Watch Your Credit Profile It’s not wise to make any huge purchases or move your money around three to six months before buying a new home. You don’t want to take any chances with your credit profile. Lenders need to see that you’re reliable and they'll want a complete paper trail so that they can get you the best loan possible. If you open new credit cards, amass too much debt or buy a lot of big-ticket items, you may have a hard time getting a loan.
Get Pre-Approved for Your Home Loan Getting pre-approved means a lender has looked at all of your financial information and they’ve let you know how much you can afford and how much they will lend you. Being pre-approved will save you a lot of time and energy so you are not running around looking at houses you can't afford. It also allows to shop around for the best interest rates.
Don’t Try to Time the Market Don’t obsess with trying to time the market and figure out when is the best time to buy. Trying to anticipate the housing market is impossible. The best time to buy is when you find your perfect house and you can afford it. Real estate is cyclical, it goes up and it goes down and it goes back up again. So, if you try to wait for the perfect time, you’re probably going to miss out.
Bigger Isn’t Always Better Everyone’s drawn to the biggest, most beautiful house on the block. But bigger is not always better when it comes to houses. The largest house may only appeal to a very small audience and you never want to limit potential buyers when you re-sell. Your home is only going to go up in value as much as the other houses around you. If you pay R3 000 000 for a home and your neighbours pay R1 500 000 to R2 000 000, your appreciation may be limited.
Avoid Sleeper Costs The difference between renting and home ownership is the sleeper costs. Most people just focus on their bond repayment, but they also need to be aware of the other expenses such as property taxes, utilities and homeowner association levies. New homeowners also need to be prepared to pay for repairs, maintenance and potential property-tax increases. Make sure you budget for these sleeper costs.
You’re Buying a House – Not Dating It Buying a house based on emotions is just going to break your heart. If you fall in love with something, you might end up making some pretty bad financial decisions. There’s a big difference between your emotions and your instincts. Going with your instincts means that you recognize that you’re getting a great house for a good value. Going with your emotions is being obsessed with the paint colour or the backyard. It’s an investment, so stay calm and be wise.
Give Your House a Physical Would you buy a car without checking under the hood? Of course, you wouldn’t. Hire a home inspector. It could end up saving you thousands. A home inspector’s sole responsibility is to provide you with information so that you can decide whether or not to buy. If the inspector does find any issue with the home, you can use it as a bargaining tool.
The Secret Science Your opening offer should be based on two things: what you can afford and what you believe the property is worth. It should be fair and reasonable and not offend the seller. Look at what other homes have gone for in that neighbourhood. Sizing up a house on a price-per-square-metre basis is a great equalizer. Also, sellers respect a bid that is an oddball number and are more likely to take it more seriously. A nice round number sounds like every other bid out there. When you get more specific, the sellers will know you've given the offer careful thought.
Stalk the Neighbourhood Before you buy, get the lay of the land – pop past morning, noon and night. Many home buyers have become completely distraught because they thought they found the perfect home, only to find out the neighbourhood wasn’t for them. Do your regular commute from the house to make sure it is something you can deal with daily. Research the local schools - it is estimated this can affect the value of a home by as much as 20%.