select
|

Property education for first-time home buyers

Purchasing a new house is one of the biggest financial investments you’ll ever make, and no doubt you’ll have many questions regarding the process. Just Property offers a guide to first time buyers to ensure they are informed about the process.

Here is the basic progression you can expect:

1) Find a home.

Make sure to take advantage of all the available options for finding homes on the market, including using your real estate agent, searching for listings online and driving around the neighborhoods that interest you in search of for-sale signs. Also put some feelers out there with your friends, family and business contacts. You never know where a good reference or lead on a home might come from.

2) Consider your financing options and secure financing.

First-time homebuyers have a wide variety of options to help them get into a home, including loans and loans for homebuyers who don't have the standard 20% minimum down payment. Your mortgage interest rate will also have a major impact on the total price you pay for your home, so shop around. It will really pay off.

3) Make an offer.


Your real estate agent will help you decide how much money you want to offer for the house along with any conditions you want to ask for. Your agent will then present the offer to the seller's agent; the seller will either accept your offer or issue a counter-offer. You can then accept, or continue to go back and forth until you either reach a deal or decide to call it quits. 

4) Obtain a home inspection.

Even if the home you plan to purchase appears to be flawless, there's no substitute for having a trained professional inspect the property for the quality, safety and overall condition of your potential new home. If the home inspection reveals serious defects that the seller did not disclose, you'll generally be able to rescind your offer and get your deposit back. Negotiating to have the seller make the repairs or discount the selling price are other options if you find yourself in this situation. 

5) Close or move on.

If you're able to work out a deal with the seller, or better yet, if the inspection didn't reveal any significant problems, you should be ready to close. Closing basically involves signing a ton of paperwork in a very short time period, while praying that nothing falls through at the last minute.

Things you'll be dealing with and paying for in the final stages of your purchase may include having the home appraised (mortgage companies require this to protect their interest in the house), doing a title search to make sure that no one other than the seller has a claim to the property, obtaining private mortgage insurance or a piggyback loan if your down payment is less than 20%, and completing mortgage paperwork.

Top Tips for first time buyers are:

Construct your own personal cashflow model and see how much you can really afford
Get information about all the costs upfront, levies, transfers etc. These can be as much as 8% of the cost of the property
Seek advice - reputable bond originators give impartial advice for free
Shop around - the lending market is competitive and there are many different products available. Don't jump at the first offer you are given
Strengthen your negotiating position by getting pre-qualified for mortgage finance
Check the title deeds to ensure there are no onerous title deed restrictions or servitudes
Get a specialist to check for structural defects or roofing problems before you buy. Also, pay attention to plumbing and electrics.
First time buyers should know the difference between occupation and possession. The change of ownership only takes place on the day that the transfer is registered at the Deeds Office
Look to maintain your level of payments if interest rates fall. Your bond originator will happily run the scenarios for you of putting away a bit extra every month into your bond repayments, and the effect this has of reducing the total cost of your loan
Putting a bit extra into your bond every month also turns your bond into a virtual high interest, tax-free savings account, since that money can be accessed at a later date for spending



  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 25 May 2018
      Reliable public transport systems moving a mass of commuters to and from work, keep a city’s economy moving. Not only do they have a positive impact on economic growth, successful rail links also influence property values.
    • 25 May 2018
      The live, play and visit environment that Centurion Residential Estate & Country Club offers continues to attract buyers looking for a very specific lifestyle and ambiance.
    • 25 May 2018
      As expected, the Monetary Policy Committee kept the repo rate stable, with analysts and market commentators ahead of yesterday's announcement (24 May 2018) pointing to a more hawkish stance amid a weaker rand, somewhat less stable global environment, and an eye on the inflation outlook – coupled with the increase in VAT and sizeable hike in the price of fue
    • 24 May 2018
      Most real estate professionals agree that 2017 was one the toughest years to date; an eminently challenging 12 months that subdued even the strongest markets - including the country’s economic powerhouse of Sandton.
    • 24 May 2018
      These are uncertain and challenging times for the real estate industry, but the non-profit organisation Rebosa is fighting for their interests and finding pragmatic solutions to industry issues such as the urgent need to fast-track transformation says Richard Gray, Rebosa chairman.
    • 24 May 2018
      The decision to invest in property isn’t one that’s taken lightly, or dealt with flippantly. The same should ring true when deciding on an estate agent partner to handle the letting out of your property.
    • 23 May 2018
      Homeowners who are thinking of selling and “trading up” to a bigger or a better home had better be quick now if they want to get the best deal.
    • 23 May 2018
      The new Loftus Park development in Arcadia is really going to boost the demand for homes and rental accommodation close by and the neighbouring suburb of Sunnyside, says Gerhard Kotzé, MD of estate agency group RealNet Holdings.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK