to worry about. A pre-qualification certificate is a free document that gives you an indication of what kind of bond you qualify for. This means having a clearer picture of what you can afford in the market, which means less disappointment.
6. Making a good offer (negotiating)
Your offer sets you apart from other potential buyers. The aim is to always negotiate an offer as close to the original price as possible, i.e. a ‘reasonable’ offer. In the process of negotiating and taking advantage of a possible bargain, it is important to not offend the seller by bidding too low. It may come back to bite you, especially if you are set on the property. It also helps to try and find out why the seller is selling. This type of knowledge provides a guideline on where to tread.
7. Understand all the costs involved
As a first time home buyer, it can be easy to overlook the additional costs involved in buying a property. These piled-up costs and fees can demotivate you, which is why it’s so important to know what it is you’ll need to pay for, and to save for it before entering into any legally binding agreements. If you have no savings, the pre-qualification certificate works in your favour. You have a clear picture of the funds you have, so you can include these fees in your overall expenses. The costs you need to be aware of are:
- Transfer costs. These are so that the property can be transferred into your name.
- Bond cost. This is a loan repayment made to the bank on a monthly basis for an agreed period of time. This cost is made up of a number of fees such as the loan initiation fee and the conveyancing fee.
Now that you’re clued up on what to prepare for, finding and securing that property you’ve been eyeing should be less intimidating. So, what are you waiting on? Happy hunting!