Top tips for first-time buyers
Pieter Janse van Rensburg
Managing Director at Times Squared Marketing (Pty) Ltd trading as multiple Just Property Western Cape branches and Managing Director at The Gavelry. Owner of Safari Outpost & SA Meat Shops.
So you’ve finally made the decision. You’ve dreamt about it for years and now you have decided to take that step. You are ready to buy your first property, and it's super exciting, as it should be! Whether you’re buying a property as an investment or for you to live in, it is a great achievement.
But home-buying mistakes are often very costly mistakes and even though the process may seem daunting and at times too complex to even contemplate, if you do your homework, and aren’t afraid to ask the right questions, then the process becomes less complicated and you can minimize potential risk. So, before you rush out and make a decision that will haunt you later, just pause and have a look at some of the tips our top-performing sales agents, Irene Ansley & Barbara Ingerisch, have shared for first-time home buyers:
Tip 1: Get your credit score in order if you plan on applying for a bond.
Your credit score is one of the factors that banks look at when you apply for a home loan. Your chances of being granted a bond are subject to the state of your credit score. Your score is determined by factors like current debts, credit card limits, amount of credit applications, repayment history, etc. In short, it’s your history with credit. Make sure you pay bills on time and clear any large or lingering debts. If lenders can see that you know how to handle credit, they are more likely to give you more.
Tip 2: Get prequalified. Get in touch with a bond originator to see what amount you qualify?for.
Prequalification is a projection of the estimated home loan amount you’re most likely to qualify for. This is determined by your income, credit score, monthly expenditure, etc. Once you have an idea of what you qualify for, you can start with house hunting. It’s important to note that prequalification is not a guarantee of a home loan amount, but merely an indicator generated to give you more insight into what you could potentially qualify for. For more information on a free prequalification, please contact our bond experts at https://bondsbythegavelry.com/.
Tip 3: Find an agent and do your homework.
A good real estate agent is invaluable for first-time buyers. The amount of stress and anxiety that can be avoided by working with someone who’s done it all before, is priceless. Work with your agent to determine the market value of a property you're interested in, the future returns of the property, the most recent sales in the area, and any other information relevant to the purchase.
Tip 4: Make sure you understand all the extra costs.
Most first-time buyers aren’t aware of the fact that there are many extra costs involved over and above the price of the property and more often than not if you’re not prepared, these come as quite a nasty surprise. These include transfer costs, bond origination costs, transfer duty (if applicable), moving costs, deeds registration fees, etc. Have a deposit ready if applicable for new utility accounts such as water/sewerage/refuse etc. Sometimes Eskom-based electricity gets cut off by the outgoing?tenant or owner. Again, talk to your agent and make sure are aware and have budgeted for all extra costs.
Tip 5: Make sure that your insurance is in place before taking occupation.
The moment you move in, you become liable. Don’t be caught with your pants down while you’re still celebrating your new property. Get good solid comprehensive home insurance before you step through your new front door.
Tip 6: Research. Research. Research.
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Have a look at a building's financials, conduct rules, and most recent general annual minutes to get an understanding of how a building is being run. If a potential special levy is going to be raised, you need to be well informed. If there are a number of properties being sold in a building within a short period, find out why that is. If you are buying a property with a tenant in place, ensure that the tenant is a good quality tenant, pays on time, and looks after the property. Ensure that you are familiar with the lease terms and find out whether there are any monthly agency fees applicable. If there is a property that is very well-priced and looks like it will sell quickly, ask for the offer to purchase even before viewing so that you are ready to submit it right after seeing it in person.
Tip 7: Don’t be hasty, or worse, ignore inspections.
Don’t be fooled by a property that looks great on the surface. Dig deeper. Can you spot any structural faults like deep cracks or other serious issues like damp? If the property is priced correctly and you are in a competitive market, try to look past small maintenance issues like missing lightbulbs and loose door handles. These are issues that can easily be rectified without costing you an arm and a leg and you could miss out on a good deal over something as trivial as a broken toilet roll holder. Remember that the necessary compliance inspections will be carried out but if there are any specific maintenance issues you’d like for the seller to see to, this needs to be communicated when making the offer.
That’s it. Of course, this list doesn’t cover everything, but it does give you a great start, and again, the best way to go is to find an agent you trust and are comfortable with to help guide you through the process.
Our Just Property agents at our various Just Property branches are eager to assist first-time home buyers and can be contacted by clicking on the respective links: