Purchasing a home for the first time can be a very emotionally driven experience with so many new and exciting things to consider, and sometimes complicated processes to negotiate. Often it can be easy for first-time buyers to get caught up on the smaller details, losing sight of the bigger picture and possibly making mistakes that they will pay for in the future, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
He provides a few tips to buyers to avoid some common mistakes when purchasing their first home:
Mistake - Not getting pre-approval
Once the decision has been made to buy a property, it might be tempting to jump straight into looking for a home; however this could lead to disappointment down the road. Goslett says that buyers may end up finding a home that they love, only to learn that it is out of their price bracket when they apply for finance.
"It is best to start the process by consulting with a bank or a bond originator such as Betterbond, which can assist the buyer in determining what they can qualify for. Getting pre-approval will save both the buyer and seller a lot of time, because the buyer will be able to sign an offer to purchase knowing that they have the finance available to purchase the property," says Goslett.
Mistake – Not working out what you can afford
There is often a difference between what a buyer qualifies for and what they can actually afford, bearing in mind that there needs to be some cushioning in the budget for things such as interest rate hikes. It is vital for buyers to have a look at their own finances and make a list of their expenses before settling on a house budget.
"If buyers know what they can afford it will narrow down the property search and ensure that they are not looking for homes outside of their budget," advises Goslett. "It is important that buyers don’t stretch their finances too thin, leaving them vulnerable to any unforeseen circumstances."
Mistake – Focusing on the flaws
While first-time buyers should not compromise on their must-haves, it is important that they don’t overlook a home that essentially meets their criteria, but may have outdated fixtures.
"In some cases a buyer will need to look past certain things to be able to recognise the true potential of a home," says Goslett. "If a buyer focuses too much on the things that are wrong with a home, they may miss the things that are right. It is important not to let go of the crucial elements, but also be able to compromise on aspects that are less important. The cosmetics of a home can be altered, however the home’s location, the view or floor plan cannot."
Mistake – Falling in love blindly
Buyers shouldn’t overlook a home because of its flaws, but they shouldn’t completely ignore them either. A home’s look is one thing, but more serious issues such as structural damage or a roof that needs to be replaced is quite another.
"Often once buyers have seen a property that they think is the one, their decisions will be based on the emotional connection they develop with the home. It is important that a buyer looks at all the facts before blindly putting in an offer without being fully aware of all the property’s issues," advises Goslett.
He notes that if the buyer has any doubts regarding the property, they should enlist the services of a professional contractor who will be able to inspect the home and give them a report as to what is in need of repair.
Mistake – Waiting too long
It is vital to make informed decisions when selecting the right property, but taking too long to decide before putting in an offer could mean losing out to a faster buyer. With the shortage of property available to buyers, consumers find themselves in a highly competitive property market.
"When a buyer has found the right home, they should be decisive and move quickly to avoid disappointment," says Goslett.
Mistake – Not thinking about the future
Buyers need to consider things such as the resale potential of the home as well as their future plans. While it may seem strange to think about selling the home before it has even been purchased, much of home’s potential return on investment is based on decisions made when the home is bought and not when it is sold. Factors that will affect the home’s resale value include the home’s location, type of property, the number of bedrooms or whether it has a garage or off-street parking.
According to Goslett buyers also need to consider whether the home will meet their needs both now and in the future.
"For example, even if a buyer does not have children at the moment, they might be planning to have in the near future. This could mean needing an extra bedroom or ensuring that they purchase near to a good school. It is important that buyers consider whether the home meets their current situation, but can also change to meet their evolving needs," Goslett concludes.