When buying a home
What you need to know
THERE is more to buying a house than just the exchange of money.
Buying a home for the first time can be a learning experience. There are terms to understand, strategies to grasp, and sometimes even skills to learn.
Many individuals save for years if not decades to be able to purchase a home. In that time, they would have figured out the design of the house, the number of rooms and even the location. For others, this may not always be the case and it becomes imperative that consumers understand the different aspects in buying a house before placing a deposit or a down payment.
Many consumers may be listing their new year’s resolution as finally purchasing their first home. When consumers do decide to purchase a home, most likely they will have to deal with a real estate agent. It is also becoming common for consumers to even utilise the services offered by real estate agents to look for an appropriate home. For this reason, consumers must choose the right agent and ask the right questions when dealing with agents.
Consumer tips when engaging a real estate agent
1. Engage agents with a proven track record – this can be done by reading reviews of the respective agents and speaking to at least three agents prior to making a decision. You can also liaise with the Real Estate Agents Licensing Board for verifications of licensed agents.
2. Meet face-to-face. This is an important step because you will then be a person looking for a property rather than a faceless name who communicates by email.
3. Have a thorough read of the terms and conditions of any agreements made with the real estate concerned.
4. Engage with agents who disclose all the relevant details of the house, including any stigma associated with the property. In 2019, the Real Estate Agents Licensing Board highlighted concerns by people that full information about properties are not being disclosed. The council also received complaints regarding the same. The six types of stigmas associated with real estate are criminal stigma, debt stigma, minimal stigma, murder or suicide stigma, phenomena stigma and public stigma.
5. Get your finance pre-approved and research the local area and individual properties in advance so you can make a firm swift offer if necessary.
6. Once you zero-in on a property, engage a law firm listed in your banks panel of authorised law firms to represent your interest. The agent will also refer you to the seller’s legal representative. While you are doing this, get a sale note from the agent and present to your bank. This is kickstart the mortgage process by your bank.
7. From here onwards, both parties’ legal representatives will do most of the communication with zero to minimal involvement of the real estate agent.
The home buying checklist
On the same note, when shortlisting houses you are interested in purchasing, you must know what are some of the things to consider. The following are some of the top criteria/tips to consider:
■ Take stock of your personal finances – one of the first steps to consider before purchasing a home is to gauge your personal finances and whether you can afford the home you intend to purchase. It is always a good idea to review credit history. The better your credit history, the more likely you are to receive a good interest rate on your mortgage loan. Lenders will use your credit reports and scores as important factors in determining whether you qualify for a loan. If you have a bad credit history, you may have trouble qualifying for a loan.
■ Research the local market scope the market and determine the conditions of the area where you will be buying. Always check if there are big shifts in the asking price for homes that are in your price range.
■ List your priorities - once you are very sure that you can afford a home; you can search with listings within the areas you wish to purchase. Always list down your priorities such as what you want in a home and its locality.
■ Inspect homes – before making an offer it is always important to inspect the homes. This helps you determine whether the asking price is worth it or whether you will be required to fork out more money for repair works.
■ Check the roof condition – roof replacements cost a significant amount of money and it’s important to verify whether this is in good condition before buying.
■ Signs of foundational damage – if a foundation of a home is damaged it will cost thousands in repairs. Look for signs like cracking near the foundation inside and outside the home.
■ Potential for flooding – the closer the home is to water bodies, the more likely you are to experience problems with flooding. It is therefore important to consider the proximity of homes to a body of water.
■ Mold, weathering and water damage – check cabinets for signs of mold growth around pipes. This may indicate a leaky plumbing system, previous flooding or improper ventilation.
■ Insulation and energy efficiency – the better the insulation of a house, the less you have to spend on utility costs when it comes to heating or cooling throughout the year.
Smart tip
Note that for properties priced $500,000 and less, agents cannot charge a commission of more than 2 per cent of the sale price
For any queries relating to purchasing homes or dealing with real estate agents, consumers can contact the toll-free number 155 or lodge a complaint using the Consumer Council of Fiji mobile app.
■