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Deposits remain key to buying a homeProperty ownership is considered to be one of the biggest investment decisions and financial commitments a person can make. This is why purchasing property is not a decision to be taken lightly and it is important for buyers to ask the right questions and do the necessary research before signing an offer to purchase.
Elza Schoombie, Broker/Owner of RE/MAX Country Classic which operates in the Ladybrand area of the Free State, says that the first thing buyers should do when looking to purchase a home is to establish what price range of property they can afford and then save up a deposit of at least 10%.
"Saving up for a deposit of between 10% and 30% will help buyers when qualifying for home loan finance," says Schoombie, who notes that buyers should also ensure that they have extra cash available for the transfer and bond fees. When it comes to other costs associated with buying a property, Schoombie says buyers should be prepared to pay the transferring attorney, as well as the attorney registering the bond. "Buyers also usually forget about the fact that they have to have insurance on the property as well as some kind of life cover policy in the event that something should happen to the registered owner. Buyers should also keep in mind that they will be liable for the monthly rates and taxes account."
According to Schoombie, when it comes to obtaining finance, buyers need to be sure that they have a good credit record. If a buyer is applying for finance under a company name, they need to ensure that the company’s financial records are up to date, and financially sound.
Adrian Goslett, CEO of RE/MAX of Southern Africa says that having a favourable credit rating is essential to obtaining the necessary finance to purchase a home. "This is why consumers should know their credit rating score and how to build it up to ensure that it is looked upon in a positive light by credit providers and financial institutions."
When looking at specific areas in which to purchase a property, Schoobie says that buyers should look out for empty sites in the area and confirm what the future plans are for development in the area. She says that buyers should also take into consideration the average value of the properties in the area as it will influence the selling price when they want to sell again.
When it comes down to making the final choice out of a selection of properties, Schoombie says buyers should take into account why they decided to buy a property, what their requirements were and their reasons for selecting a specific area, be it for proximity to schools and amenities, or for its investment potential. "Both the home and the area need to meet the buyer's current needs, and considering it is a long term investment, the property should also be suitable for the buyer for the next five years."
Details of the property that a buyer should look at closely, according to Schoombie, are the structure of the home in terms of quality of material and building; the roof to assess if there are any major leaks and the foundations.
Schoombie's final word of advice to buyers is to remember the importance of location. "Buyers often underestimate the importance of location and just how much subtle differences between two areas can impact on the property price," she says. "Buyers have to understand why property values differ from suburb to suburb and in some cases from street to street. Rather buy a property that costs less in an area that offers more, than an expensive property in an area that has limited appeal."