FINANCE
10 Things
Every Homebuyer Should Know
Set yourself up for success
B
MEYER DE WAAL
Owner of My Bond Fitness and a conveyancing lawyer for over 28 years
uying your own home can be a daunting prospect . Many of us have spent our lives renting , so when we decide to take the step up to owning property we often aren ’ t quite as prepared as we should be . Here we break down exactly what a first time home buyer should know before signing on the dotted line .
1 . Become an Expert
The first thing many of us do before we buy a new mobile phone , TV or even a pair of running shoes is we research . We look up the product online , compare specs and read countless reviews before finally making our decision . You would think most of us would do that on the biggest purchase of our lives – a house . The thing is , we don ’ t .
Not only should you research the housing market extensively , comparing properties in your desired locations , but also get a Comparative Market Analysis ( CMA ) to compare the price you are being asked to pay with other prices in that neighbourhood . More often than not the estate agent involved will offer you a 1-piece brochure with information on the property – don ’ t be afraid to request more ! Buying a house is a 20-year commitment and one that should not be entered into lightly !
Use websites like Lightstone and PropStats to get a CMA on the property you might be interested in . Remember – the CMA is a guideline and not an accurate representation of the property market .
2 . Check You Credit Score
The major stumbling block in most property sales is financing , with only 1 in 4 home loans being approved . What many of us don ’ t realise is the importance our Credit Score plays in this decision . Your credit score will determine the rating the bank and other financial institutions give you after examining how you have handled credit in the past . If you have a “ thin ” profile and little or no debt , it generally means you have little information the bank can analyse and you may find it strange that the bank may request that you first open a store account to establish a credit profile and then come back to them
If you ’ re in the market for a new home , check out how much you could qualify for at My Bond Fitness . By knowing your credit score , you have the chance to improve it over time . This could potentially save you up to 30 % on your bond payments .
3 . Size Matters
After you have found out your credit score , you can check your affordability . This takes into account your income and expenses , working out the size of the loan you could potentially get from the bank . Knowing how much you could possibly borrow makes the entire process far simpler . Most agents will show a client several houses before they decide on the one they really like . After the potential owner has decided , the agent
26 AUGUST / SEPTEMBER 2018 SA Real Estate Investor Magazine