Your 10-step plan to buying a home

WOULDN’T it be great if buying a home were as simple as it is in a game of Monopoly, says Elaine Chetty, licensee of Seeff Richards Bay.

“All you’d have to do is find a desirable neighbourhood, hand the bank a few rand, and you’d receive a house. But the home-buying process is more complicated in real life, and in many markets competition among buyers has become intense. If you’re serious about home ownership, you must get your act together,” she says. The first step is to find an estate agent you feel comfortable working with on what is likely to be the largest financial decision of your life. Ask friends and family members for referrals, and interview several agents. Choose an agent who communicates, has your best interests at heart, and puts you first. Once you’ve chosen an agent, ask he or she to recommend lenders – the organisations or people who will lend you money so you can buy your home. Choosing a lender who is competitive on rates, is communicative and available is key. Now that you have a great lender, you can ask for guidance on any credit score issues you may be facing. The lender can provide guidance to help repair your situation and get approval for a loan. A lender will help determine exactly what you can afford and which homes you should be considering.

To arrive at a purchase price, you need to factor in expenses like home owner’s insurance, transfer and bond costs and utilities costs to make sure you can comfortably make your bond payments. The lender will then identify the total amount of money they are willing to lend you. Having a pre-approval letter in hand when you are ready to purchase a home adds strength to your offer. This can be an important advantage in a competitive home-buying market. Once you know your buying power, talk to your estate agent about your ideal home. Come up with “musts” and “wants”. Think bigger than the colour of the kitchen or the floor plan. For instance, do you want to be within walking distance of shopping outlets? Do you want space between you and your neighbours? Is proximity to a good school the most important factor? Now comes the fun part: searching for homes that meet your parameters.

When you begin touring homes on your shortlist, take along a notepad and jot down your thoughts as you approach each home. Can you imagine yourself living there? Make notes of what you like or don’t like about each home. The due diligence process usually includes walking through a prospective property to make sure you haven’t missed hidden problems. Your agent should guide you here. If issues are found, negotiate for the current owner to fix them or take the cost of repair into consideration when making an offer. Your estate agent will walk you through the steps required to make an offer on a home in your area that meets your requirements. Expect some negotiation, and discuss a competitive offer with your agent. Once your offer to purchase is accepted, you’ll work with your lender to get final approval for your home purchase by the date specified for the closing. The lender may require a deposit, so make sure you know what funds will be expected. Don’t make major purchases until after closing, especially if you’ll be using credit as that can affect your mortgage qualification.