Six common mistakes to avoid as a first-time property buyer
Relying totally on the internet. A good estate agent might be able to show you properties that haven’t been advertised yet and should certainly be able to help you find the listed home that most closely meets your requirements. Getting too emotionally attached to one house. Setting your heart on a particular property too early in your home search could blind you to other homes that would have been a better choice in the long run. This is very likely the most expensive purchase you’ll ever make, so you need to stay calm and make sure you’re getting the best value for money and a home with an ambience you like. Not being prepared for ownership. First-time buyers are often attracted to the idea that home-ownership brings freedom, but being an owner actually comes with many new responsibilities, including all maintenance and repair work, the provision of security and the payment of homeowners’ insurance and municipal rates and taxes. You need to be mentally and financially ready for these. Not saving enough. Many prospective buyers will save just enough for a decent deposit, not realising they’ll also need cash to cover the “hidden” costs of buying a home, including the bond registration fee, legal fees, and transfer costs. And on top of that, we usually suggest that you should save your moving costs and an amount equivalent to two to three months’ home loan repayments as an emergency fund. Not checking your credit score. You should always do this at least three months before you start house-hunting so that if there are any black marks or errors on your credit record you can address them or get them fixed. If you are seen by the banks as a bad credit risk, your application for a home loan may be turned down – or you’re likely to be charged a higher rate of interest. (Go to https://www.clearscore.co.za/ for a free credit report and score.) Not getting pre-qualified for a home loan. This is easy to do through a reputable bond originator and establishes how much you can afford for a home. You won’t waste time looking at properties you can’t afford, and sellers will be more willing to negotiate when you do make an offer to purchase.
Gerhard Kotzé is MD of RealNet