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Signs that say you are ready to buy a home

Purchasing a home is an exciting time for any first-time buyer - it’s a milestone and step towards owning an asset that could change the owner’s financial well-being for the rest of their lives. 

However, says Adrian Goslett, CEO of RE/MAX of Southern Africa, it is vital that buyers only take the leap towards homeownership when they are ready to do so, as it takes desire, stamina and a level of financial commitment.
 
Goslett points out that finding the right home and navigating the sometimes complicated process of the property sales process is not the only aspect buyers will need to contend with. There is also the element of learning how to be a responsible homeowner. “Dreaming about buying a home, looking at properties online and visiting a few show houses is one thing, but it doesn’t that mean that a buyer is truly ready to become a home owner,” he says. “There are a number of factors that need to be considered both financially and emotionally before a buyer decides that purchasing a home is the right decision and they are ready to step up their game.”
 
Goslett provides potential home buyers with a few pointers to mull over before they sign on the bottom line:
 
Are you planning on staying in one place?

“So you can buy a home for less than what you are currently paying for rent, so it seems like the better option right? Not always. Especially if the calculation hasn’t taken into account the cost of actually owning a home,” says Goslett. “Often a deposit is required, along with bond costs and attorney fees, not to mention insurance and maintenance costs. With all these factors added in, purchasing a home for a short term rarely makes financial sense. The buyer will need to hang onto the property for at least five to seven years before they will see any kind of financial return.”
 
According to Goslett, purchasing a property should be viewed as a long term commitment and, as such, it is important that the buyer has considered their future plans and where they see themselves over the next five to possibly ten years. This could depend on the buyer’s work situation or their family circumstances – if you are ready to settle in one place for a reasonably long period, then you just might be ready to buy.
 
Are your finances in order?

The reality is that most buyers in the property market are loan dependent, which means they require bond approval from a financial institution in order to purchase a property. Goslett says that approval is highly dependent on an applicant’s level of affordability, so before applying for bond finance, buyers should pay down their debt as much as possible. “Buyers need to focus on creating as big a gap as possible between the money they earn and the money that is paid out to expenses and debt. If they are looking for bond approval, it is also no time to take on any additional debt such as a car payment for example. This will negatively affect the buyer’s chances of obtaining finance,” says Goslett.
 
He notes that pre-approval through a bond originator is an excellent way for buyers to determine how ready they are financially to own a home and what they may need to do to get there.
 
Have you saved?

Saving goes hand in hand with homeownership preparation – this is not just for the deposit but also home maintenance costs, a contingency fund and of course, moving expenses.
 
“Taking the leap to owning a home means that it’s no longer the landlord’s problem when something goes wrong or needs repairing – it’s yours. There is a fair amount of maintenance that goes along with owning a property so it’s good to make a financial plan and have a nest-egg to dip into when need be. Even if owners undertake maintenance and repairs themselves to save on costs, they still need to buy the supplies and equipment for the job,” says Goslett.
 
Is it the right time?

According to Goslett, timing is a crucial factor when it comes to homeownership readiness. Ideally a buyer needs to be ready to buy, but also able to wait if required. Buyers don’t want to be in a situation where they either have six months left on the lease that they are unable to get out of, or the other extreme where they have just 30 days to find a home.
 
“Due to the nature of buying a home and the weight the decision carries, it is never a good idea to rush into the decision. However, it is also not good to let an opportunity slip through your fingers because you weren’t prepared. It’s important that buyers are not hesitant in today’s market, but also not surging forward without carefully considering all the necessary factors. It’s about having realistic goals and expectations,” advises Goslett.
 
Be realistic

A huge step towards being ready to own a home is realising that it’s not always going to be easy. Realistically homeownership takes time, effort and a financial commitment.  “While there may be some challenges that homeowners face along the way, the end result is a home that they can call their own,” Goslett concludes.

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