Buying a home, especially your first one, is exciting. But it’s also time-consuming, stressful and one of the most expensive purchases you’ll ever make. You need to be absolutely certain that you choose correctly. Many hours of research are required to ensure you make the correct decision.
You need to be absolutely certain that you choose correctly. Many hours of research are required to ensure you make the correct decision.
You’ll need to be sure you buy in the right neighbourhood and at the right price.
Before buying, it might be a good idea to peruse some law guides around buying and selling a house in South Africa so you know what you’re getting yourself into. Here are a few tips to help you make the process just that little bit easier.
Start saving now
When you start thinking about buying a home, the first and most important step is to start saving. Yes, there are banks which will offer you a mortgage without requiring a deposit. But ideally, you don’t want to go down that road. Putting down some money will save you thousands of rands in interest and many months of time. Aim to have a deposit of at least 10% saved by the time you’re ready to buy. Also, don’t forget there will likely be transfer fees, lawyer’s costs and possibly immediate upgrades you’ll need to make. Saving money is never easy, but the sooner you start, the easier it’ll become until it’s a habit which you don’t even feel. If you’re planning on buying a small flat for R500 000, you’ll need a deposit of R50 000. That might seem like a lot but it’s totally possible if you put away R2 000 every month for two years. Even that might sound like a lot of money but it’s possible by avoiding that morning cup of coffee, lunchtime trips to the supermarket, evening drinks and sneaky cigarettes.
Be certain about what you can afford
Before you spend too much of your time shopping around, you need to be 100% certain about what you afford to pay toward your bond each month. Use a bond repayment calculator to work out what you can spend on a home based on your income and expenses. Using the calculator you can work out how much of an impact a deposit will make on your repayment process. You can also check how much money you’d save by paying a little extra into your bond each month. Also remember you’ll need to think about water, electricity, rates and all those extra costs of home ownership.
Do some research on the areas you’re looking at
You’ll likely already have an idea about the neighbourhood you’d like to live in. it might be an area you’ve lived in before, one close to your place of work or one where the best schools are situated. You need to think about your lifestyle and how your choice of neighbourhood will impact that. If you enjoy an active, outdoor lifestyle, a more rural area might be ideal for you. If you crave excitement and noise, action and culture, a city setting could be your perfect home-base. It’s also important that you think about crime statistics, schooling results, access to transport and resale value. In addition, you’ll need to keep your new house for quite a significant period of time before selling it. If you sell a home too soon after buying it, it might not have grown enough in value and you might not be able to recoup some of the costs. It’s generally agreed you should keep a house for at least four years to cover the costs of buying and moving. Of course, if you must move, for instance, in the event of a work transfer or new opportunity, it might be a good idea to rent the house out and have your tenants cover these costs.
Talk to your new neighbours
There are certain factors about every neighbourhood which only the locals might know. Does the nearby fast food restaurant leave the air filled with its oily, greasy aroma daily? Is the area underneath the flightpath of every noisy incoming and outgoing flight? Is the traffic in the street impossible every morning and afternoon due to pickup times at a nearby school? Knowing these details might just have a significant impact on the quality of your life. It’s important that you know these details before it’s too late.
Before you rush into buying, ask yourself these questions:
Do you have a deposit saved?
Do you have enough money to cover the fees of the transaction?
Do you have money saved in an emergency fund for any unexpected costs?
Is your income stable and long-term?
Are you planning to keep the house for the foreseeable future?
If you’ve answered “yes” to all these questions, you’re ready to buy! You might have dreams about parquet flooring, high ceilings, natural light and views of the surrounding mountain ranges. But if you only have the budget for parking lot views and old carpets, you’ll need to face facts. Champagne taste on a beer budget just won’t work when you’re house hunting. Knowing these factors and what you can afford before you start looking will make the process so much easier.