A bond before the bond

Many of the younger generation buyers are focusing on their careers and in turn getting married later on in life compared to their counterparts within older generations, however this has not affected their home-buying aspirations and we are seeing more and more unmarried single buyers that are purchasing property in today’s market, says Adrian Goslett, CEO of RE/MAX of Southern Africa. 

He notes that while the majority of bond applications are from married couples, the fact that the younger generation’s priorities have shifted more towards establishing themselves financially than setting a date to walk down the aisle has led to a trend starting to develop within the property market. “Much like during the property boom, first-time homebuyers are still predominantly those who are recently married or about to start a family. However there are also a growing number of single buyers and unmarried couples who may be waiting longer to get married, but understand that now is the right time to purchase a property. Marriage and other life goals still weigh heavily on millennial buyers, however homeownership is currently transcending those other plans,” says Goslett.

According to figures from Betterbond between January and June 2013 an average of 48.13% of bond application submissions they received were from one applicant and 47.55% were joint bond applications. While 48.53% of the total bond applications received during this period were from married couples, around 42.90% were from single buyers and co-habitants.

Susan Frost of Dunkeld, Johannesburg, purchased a property with her fiancé in 2012, however they plan to marry later this year. “We were initially renting a property together and decided that it made more financial sense to take advantage of the current market conditions and purchase a property that we could make our own. Interest rates are not going to stay where they are forever - so why wait? Purchasing a home beforehand also gave us the peace of mind that overspending on a wedding would not affect our future plans of owning property,” she says. “Aside from the financial aspects of the decision, purchasing a property together is a huge investment and our way of taking the commitment in our relationship to a new level and validating it before actually being married. It forced us to look whether our goals in life were in line, how to be practical with one another and how to compromise.”

She notes that while the decision to purchase the property together strengthened their relationship, it was not without its challenges. “As individual buyers with separate bank accounts we both needed to qualify for financing and each had to have a deposit along with additional money saved for our share of transfer fees and costs. We also drew up a contract to cover each party should anything happen such as death or a breakdown in the relationship, both of which are very important factors to consider when purchasing a home together,” says Frost.

Goslett says that couples who are not married and want to purchase property together should consider the following elements:

Discuss finances

It is imperative that the couple sits down before they purchase the property and discusses their finances and spending habits openly. “All financial matters or difficulties that could affect the property should be discussed, so that they can be dealt with appropriately before any problems arise. While purchasing a home together means that the costs are shared, it also means that the responsibilities are shared as well. Couples should be able to communicate openly about money and where each one of them is at financially.  If one person is unable to pay their share of the costs, it will affect both parties,” says Goslett.

 He adds that for precautionary measures, each partner should also have a will drawn up that addresses what will take place should anything happen to either party.

What are the priorities?

According to Goslett, the couple should discuss future plans and what aspects are priorities to them and which are just wants. Due to the fact that buying a property should be seen as a long-term investment, the couple will need to discuss whether children are an option as well as other issues that could possibly influence which home they decide purchase. “While the couple may not have plans for a family now, that doesn’t mean that it is not a possibility in the future. Other priorities could be security, lifestyle offering, proximity to work or family, all of which must be discussed,” says Goslett.

He notes that whether married or not, couples who want to purchase property have chosen the right time to do so. “Conditions in the market are ideal for buyers and buying as a couple could mean the chance of approval on a higher bond amount, which will open up more opportunities. The market is changing and those who don’t purchase property while the can could soon lose out,” Goslett concludes.

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