Looking to buy a house? Consider these following tips first
One of the things that come with growing up is having to leave your parents’ house and move into your own. Many people tend to make a mistake of buying a house without doing any homework. In most cases, they end up finding themselves in situations they struggle to get out of.
For this reason, we’ve decided to highlight the most important things to look for when searching for a house.
Write your priorities
The buying process is complex and takes time, and it’s easy to get off track. So, to stay on course, write down your priorities. This includes features that you’re looking for in a house. This is a helpful way to guide you through the process without forgetting some of the important things to you. This will help you eliminate houses that meet your needs, wants, and desires.
Do your research
Before you start your search, the first step to take is deciding where you want to live and on the type of house you want to buy. After you have decided on these, have a clear idea of what financing is available to you for the transaction. “Rough estimates of what you think you can afford just aren’t good enough in these days of stricter lending policies from financial institutions,” says Rhys Dyer, CEO of ooba home loans, South Africa’s leading home loan comparison service.
A good starting point would be to use a bond affordability tool, such as ooba’s Bond Indicator, which is a free, online tool. This will provide you with your credit score, a summary of your affordability, and a realistic indication of your price ceiling.
This will be a valuable guideline during your house hunt, and the Bond Indicator will issue you with an ooba Bond Indicator Certificate that you can submit when applying for a home loan. Another way to gain prequalification is to get yourself verified by an expert.
Now onto the search
First, decide on whether you want a standalone house or an apartment and then take it from there. Once you know what your requirements are, you can then begin your search for a house taking these following things into consideration:
- Where you want to live. The location is crucial, make sure it’s central and resalable.
- If you want to be close to a school, medical facility, supermarket and shops, and other useful amenities.
- The desired size of the home and whether a garden or balcony is a necessity.
- Whether you want to live in a gated community.
- Whether it’s important to be in a quiet neighbourhood.
Assess your credit record
Your credit score is a key element that will help you get your home. Without a good credit record, there’s not a single bank that will be willing to offer you a loan. Banks use your credit score to assess how much of a risk you are. Your credit score indicates to your bank whether your past debt repayment behaviour will make you a good risk or not. The higher your credit score, the better. A high credit score rating is one of the most valuable personal finance assets you can have.
Assess your credit score to determine your affordability before committing to anything. Also, bear in mind that having many applications done on your name, negatively affects your credit score. Make sure you have all this information beforehand to avoid unnecessary checks.
In the meantime, ensure you pay your bills on time, and don’t borrow more than you can afford; two of the most effective measures for securing a clear credit record.
Find a real estate agent
Get an expert to help you find the right home. “Anyone can look for a home, and even get a peek inside, without the help of an estate agent. But, unless you have the time to make house shopping a full-time job, chances are that an agent will be able to match you with your perfect property considerably faster,” says Rhys Dyer.
Find someone to build a relationship with, a person that will help fulfill all your house hunting needs. Use the agent to ask all the questions you may have, they are experts after all. Their knowledge of the housing market, and their ability to handle the paperwork and deal with sellers on your behalf, will make for a much smoother process. Furthermore, their services are free, as their commission is paid by the seller.
Find the right home
Now it’s time to go view as many places as you can. Schedule the viewings at your convenient times, don’t just rely on agent’s photos, go and see it for yourself. Be sure that the house you pick is the one you will be happy within the long run.
Sign an offer to purchase
Once you’ve found your dream home, and have all of your finances in order, you’re ready to sign an offer to purchase. This is an agreement between you and the seller that stipulates the terms and conditions for the sale of the property. Before you sign on the dotted lines, ensure that you fully understand the terms and conditions. If you can, consult a lawyer. Bear in mind that the seller is legally obligated to disclose any known defects in the building.
Rhys Dyer explains that an offer to purchase is a binding contract. “once you make an offer, you cannot easily change it,” she adds
Arrange a home inspection
The offer to purchase should include a requirement for a home inspection. This is your opportunity to discover any hidden faults in the property, and it’s important to be aware of what your rights are when it comes to this issue. Sellers are liable for all hidden faults in their property for three years after the defects have been discovered.
The seller will also receive a copy of the report, and it’s up to you whether to request that necessary repairs be made.
Apply for a home loan
Once you and the seller come to an agreement, the next step is to acquire a home loan to fund your purchase. With the home loan, it is important to check offers from different banks, study them, and see which one is more suitable for your needs.
The easiest route for you to take when applying for a home loan is to do so through a bond originator service such as ooba. The bond originator will send your application to multiple banks to secure you the best deal. Like the estate agent, bond originators come at no cost to the buyer. They receive a fee from the bank.
Make sure that before buying a house, you have at least put R50 000 aside to cover the attorney fees and registration costs. “While a deposit is not always required, try to put down 20% or more if you can, as the bank is more likely to offer you a better rate as the risk of the loan is reduced,” suggests Rhys Dyer.
To make the home buying process that much easier, consider employing the services of a home loan comparison service like ooba home loans, who among other services, offer a range of home loan calculators that can help you determine exactly what you can afford.