A winter solution for frozen buyers

Cars need anti-freeze in winter and so, it seems, do many potential homebuyers who find themselves stalled now in the search for a suitable property.

“Part of the problem,” says Jan Davel, MD of the RealNet estate agency group, “is that there is just so much to choose from in the current market that many prospective buyers worry about missing something better – and possibly cheaper – if they make a purchasing decision too soon.

“On the other hand, some buyers just freeze up at the idea of having to make a long-term financial commitment. Even though they are keen to become homeowners and believe they have found the right property, they just can’t bring themselves to sign an offer.”

And, he says, since the purchase of a home is one of the most important and far-reaching financial decisions most people will ever make, this state of uncertainty is not something they should ignore.

“You should never discount your instincts but rather take the time to backtrack and find out what is causing the conflict between wanting to buy and being unable to make a decision. In our experience, the root cause is usually a concern about money and fortunately, there are several constructive ways to address this concern and proceed with your homebuying plans.

“You can start, for example, by asking an agent you trust to show you some more homes in a lower price bracket. It is prudent to buy for less than you can actually afford and create a buffer for yourself in case of financial emergency, over and above the margin that most mortgage lenders are now building into their loan qualification calculations to ensure that borrowers will be able to cope with the rising costs of home ownership and maintenance as well as possible interest rate increases."

Or, says Davel, if you’re intending to buy primarily because you plan to start a family, perhaps you need to reassess your ability to accomplish two big financial goals at the same time. "It is hard to cope with a mortgage and burgeoning family expenses all at once - and constantly having to worry about cash flow does tarnish the pleasure of home ownership.

“The answer is to be realistic at the outset about how your financial pie is - and will be - sliced up, and if necessary to set your current sights on a less expensive home that will mean a smaller home loan repayment every month and the chance to eliminate other debts and improve your cash flow position. That way, you’ll be able to buy and still retain your peace of mind.”

And finally, he notes, if what you’re worried about is the future of the property market and its possible effects on the value of your investment, you need to know that any home that you can comfortably afford that is in good condition and a good neighbourhood will be a good investment over time.

“What you should be more concerned about is buying your own property and starting to build wealth as soon as possible instead of continuing to pay rent while you sit on the fence.”

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