Everyone wants to buy a house at some point in their life. It is probably the biggest purchase they can make in their life and requires a commitment that has spanned more than 20 years.
Often, first-time buyers end up spending more than they should because they are new to the process.
But if potential buyers approach it intelligently, it could be both exciting and financially rewarding.
Knowing exactly what to do, what to look for, and what pitfalls to avoid when buying a home could save you a few hundreds and even thousands more during the home buying process.
“There may be a lot of paperwork, logistics and a fair amount of money involved in buying and insuring your home, but it’s totally worth it, especially if you do your homework and act wisely,” Budget Insurance spokesperson Susan Steward.
Take the time to prepare financially
- Save, save, save: You will need a good deposit and cash flow to cover the buying process and the renovations. The buying process includes the transfer tax, solicitor’s transfer and bond filing fees and start-up fees.
- Check the insurance box: Make sure you can afford property insurance – which covers bond, building insurance, household contents insurance, and personal liability insurance.
- Resolve your debt well and improve your credit score– The better your credit score, the better your risk profile and the better your chances of getting a competitive interest rate. Make sure all your accounts are up to date and paid regularly, check your credit score and address any issues before applying for a home loan.
The house hunting process
- Location, location, location: Buying a home close to schools or your workplace will save you fuel costs while commuting.
- Security control: Properties and suburbs with excellent security measures in place can carry a lower risk profile and better insurance premiums.
- Compare: Make sure the same property isn’t listed elsewhere at a more competitive price.
- to negotiate: Don’t be shy when negotiating the selling price and don’t be afraid to make a cheeky offer. If you use an agent, make sure their commission is competitive, a lower commission could result in more flexibility on the selling price.
- Out of plane: Buying an off-plan home in a development saves you on relocation fees.
- Under a million: Homes with less than Rand 1 million are exempt from transfer tax, which allows more finances to be funneled into renovations or furniture purchases.
You found the perfect home, now what?
- Home loan purchase: Shop around and compare to make sure you get the best deal with the lowest fees and best interest rates. Don’t assume your transactional bank will give you the best value for money.
- Invest in an inspection: The assessment made by the mortgage provider only checks that your offer on the property is fair value. But an independent inspection will ensure that the property has no defects you may have missed, such as sagging, rising damp, roof problems, and retaining wall stability.
- Debt checks: Make sure the property you are purchasing has no outstanding tariffs, taxes or utilities as you will not be able to open a new account until it is paid.
- Use a lawyer: The seller has the right to choose the transferring attorney, but you can negotiate with the seller so that the same attorney is used for the transfer and registration, allowing you to negotiate a better rate for both services.
Moving to your new home
- Tidy up your old house before moving in: Having fewer things to move is an advantage, so get rid of the things you don’t need before moving. Remember to remove these items from your insurance policy as you could save a significant amount of money.
- Reuse: If there are things from your old house that you can easily reuse and use in the new one, try recycling and reusing them to save them.
- Goods in transit: Check if your insurer covers the goods in transit and if this option is also provided by your moving company. It will avoid doubling your coverage and overpaying.
- Keep to save: Maintaining your home is critical to maintaining its value and avoiding costly repairs. This also results in fewer insurance claims, which could have a positive impact on your risk profile and premiums, saving you even more.
“When you check all of these boxes, you could end up with a couple of hundred rand to thousands of dollars in your pocket, so being smart about buying homes makes sense … and cents,” Steward concluded.
Compiled by Narissa Subramoney
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