Weekend Argus (Saturday Edition)
TO ERR IS HUMAN DO YOUR HOMEWORK
BUYING property is a complicated process so it’s understandable that first-time buyers almost always make mistakes. But Yael Geffen, chief executive of Lew Geffen Sotheby’s International Realty, says not all mistakes are equal.
“Many oversights or errors in judgment are easily remedied while others can significantly impact on your life and investment returns.”
She says common first-time buyer errors include:
◆ Not having a clear idea of what they want Many first-time buyers neglect to consider crucial factors in their property search which can seriously affect their lives and make them regret their choices. Factors like the type of neighbourhood they want to live in, proximity to amenities, and how much fixing up and upkeep they are willing to undertake are important.
◆ Not being sure what they can afford
Pre-qualification gives buyers the peace of mind that their credit record is in good standing, and the knowledge of how much they can afford to spend and the type of bond deal they can expect from a bank or bond originator.
◆ Not factoring the additional costs into
the budget As a rule of thumb, buyers should allow for between 8% and 10% of the purchase price for the additional costs over and above the deposit. It is essential that they do their homework to ensure they are aware of all the relevant fees and procedures before they even start looking for a home.
◆ Not shopping around for the best rate
Buyers should know that shopping for a mortgage is like shopping for a car, and it always pays to compare offers.
◆ One of the best ways to compare
offers Use the services of a bond originator to source the best financing option.
◆ Not checking out the neighbourhood
in which they want to buy Look out for signs of suburb decline and check if there are any major developments in the pipeline that could impact on your lifestyle.
◆ Not taking into account the impact of regular convenience A nearby shopping centre where you can accomplish several errands at once could have a significant impact on both your happiness and your wallet.
◆ Allowing their emotions to influence
decisions Many first-time buyers overextend themselves financially because they fall in love with a home that is beyond their budget, or get in way over their heads with a fixer-upper that takes up all their spare time and money.