Buying property for the first time
Buying a home can be a daunting prospect for first time buyers, particularly in the current economic climate, which still presents challenging trading conditions.
Positive news however is that the housing market is beginning to see signs of recovery while still presenting sound buying opportunities for aspiring home owners across all price ranges and sectors of the market, says Mohammed Amra, area principal for Pam Golding Properties in the Port Shepstone area.
“More flexible conditions in the housing market are evident and we are seeing banks becoming more lenient and relaxing their lending criteria, a factor which is correlating into a rise in the granting of residential mortgages. In our area of the KwaZulu-Natal south coast we are noticing an increase in enquiries – both via the Pam Golding Properties website as well as clients visiting our office. But of great significance is that consumers are again demonstrating confidence in the marketplace, a factor which is critical to the residential property market.”
Amra says over decades residential property has proven to be a sound medium to long term investment, and as a result it has high appeal for many. “Against a volatile global worldwide economy, here in South Africa we are fortunate to have a resilient economy, and in turn a resilient property market. From a first time buyer perspective there remains good value for money in today’s market, with sound opportunities to gain a foothold in the property market and own your own home. For example, in Port Shepstone you can acquire a one bedroom flat for between R450 000 and R500 000 and a two bedroom flat from R450 000 to R600 000. With interest rates at a historic low it makes good sense to buy – thereby acquiring an asset - rather than rent a home.”
He says a significant percentage of home buyers begin their search on the internet. With just a few clicks of the mouse a vast array of properties currently on the market around the country are easily accessible, with thousands of on-line listings and good visuals of homes available. “This does not detract from the valuable role played by a professional real estate agent who can personally provide market information relevant to your own individual requirements and in your selected area.
“For those who are earning between R3 500 and R15 000 a month the government recently announced welcome news, as these aspirant home buyers will be able to obtain a subsidy of up to R83 000 to enable them to obtain housing finance from an accredited bank. The fund managed by the National Housing Finance Corporation will facilitate the flow of these funds directly to banks and sellers, and this should commence in April (2012),” says Amra.
He offers some sound advice: “For those seeking a home loan first of all check to ensure you have a good credit rating as this will stand you in good stead regarding your mortgage application. This means no judgements, no payment defaults, and that you have a good income to expenses ratio. We are finding that banks are more willing to grant 100% home loans to qualified buyers, and applicants will need to be full time employees and can produce at least three months’ bank statements. If you can provide a 10 percent deposit on the purchase price it will improve your chance of obtaining a home loan at an equitable rate. A mortgage originator such as Ooba will facilitate the entire process on the buyer’s behalf and motivate the buyer’s application.
“A key factor when finding your ideal home is the location and neighbourhood as these factors impact on the value of your home in the long run. When you go house hunting, consider proximity to your work, schools, shopping and parks; the appeal or ambience of the neighbourhood, how the home is positioned on the erf; ease of access onto the property; and noise from neighbours or traffic. It is not advisable to compare the selling price of a home to the prices of other homes for sale, because market dynamics mean that the actual value is the price a buyer is prepared to pay for a property. Sellers can ask any price they want, however it does not necessarily mean it will sell at that price. It is best to ask a professional agency for comparable sales of similar type homes in the same condition and location which have sold within the past three months.
“After viewing homes for a few days you will probably have a good feel as to which one or two homes you would like to buy. Ask to view them again and this will assist you, and you may notice elements which were overlooked the first time,” he adds.