Buying a house is a huge step in any person’s life, whether it your first home or your second or third. What matters is how carefully you consider all the important factors involved with buying a house.
In this article, we talk about what to consider when buying a house in South Africa and how staying focused on these factors can save you a lot of money in the near and far future.
Shopping for a house can be a lot of fun, it gives you the opportunity to imagine what your life would be like in a new environment.
Many people get caught up in the glamour of it all, easily forgetting about the financial factors to consider when buying a house.
Almost everything about a house has a price tag to it, whether you have to pay for it right now, or in a few years’ time.
Therefore, it’s important to be thorough when making the choice to buy a home.
The first choice you should make is which area you would like to live in. Think about the commute to and from work and school before you decide. You may also want to consider what kind of shopping centres are in the area you are interested in and whether or not they suit your needs.
Think of buying a home as a long-term investment. There is no financial gain in buying a home which you will want to sell and move out of in a few months’ time. Therefore, don’t buy a house unless you can see yourself living there for at least 5 years.
Avoid the “we will make do” mindset and look for a home that provides sufficient space for your needs. If you like to entertain, make sure the kitchen is big enough and there is enough space to host several guests at a time.
If you work from home, make sure there is a separate room that can be used as an office. If you like to grow your own vegetables, make sure there is enough garden space for a veggie patch. Determine these needs before you start house hunting, so you know what boxes need to be ticked before you start searching. This will save you a lot of time and effort.
Don’t waste your time by looking at properties that are not within your budget. Establish what you can afford and only search for houses that fall well within that number.
Many houses are fitted with impressive, modern, and often over-the-top features which may seem appealing to you. However, these shiny finishes may very well be a distraction from other issues in the house which can cost you a lot of money in the long run. Fancy taps are not going to compensate for a weak or sinking foundation. Pay attention to what matters.
Get a good idea of the average property price in the area you are looking to buy a house in. Doing this will help you establish if the home you are interested in is over or under priced. If the price does not fit the average price in the area, ask the agent to explain why. There may be some underlying issues that bring the price down, or some useful added extras which push the price up. Either way, knowledge is power.
Ask the agent how long the property you are interested in has been on the market. Sellers who are struggling to sell their home may be more open to negotiating the selling price. This can work hugely in your favour, so don’t be afraid to ask questions.
Even if you think you will qualify for a 100% loan, saving for a deposit will help reduce your monthly instalment period. The more deposit you put down, the less your monthly instalments will be.
Take advantage of mortgage originators who are bond experts there to find you the best possible deal. All you need to do is fill in the necessary paperwork and they do the rest.
Buying a home is not as straightforward as it may seem. There are many hidden costs involved with the process which include transfer fees, conveyancing fees, deposits for lights and water, levies, rates and taxes and deed registration fees to name a few.
Make sure you know about these before the time, and ensure they form part of your overall budget for buying a home.
There is a possibility that the seller will not accept your offer. This is a completely normal part of the buying/selling process. This gives you an opportunity to increase your offer if you can afford it, or it may be your chance to walk away and wait for something better and perhaps more affordable to come your way.
Never allow anyone to pressurize you into closing the sale. There is a lot to think about when buying a home and you have to make sure you think about it all before signing anything. Rushing into a sale can cost you a lot in the future in terms of money and regret. Take your time and be 100% sure.
All of the considerations discussed above will have a financial impact on you. Choosing finishes and features over structural integrity may cost you hundreds of thousands of rands to repair. Rushing into a purchase before you have properly thought things through can cost you millions.
Speaking to a financial advisor before buying a house and allowing them to help you with all the important financial aspects of buying property can save you a lot of money.
Our financial advisors in Johannesburg are experienced and equipped with all the knowledge necessary to make sure you save as much money as possible when you buy your home. In addition, we help keep the emotions at bay and can assist you with thinking logically about your decision.
Whether you are buying your first or 5th home, our financial advisors in Johannesburg can assist you with making a calculated decision about your purchase, with the main goal of saving you money in the present moment, as well as the near and far future.
For more information about our financial services, or to find out more about what to consider when buying a home in South Africa, please don’t hesitate to contact us.
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