Advice for First Time “Home Buyers”
The term FIRST TIME HOME BUYER refers to someone who is buying their first property – mainly younger buyers who have little or no experience of the purchasing process, let alone owning and maintaining a property. First time buyers often are unable to make informed and balanced decisions about such an important and long-term commitment.
CENTURY 21 Tzaneen has compiled some tips, designed to assist you with your decision-making. We are committed to helping you find the property that is right for you, and to utilize the full investment potential of your new property.
DO NOT RUSH INTO ANYTHING
It is to your benefit to move into the property market as soon as possible because property prices are consistently increasing, so the sooner you enter the market, the less you will pay for your first home. With this in mind however, you should not feel rushed to put in an ‘Offer-To-Purchase’ on the first home that catches your eye. By spending time making your decision, you will increase your opportunities to find the right property at the right price for you. Even if you miss one bargain, rest assured another (and probably better one) will come your way.
BUY THE BEST HOUSE (OR THE ONE YOU CAN AFFORD, AND WAIT)
If you have an image of your dream home in your mind, and are able to afford it now, then purchase it! The financial sacrifice you make now will pay off many times over in the future. If this is not you, buy an entry-level house that is affordable and practical for your needs right now, instead of settling for the next-best thing to the actual dream-home. You can save money each month on a cheap, entry-level home and save up towards your dream home.
CHECK THE SELLING PRICES OF COMPARABLE HOMES IN YOUR AREA
Web sites can give you a general idea of what you should expect to pay, or you can speak to a CENTURY 21 Property Professional, who can give you inside information regarding prices in the particular area, and can help you value a property.
SEE WHAT YOU CAN AFFORD
Use CENTURY 21 Tzaneen’s mortgage calculator to see what your payment would be. Speak to one of our Agents to find out what your total monthly housing cost would be, including rates & taxes and homeowners insurance. To get an idea of what you'll pay in insurance, pick a property in the area where you want to live and make a call to a local insurance agent for an estimate. You won't be obligated to get the insurance, but you'll have a good idea of what you'll pay if you buy.
FIND OUT WHAT YOUR TRANSFER & BOND COSTS ARE
The upfront cost of settling on your home shouldn't be overlooked. Transfer and Bond costs and origination fees charged by the lender can add substantial amounts to the purchase price. Make sure you know what all the costs involved are, and that you have the finance to cover these costs.
MAKE A BUDGET
Look at your budget and determine how a house fits into it. CENTURY 21 Tzaneen recommends that buyers spend no more than 28% of their income on housing costs. Go much past 30% and you risk becoming house-poor.
TALK TO A CENTURY 21 AGENT
Talk to reputable CENTURY 21 agent in your area about the real-estate climate. Do they believe prices will continue falling or do they think your area has hit bottom or will rise soon? Our Property Professionals will give you the best advice for making your purchase.
REMEMBER TO LOOK AT THE BIG PICTURE
While buying a house is a great way to build wealth, maintaining your investment can be labour-intensive and expensive. When unexpected costs for new appliances, roof repairs and plumbing problems crop up, there's no landlord to turn to, and these costs can drain your bank account.
So consider whether you're ready for the expense and effort of homeownership before pulling the trigger.