After a busy – and generally expensive – festive season, I can’t help thinking that kicking off the New Year with a little retail therapy of a different kind is in order. And by that I mean, real estate retail. Not because I think that people should just buy property per se, but because I think that if people can afford it, property is still a prime/worthy/worthwhile investment. And a spot of portfolio planning as one goes into a New Year is always a good thing.
For those considering a property purchase, I find these tips from property expert and conveyancing property lawyer, Meyer de Waal, of Oosthuizen Meyer de Waal, particularly useful:
Check your credit score and affordability
The major stumbling block in most property sales is financing, with only 1 in 4 home loans being approved. Many of us don’t realise the importance our credit score plays in this decision. Your credit score will determine the rating the bank and other financial institutions give you after examining how you have handled credit in the past. Once you know this, it’s also advisable to check your affordability. This takes into account your income and expenses, working out the size of the loan you could potentially get from a bank. Ooba, BetterLife, most of the banks, as well as My Bond Fitness (www.mybondfitness.co.za) will give you free and quick evaluations of both your credit score and affordability. By knowing exactly what you can afford before beginning your search you not only remove the risk of falling in love with a house you can’t afford but you also improve your chances of finding one you like in your price range.
Budget
As simple as this may sound it can truly save you in the long run. When thinking of buying a property take an honest look at your finances and factor in potential bond repayments, as well as costs like insurance, rates and taxes, levies and property maintenance. Factor in also for other costs such as the bond registration fee and transfer costs.
Become an expert
The first thing many of us do before we buy a new phone, TV or even a pair of running shoes is research. We look up the product online, compare specs and read countless reviews before finally making our decision. You would think most of us would do that on the biggest purchase of our lives – a house. The thing is, we don’t!
Research the housing market extensively, comparing properties in your desired locations.
Get a Comparative Market Analysis (CMA) to compare the price you are being asked to pay with other prices in that neighbourhood. Websites like Lightstone and PropStats will give you a CMA on the property you are interested in. If you don’t subscribe yourself, ask an agent to get a CMA for you.
Shop ‘til you drop
Use every means at your disposal to find the right property for you – and don’t be afraid to keep asking for more viewings. Browse online to supplement any properties your estate agent might be showing you. Do the same when it comes to shopping around for the best bond amount and interest rate. Try your bank, try Ooba, BetterLife and SA Homeloans.
Get your grant
If you’re a first time home buyer, and earn a collective household salary of between R3501 and R15000 a month you could qualify for the government FLISP grant. See if you qualify at www.flisp.co.za.
Get represented
There are many other property related things that many of us don’t know about. Getting yourself a property attorney or conveyancer to scrutinize every part of the purchase process can save you thousands.
Get it inspected
One of the most important parts of buying a home is having it inspected. Buying something “voetstoets”, or “as it stands”, can end up costing you in the long run. Don’t be afraid to insist on a full home inspection to go along with the mandatory checks. Spotting something like a structural problem, dry rot or a pest infestation before you purchase means you have the chance to request the owner takes care of any issues before the sale goes through.