Property still remains your best investment, and the benefits of owning a home are well worth the effort. Although this might seem like a lengthy and complicated process, your real estate agent is there to assist you with each step. Find an experienced agent who can help guide you through the process.
First – one should know what you want. “Do your homework first” said Craig Hutchison, CEO of Engel & Völkers Southern Africa. Numerous estate agencies have open houses in various areas every weekend, and some even during the week. This will help you to judge the size that suits your needs and will help give good insight into your choice of area. Think about accessibility to work, public transport, schooling and other amenities. “Remember location is of great importance, especially to secure your investment for the future, and in fact will also have an effect on your loan approval” Craig continued.
Another big must is to sit down, and draw up a list of what is most important to you in a property. It’s OK to be picky, but don’t be unrealistic with your expectations. Small renovations can usually address any concerns that you may have with a property. Use your list of priorities as a guide to evaluate each property. Think long term. Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in this home for a longer period? This decision may dictate what type of home you’ll buy as well as the type of mortgage terms that will best suit you. Accept that no house is ever perfect. If it’s in the right location, the yard may be a bit smaller than you had hoped. The kitchen may be perfect, but the roof needs repairing. Make a list of your top priorities and focus in on things that are most important to you. Let the minor ones go. Remember your home doesn’t exist in a vacuum. Don’t get so caught up in the physical aspects of the house itself — room size, kitchen, etc. — that you forget about important issues as noise level, location to amenities, and other aspects that also have a big impact on your quality of life.
Once you have done your homework and decided on what you want, there are some questions you need to ask your agent that may help give some good insight into your various choices available. “When working with a reputable real estate agency, your agent will be trained and qualified to provide you with all the information and answers you need beforehand, to be able to make that very important decision- to buy or not to buy”. Agents are legally bound to tell the truth, so it pays to ask a handful of questions to find out what the real situation is, which will make you feel more confident that you’re making the right choice on the right house.
1. Who are you dealing with?
Find a real estate agent who you connect with. Home buying is not only a big financial commitment, but also an emotional one. It’s critical that the agent you chose is both highly skilled and a good fit with your personality. Enquire about their qualifications – designations such as a valid fidelity fund certificate with the EAAB. Qualified agents have gone through numerous years of training and are in a better position to advise you on all aspects of the sale, as well as to ensure you have the best possible negotiator and expertise in your corner.
2. What financial obligation am I looking at?
Review your credit report and be sure you have enough money to cover your down payment and closing costs. Then, talk to a lender or mortgage originator and get prequalified for a mortgage. This will save you the heartache later of falling in love with a house you can’t afford; it will also be an indication to the seller that you are a serious buyer. Generally, you can afford a home equal in value to between two and three times your gross income. Ask your agent to help you with bond calculations and the monthly instalments as well as advise you on the deposit you will need. Ideally, you should have 20% of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs, ask the agent for the closing costs including taxes, attorney’s fee, and transfer fees. Lastly remember to ask what the average monthly utility bills are. Inquire about electricity, water, waste removal, levies and any other utility costs that are applicable.
3. Why is the owner selling & how long has the property been on the market?
Although the agent is not obliged to answer this question in detail, you will be given a hint to the circumstances of the owners. Perhaps the owner is selling due to personal circumstances, or it could be that there is something wrong with the property itself. If someone has passed away in the property, an agent is legally bound to disclose these types of reasons. By asking how long the house has been on the market you will also be able to gain some insight into whether there are any big problems that other people have realised that you haven’t or whether it is overpriced.
4. How did the agent decide on an asking price? / How much is the home worth?
A professional agent will provide you with their justifications for the asking price. They should arm you with plenty of comparable stats and facts — prices of similar nearby homes that have been sold recently, how long homes are staying on the market as well as the current market situation. You should have a good idea what properties in the area sell for. Your agent will assist you with this information and advise you correctly to ensure you make the right choice.
5. What offers have they had so far?
The agent will tell you if there have been other offers, but not the amounts of the offers. The agent is obligated and incentivised to get the best possible price for the seller.
6. Exactly what is included in the sale?
Make sure you know exactly what fixtures and fittings are included in the sale of the home. There might be some items which really grabbed your attention, such as a home theatre setup, but only once you move in do you notice that the actual equipment have been removed, which could make you regret your purchase as it the chances are that it was one of the big emotional connections you had with the property. On the other hand, it could also help you to make your decision. If you were weighing up two properties, however the one includes all the custom blinds and curtains, it could possibly make it a bit more appealing than the other which is a blank canvass.
7. What can they tell you about the local neighbourhood?
Ask about the location of the home. Homes in desirable areas are worth more than homes in locations not so desirable. What’s the school district like? – This is especially important if you have children, but it also can affect resale value. Where are the nearest shops? Are there nuisance factors? Traffic from nearby roads or stores may be an irritant. Think about accessibility to work and is it economically stable? – Check with your local property sales advisor to see if household income and property values in the neighbourhood are stable or rising. Is it a good investment? – Ask a local sales advisor about price appreciation in the neighbourhood. While it is a good idea to see what the agent has to say, make sure you do some independent research as well. Remember location is of great importance, especially to secure your investment for the future.
8. Is there a problem with this house or the house condition you should know about?
The big fear if you are buying is that you are missing out some big negative factor that others know about. A nearby sewerage plant opening up, a new highway being planned on your boundary fence or previous water damage that could cause foundation problems. Ask if there are any drainage issues on the property that could later cause damp issues as well as problems with sink holes. If you have any doubts about a house, ask surrounding neighbours what they think. If you know in advance that the home has structural issues or deferred maintenance, you might want to take those problems into consideration before deciding on the offer price. Some agents recommend a home inspection before putting the home on the market, if one has been done, ask to see it. The general condition of the house is also an important pricing factor. Information concerning things that need to be done in or around the home must be taken into consideration when making an offer.
9. Have any major works been conducted / has the sellers made any major renovations or additions?
If so, are you able to have a look at the relevant plans of these renovations or additions? It would be awful if you bought your dream home only to find out you would have to knock half of it down. In general, this will give you a ballpark notion of how much money they’ve invested into the home and what they hope to get out.
10. Influencing factors
You have the right to ask the agent about the crime in the area, what type of incidents have taken place and whether there are security providers in the area, and if the property is in a boomed off area ask whether there are any monthly contributions that need to be made for the security.
Find out whether there are any problems with the neighbours – inquire about issues such as past /on-going disputes and the neighbourhood. If you are really unsure, ask if you could meet the neighbours, this will give you an indication if you will be compatible and they might disclose other facts of the neighbourhood that you would like to know. Ask them how long have they lived in the neighbourhood and what do they like best and least about living there? Do all the neighbours get along with each other? Have they ever noticed anything odd about their house or yours? How quiet is the neighbourhood?
One often forgotten, however critically important item is pets. If you are moving into an estate or a complex remember to ask the agent for the rules regarding pets. What types of pets and how many are allowed? Do they need to be chipped and do you need to verify them with the body corporate? You can also speak casually to potential neighbours to see if they are pet-friendly.
Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big financial commitment. But it also yields big benefits. Don’t lose sight of why you wanted to buy a home and what made you fall in love with the property you purchased. Choose a home first because you love it; then think about appreciation. After all, a home’s most important role is to serve as a comfortable, safe place to live.