Top tips for buying your first home.
Category Advice
Buying your first home can be an exciting but daunting process. While it may seem overwhelming at first, with the right approach and some careful planning, you can find a property that ticks all the boxes. From understanding your finances to finding the perfect location, it is important to be well-informed before making such a life changing decision.
Some key learnings which every first-time buyer should know when deciding to purchase their dream home.
1. Location, location, location! Also known as the Three L's:
There are three micro locations that define the actual location of a property on a macro level. If the property you want to purchase is in an estate for example, you may want to find out what area of the estate it sits in and what that actual area provides, such as a good sea view, etc.
2. Financial stability is important:
Get your credit card payments and debts in order.
3. Budget:
Establish a realistic budget to determine your affordability. Create a budget and try to stick to it so that you can enjoy the process and not put yourself under too much pressure.
4. Find a trustworthy real estate agent:
This is the person that will assist in picking out your potential home and exploring your new neighbourhood and is also responsible for scheduling tours and negotiating important contracts on your behalf. Ensure that this is someone you trust, to have your best interests at heart.
5. Get approved:
Get a pre-approval letter before you start shopping! This will help you have realistic expectations on what you can afford.
6. Be mindful of transfer and closing costs:
First time buyers usually tend not to factor these costs in, and it comes as a huge surprise at the end. Doing your homework is a very vital part of house hunting.
Becoming a first-time homeowner can be an overwhelming experience and requires careful consideration of several factors. With the expert advice, first-time home buyers can make an informed decision and successfully unlock the door to their dream home.
It is quite easy to get side-tracked by financing and transferring issues when buying a property and there, it is essential to address the factors below long before the actual buying process starts - and ensure no surprises await you once the transaction has gone through.
These are the questions first-time buyers must ask estate agents:
1. Ask the agent for a CMA (Comparative Market Analysis) of the property and ask the agent to explain how the value of the property was determined.
2. Ask the agent about patent defects. Did the seller disclose everything? Make sure that everything is specified in the sales agreement.
3. Ask whether the plans of the property are approved and if there is an undertaking by the seller to provide these plans.
4. Ask if there are any hidden costs, such as the replacement of equipment in the property which is not included in the sale.
5. Ask what exactly is included and not included in the sale and if anything has to be removed and replaced by the seller and ask for that to be stipulated in the sales agreement.
The idea of homeownership as the holy grail of adulthood and evidence of success has been ingrained in us for generations and property still remains one of the best long-term investments, so many people are in a quandary about whether to delay the purchase or bite the bullet and get a foot on the property ladder no matter the consequences.
But it's not a simple choice as each option offers distinct benefits and drawbacks and with the economic fluctuations, high interest rates and uncertainties that we're seeing, it's essential to carefully assess one's current financial situation and long-term goals before committing to either option.
Advantages of Ownership:
Building Equity:
One of the most significant advantages of homeownership is building equity. As you make mortgage payments, you are gradually increasing your ownership stake in the property. Over time, this equity can serve as a valuable asset and a potential source of wealth.
Stability and Freedom:
Owning a home provides stability and the freedom to personalize and modify the property to suit your preferences. You have more control over your living space and can make long-term plans without concerns about lease expirations or rent hikes.
Tax Benefits: Homeownership can come with tax advantages, such as deducting mortgage interest and property taxes from your taxable income. These benefits can help reduce your overall tax liability.
Author: Extract from Property 24
