If you’ve set your sights on buying the house of your dreams this year, you’ll be pleased to hear that current buyers’ market conditions look set to continue for at least another few months. That doesn’t mean you should just sit back and wait for the perfect opportunity to come to you, though! Tony Clarke, MD of the Rawson Property Group, says proactive purchasers are far more likely to make successful property investments. Here are his tips on putting your best foot forward!
Save up for a healthy deposit - it really does make a difference
According to Rawson Finance, lenders grant up to 105% bonds on offer to qualified buyers in certain circumstances, but Clarke says smart buyers are putting down deposits this year, anyway.
“Putting down a deposit – traditionally around 10% of the purchase price – helps to minimise the risk your bank is taking by granting you a loan,” he explains. “This can have a significant effect not only on their likelihood of granting you finance, but also on the interest rate they’re willing to offer you.”
Rawson Finance National Admin Hub Manager, Leonard Kondowe, confirms that buyers with deposits qualify for better interest rates than those asking for 100% bonds. That can literally save you hundreds of thousands of rands throughout a 20-year loan, and turn a middling investment into a real winner.
Prequalification will set you apart from other buyers
Don’t be fooled into thinking that getting prequalified is only essential when it’s a sellers’ market. Competition for specific properties can be fierce at any time, particularly within popular neighbourhoods and price bands.
“A good property, for a fair price, will often attract numerous competing offers, regardless of what the broader market is doing,” says Clarke. “The last thing you want is to find that perfect home and then lose out to another buyer simply because they took the time to get prequalified, and you didn’t.”
Apart from making your offers more competitive, the prequalification process also helps define a realistic price range for your property search.
“Don’t waste time looking at homes you can’t afford,” says Clarke. “Rather put that energy into finding a property within your price range that ticks all the boxes and will support your future climb up the property ladder.”
Get prequalified and apply for a home loan
Talk through the process with a local property professional
Chances are if you’ve thought about buying a property in 2021, you’ve done a bit of online research. There’s no doubt that the internet holds a wealth of information for the knowledge-hungry buyer, but Clarke says nothing can ever replace the on-the-ground knowledge of your local real estate agent.
“Buying a property is not an everyday occurrence,” says Clarke. “It’s a huge commitment, both financially and emotionally, and can seem quite overwhelming at times. Being able to talk through your hopes, your concerns and your questions with a professional who not only understands the market, but also the neighbourhood you’re buying into, is a great way to get comfortable with the process and ensure you’re making smart property decisions.”
As a side benefit, getting to know your local agents also puts you first in line to hear about the latest properties hitting the market.
Find your local neighbourhood expert
Think long term
With excellent value for money on offer, a great selection of properties to choose from, and record-breaking low-interest rates, it can be tempting to dive into a purchase without overthinking things. Clarke urges buyers to remember the long-term nature of property investments and make sure their decisions don’t only suit their needs today, but also in the future.
“Buyers, in particular, need to be sure a property will support their lifestyle for the next five to ten years at the very least,” he says. “Consider things like some room to grow if you hope to start a family, and make sure the location offers everything you may need in terms of job opportunities, schools, shops, transport, sporting, and social facilities.”
Buyers should also be aware of the additional costs that come with buying and owning property. Transaction fees and transfer duty can add significantly to a property’s purchase price, while rates, taxes, electricity, water, insurance and maintenance will be ongoing costs for the duration of ownership.
Shop around and know your stuff
Getting to know the market is an essential step for any prospective buyer – how else are you going to learn to recognise a great value property when you see one? Clarke says online listings are a good place to start. “I think the main thing is to make sure you’re following sound advice from a property professional,” says Clarke. “There are outstanding opportunities out there, but there are also some pitfalls. Don’t put your future happiness at risk by making impulsive property choices.”
