TOP 7 THINGS FIRST TIME BUYERS SHOULD KNOW
Category Residential Property News
If you haven’t bought a property before, being unprepared can make the experience intimidating. Wise up on a few basics, and that knowledge will make it a wonderful experience.
At least half of bonds approved by home loan originators, OOBA, are to first time homeowners. That’s great news, because it means that young people and those who previously weren’t able to enter the property market, are doing so now.
Buying a property isn’t difficult…but as a first-time buyer, we’ve put together some hints and tips to make your buying experience that much better and easier.
1. Do you know what you want?
Think about it – the clearer you are in your mind, the easier it is.
A house, a flat, a unit in a complex, with a little garden?
How many bedrooms and bathrooms do you need?
Where, ideally, would you like the property to be? Near schooling/work/shops?
2. What can you afford?
If you need to borrow money – to get a home loan - go on line to OOBA, and find their affordability tool. You’ll be asked a few questions, and almost instantly, be told what you can afford – in other words, what home loan you are likely to be granted (as long as nothing changes between then and when you buy).
Being pre-approved for a home loan is a big plus – you know what price range you should be looking at, and the sellers know you can afford their home.
It’s also important to understand the other costs involved in buying a property: the transfer costs, whether there are rates and levies to be paid (monthly costs if you live in a block of flats or a complex), and what your bond repayments will be.
Make sure you know precisely what financial commitment you are in for every month. Your estate agent can help you with all that information – just ask.
3. What do you need to know about the property market?
Knowledge is power – the more you know, the more in control you are.
Do some homework – drive around the area you like, see what prices are being asked for properties. Just because the price is X, does not mean that the property sold for that. Find out what it sold for.
You need to get a feel for the property prices, and what you get for the price being asked.
Whatever you don’t understand, ask your estate agent – don’t feel uncomfortable.
You don’t have to buy the first property you see. In fact, it’s very seldom that anybody does. Visit properties, take note of what you like and what you don’t, share that information with your estate agent to help them find precisely what you want.
4. How important is the sales agreement?
In a property purchase, the sales agreement is everything. It’s everything to the seller, and to, you, the buyer. If anything goes wrong, everybody goes back to that agreement – whatever is written there, is what you and the seller agreed to.
The most important clauses are things like the purchase price; the deposit to be paid, and the date it must be paid to the conveyancer or agent’s trust account; whether you have applied for a home loan – how much time you are given for that loan to be granted; what does the sale include – in other words, the fittings, fixtures and anything else; what is the occupation date.
It’s wise to read that agreement from cover to cover. Make sure everything you want is written in there. It doesn’t matter if the agreement is boring to read, do it. No promises or verbal undertakings are of any use in this transaction, only what is written on that document. All the terms and conditions are written in there. If you don’t understand anything, ask your estate agent to explain it.
5. How do you know if the seller accepts your offer?
Your estate agent should let you know that the seller has signed the sales agreement inside the offer and acceptance period. If there are any counter offers from the seller, this should be communicated to you by the agent.
If you are buying a property subject to the sale of another one, OR subject to any other conditions (like raising a home loan), you have to meet that deadline date otherwise that sale agreement is null and void. Take those deadlines seriously.
6. Are you allowed to change your mind?
A sales agreement is a legal binding document. If you are not 100 percent sure that this is the property you want, do not sign that agreement. Only sign for the property you know you want, otherwise you can end up in a legal wrangle. You can’t just walk away.
7. What is the process after the seller has accepted your offer, and you have met all the conditions of the sale?
There is a process which has to take place, transferring that property from the seller’s name into yours. The conveyancing attorneys are responsible for this function, and you’ll be signing transfer documents with them, and they’re there to make sure that the transfer goes through smoothly.
They’ll let you know when the property is legally yours.
Author: Anne Schauffer
