When you buy a home you are not just buying bricks and mortar or a roof over your head. You are also buying your future.
“Where you choose to live will determine who you make friends with, how you entertain, where your children go to school, where you shop and go to gym, how hard you have to work, and probably even what your finances will look like in five, 10 and 20 years’ time,” notes Gerhard Kotzé, MD of the RealNet estate agency group.
“So it is very important to keep a cool head when making your choice and avoid the serious miscalculations that can easily occur if you are too emotional about the decision.”
For example, he says, it’s a big mistake to get hooked on a home you can’t afford. Dreaming about how great your life would be if you could only have the designer kitchen, solid wood floors or great pool patio that a particular property offers can easily tempt you to go over-budget on your purchase – or lead to you looking at other options with disappointment and perhaps missing out on the home that is actually perfect for you.
“So we suggest that you start your search at the low end of your price range and work your way up. This way, there is a good chance that you will find a home that has everything on your must-have list long before you reach your affordability ceiling. It is worth remembering that at the current core home loan interest rate of 10,5%, spending an extra R50 000 on your home will not only add R500 a month to your bond repayment, but add about R120 000 to the total cost of the property over 20 years.”
On the other hand, says Kotzé, it’s a mistake to get desperate if you have been house-hunting for a while without finding anything you really like. If you aren’t careful, this could result in you deciding to “settle” for something you actually don’t like much – or even worse, being tempted to overlook serious problems that will be difficult and expensive to fix.
“Buyers need to remember that doing nothing for a while is also an option. New homes come on to the market every day so there is no need to get stuck with one you hate. If you do, the chances are that you will just end up moving again, with all the expense that entails, or making costly and disruptive alterations and additions to get it the way you wanted it in the first place.”
“Similarly, if it turns out that there are snags with a home that you do like – major repair issues that were not obvious at first, an inflexible asking price or a difficult possession date – you should consider moving on. Being open to keep looking can help you regain perspective and save you from making rash decisions you might really regret later.”
He says another common mistake that many buyers make, especially when looking at charming older homes, is over-estimating their DIY skills. “You might love the idea of buying a fixer-upper in order to secure your place in a pricey area, but before you go ahead you need to be seriously realistic about how much home improvement you can handle in terms of time, money or ability. If you bite off more than you can chew and end up having to hire contractors to finish the work, the chances are that it will either wreck your budget or seriously try your patience as the project drags on and on due to limited finances.”
“In addition, you should never let your heart rule your head to such an extent that you rush into making an offer before you’ve taken some other important steps, like checking whether the area is safe at night, what the traffic is like and how long it would take you to drive to work or school. You should also make it your business to find out what other buyers have recently paid for similar homes in the area”, says Kotzé.
“Remember that even if there are other buyers interested in the property you like, you shouldn’t ever offer more than market value – unless you want to have trouble getting a home loan, or risk making a much lower profit than you should when you resell. Just as it is important to ensure that your expectations are in line with your budget, it is vital to stick to that budget and protect your financial future.”