20 Expert Buying Tips For First (Or Second) Time Home Buyers

Buying a home is the ultimate dream for many people, but it’s not as simple as saving for a deposit, choosing your dream house and moving in. 

Purchasing property is a lengthy process from start to finish with a multitude of factors to consider and important decisions to be made and it can be very overwhelming, especially if this is your first or even second time.

However, it needn’t be overly complicated or stressful, especially if you have expert professional advice. The following tips will help guide you through the process of buying a home and beyond.

Before You Start Shopping for a Home

1. Assess Your Financial Situation: Before you even begin house hunting, take a close look at your finances. Evaluate your income, debts, and savings to get a clear picture of how much house you can afford. Lenders generally recommend that your bond payment should not exceed 28% of your gross monthly income.
2. Check and Improve Your Credit Score: Your credit score plays a crucial role in determining your mortgage rate and loan approval. Check your score early on and address any issues, such as paying off high-interest debt or disputing errors, to improve your chances of securing a better interest rate.
3. Save for a Deposit: Most conventional loans require at least 5-20% of the home’s price as a deposit and whilst some lenders offer lower deposit options, having a larger down payment will reduce your monthly mortgage payments and minimise the potential of financial strain down the line.
4. Get Pre-Approved: Before you start shopping for a home, get pre-approved for a mortgage through a bond originator like ooba. This gives you a clear idea of how much you can borrow and shows sellers that you’re a serious buyer. Being pre-approved can also speed up the buying process once you find a home as much of the paperwork will have been done.
5. Understand All the Costs: In addition to the deposit, there are other costs to consider, such as transfer costs, homeowner’s insurance, property taxes, and maintenance expenses. Make sure you budget for these and factor them into your financial planning.
6. Build an Emergency Fund Owning a home comes with unexpected expenses, from repairs to replacements and having an emergency fund can help cover these costs without putting a strain on your finances. It’s not always easy to save these days but try to aim for saving enough to cover 3-6 months living expenses before buying a home.

During the House Hunt

1. Work with an experienced Estate Agent: A knowledgeable agent can be invaluable during your home search. They can help you find homes that not only meet your criteria but are also a good investment, negotiate on your behalf, and navigate the complexities of the buying process. Make sure to choose an agent who is experienced in the local market.
2. Know What You Want: Create a list of your must-haves and nice-to-haves in a home. Consider factors like location, size, number of bedrooms, yard space, and proximity to schools or work. Having a clear vision of what you want will help you focus your search and avoid falling for a house that doesn’t meet your needs.
3. Research the Neighbourhood: Location is key when buying a home so it’s important to. research neighbourhoods to understand the safety, school district quality, commute times, and nearby amenities. Visiting the area at different times of the day can also give you a better sense of the community.
4. Attend Show Houses: Open houses are a great way to get a feel for a home and its condition. While visiting, take note of any potential issues like cracks in the walls, water damage, or the age of the roof. It’s also a good opportunity to ask the seller’s agent questions about the property.
5. Don’t Shop at the Top of your Budget: This is especially important in sought-after areas where you may face competition, and homes could end up selling for more than the asking price. If you are approved for up to R5 000 000 and shop for homes priced up to R4 800 000, you will have a buffer and be able to stay in the negotiation.
6. Be Ready to Act Fast: In competitive markets, desirable homes can sell quickly. If you find a house you love, be prepared to make an offer promptly. Having your pre-approval in place and a clear understanding of your budget will allow you to move quickly.
7. Don’t Get Emotionally Attached: It’s easy to fall in love with a home but try to remain objective. If a bidding war drives the price beyond your budget or the inspection reveals major issues, be ready to walk away. Keep your long-term financial health in mind over your emotional attachment to a property.

Negotiation and Making an Offer

1. Know the Market: Understanding the local housing market is crucial when making an offer. In a buyer’s market, you may have more room to negotiate the price, whereas in a seller’s market, you may need to be more competitive. Research recent sales in the area to get a sense of fair pricing.
2. Make a Strong Offer: If you’re in a competitive market, making a strong offer can set you apart. This doesn’t always mean offering the highest price but being flexible with terms like the transfer date or agreeing to cover certain repairs. Your agent can help guide you on what makes a competitive offer.
3. Be Familiar with the Seller’s Goals: A big part of negotiating with the seller is knowing what is important to them. The seller often has concerns that go beyond the price of the home, and your agent should find what these are. For instance, do they need to sell quickly or are they in no hurry or would they accept a lower price for a cash deal? 
4. Include Contingencies: Contingencies protect you in case something goes wrong during the buying process. Common contingencies include a home inspection, financing, and major repairs to be done. Including these in your offer ensures you can back out of the deal if significant issues arise without losing your hard-earned money.
5. Negotiate Repairs: If the home inspection reveals problems, don’t hesitate to negotiate for repairs to be done or a reduction in the purchase price. Sellers may agree to fix certain issues or offer a credit so you can handle the repairs after closing.
6. Get Everything in Writing: All agreements made during the buying process, no matter what they are or when they are made, should be documented in writing. This includes the purchase price, repair requests, and any seller concessions. Having everything in writing protects both you and the seller from misunderstandings or disputes.
7. Stay Calm and Patient: Buying a home is a major investment, and the process can be long and stressful. Be patient and keep your end goal in mind. Even if you face setbacks like losing out on an offer, remain calm and trust that the right home will come along.