The ushering in of the new year brings with it the prospect of buying property in 2019. First-time homeowners who are trying to get a foot onto the property market may not understand or be clued up on how to adequately pursue the undertaking.
“We take a look at some of the steps to take when deciding to buy a house,” says CEO of Greeff Christie’s International Real Estate, Mike Greeff. “The process of buying a property need not be overly complicated, and by following guidelines such as these and securing the trusted expertise of a qualified real estate professional, the process is already significantly made easier.”
Greeff offers these four steps to follow:
1. Assess your finances
While this step may be a difficult one, it is necessary, and buying a property is not possible without doing so. This includes taking a look at your income and expenses, as well as disposable income. This also includes considering your deposit and what saving for a deposit on a monthly basis would mean for your finances.
Deposit amounts on home loans usually start from the minimum of 10% of the purchase value of the property and have a two-fold benefit: reducing your monthly bond repayment amount as well as increasing your affordability score with banks. The more substantial your deposit, the better your chances of being granted a home loan. Having a healthy deposit shows lenders that you have the discipline to save and that you are committed to the buying process.
Just like having saved for a deposit, having a good credit score will exponentially increase your chances of obtaining a home loan. Ensuring you pay all your bills on time and even repaying your home loan earlier makes a good impression on financial institutions thus having a positive effect on your credit rating. If possible, obtain a credit report prior to application in order to gain an understanding of what your financial position is and draw up a list of your monthly expenses to determine exactly how much you can afford to spend.
Clear as much debt as possible. Paying off debt from items purchased on store credit accounts or microloans will have a positive effect on your credit score.
Assessing your finances also means realistically thinking about what you are able to afford as a monthly repayment, and once you are ready to start looking at properties you should always bear that amount in mind.
Getting a home loan prequalification will help you determine how much you can afford, so doing this before you start looking for a home is a good idea. A prequalification certificate is valid for 90 days and indicates how much you qualify to spend on a house. Being certified can make or break the seller's decision to accept your offer or not, making it even more valuable.
2. Approach a real estate professional
One of the most crucial steps throughout the property buying process involves consulting a real estate professional to be your guide. An estate agent’s skills and knowledge will be crucial in helping you find the property suited to you, so selecting an agent from a reputable agency is vital.
Once you have an idea of an area or two you may be interested in, an estate agent will be the point of contact between you and the seller of a property you may be interested in.
3. Start looking at properties
Here comes the exciting part. The search for property opens up a world of opportunities for a prospective buyer. During your search you will consider the features you require in your property, including the number of bedrooms, bathrooms, kitchen, garage, etc. You will also consider properties which fall within your price point and in an area of your choice.
When looking at areas to purchase in, there are a number of variables to consider. If you are a young working professional, you may be looking at areas within the nodes of the city’s business district and outlying areas. For those with a family, you would be considering a more suburban lifestyle in close proximity to school catchment areas. These areas would also be close to various amenities and major access routes for transport. Safety and security would be generally considered, as well as taking a thorough look at the market trends in the area to establish what properties sell for at different times of the year.
Looking at properties means you get to narrow down a list of properties that that are suited to you and which fit the criteria and price bracket of your choice. Finding your perfect property will undoubtedly be an unforgettable experience and should be approached with the knowledge and experience of a qualified agent.
4. Settle on a property and put in an offer
Once you have settled on a property, through the help of your agent, you will be able to submit an offer to purchase (OTP) to the seller, stating your intention to purchase their property.
As a buyer, consider the following when making an offer to purchase:
- Be sure you are completely clear on all that is stipulated within your offer to purchase. As a legally binding document, the OTP will outline all of the terms and conditions involved with the property and the conditions of purchase. If there is anything you are unclear on, flag the issue, and speak to your experienced real estate agent who will be able to make things clear for you.
- Be fully aware of the fulfilment of the suspensive conditions. If these conditions have not been fulfilled, the contract remains null and void. Consult with a conveyancer and estate agent if you are not entirely clear on what exactly the criteria to fulfil the conditions are, your conveyancer and agent will be able to explain.
- If you have purchased your property by taking out a home loan, be aware of the date of transfer and the registration and consider the stipulated timeframe involved. If you take up residence of your property before it has been transferred to your name, be aware that you may be liable for occupational rent during this time. If anything further presents itself to you as unclear, speak to your agent before completing the offer to purchase.
Once all the paperwork has been successfully completed, the transaction may take some time to be finalised before you are able to move in.
Greeff says adhering to these four guidelines is one way to ensure an easy purchase process and focus on the more important things - enjoying your new home.
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