Buying your own home for the first time can be an exhilarating and daunting experience. Before you make an offer to purchase, make sure you’ve done your homework.
1. WHAT CAN I AFFORD?
The first question to ask is how much money the bank is willing to lend you to finance your home. If the loan they’re offering is R1 million, you’ll know exactly what kind of properties you should be looking for and can tailor your search. Many estate agents and banks have online tools that help you calculate what your monthly bond repayment would be. Know that there are other costs involved too. ‘Affordability is a key consideration,’ says Bill Rawson, chairman of Rawson Property Group. ‘You need to know how much you can spare from your monthly budget for additional expenses such as rates, insurance, repairs and maintenance, especially if interest rates are rising.’
2. WHAT’S ON THE MARKET?
Once you know what you can afford, familiarise yourself with the properties that are available in the areas you find suitable for your needs. ‘It’s a good idea to put together a check list of “must-have”, “nice-to-have” and “don’t-want” features so that you can compare properties on the market,’ says Bill. Take your time and look around. This will help you recognise when a house offers value for money – or is overpriced. If house prices aren’t rising much, it means it will take longer for you to recuperate the full price of your house, including transfer fees and bond costs.
3. WHAT ARE MY PERSONAL CIRCUMSTANCES?
The stage of life you’re in will similarly affect your choice in home. Are you retiring and scaling down or starting a family and scaling up? Is your job secure and have you set aside enough savings in case you get retrenched? ‘You need to ask yourself all of these questions, including how long you intend to stay in the house,’ advises
FNB’s Albertus. So, you’ve found the home of your dreams, and are in a financial position to make an offer to purchase. ‘An offer to purchase is a binding agreement,’ warns Bill, ‘so make absolutely sure you understand the terms and that you [actually] want the house before you sign anything.’
4. HOW DO I SEAL THE DEAL?
If your offer to purchase is accepted, it’s time to secure your home loan. You can either do this yourself or by asking a bond originator to help you. ‘A bond originator will approach all the financial institutions for you and present the best options to you to get your financing approved quickly,’ says Bill. Bear in mind that after your bond is approved and registered, it can take up to three months for the transfer to go through. In the meantime, crack open a fine bottle of bubbly, begin planning your move and pat yourself on the back – you’re about to become a homeowner!
[Image by Andrea Piacquadio via Pexels]