Elaine Chetty, Licensee of Seeff Richards Bay, heads a team whose average age is 32 years and recently received the prestigious Seeff Chairman’s Award for KZN from Samuel Seeff. She has learned a great deal since buying her own first home 18 years ago, and provides her road map to the 10 typical steps involved in buying a home.
She says: “Wouldn’t it be great if buying a home were as simple as it is in a game of Monopoly? All you’d have to do is find a desirable neighbourhood, hand the bank a few bucks, and you’d receive a house. Of course, the home-buying process is a bit more complicated in real life, and in many markets competition among buyers has become intense. So if you’re serious about home ownership, you’d better get your act together!”
Choose an agent
The first step in the home-buying process is to find an agent you feel comfortable working with on what is likely to be the largest financial decision of your life. Ask friends and family members for referrals, and interview several real estate agents. Choose an agent who communicates, has your best interests at heart, and puts you first
Find a lender
Once you’ve chosen a real estate agent who you trust to be your advocate, ask him or her to recommend lenders: an organisation or a person who will lend you money so you can buy your home. A local agent has experience working with mortgage brokers and banks and can recommend lenders. Choosing someone to handle the financial part of the home-buying process can feel like a scary step, but choosing a lender that is competitive on rates, communicative and available is key.
Clean up your credit
Now that you have a great lender, you can ask for guidance on any Credit Score issues you may be facing. Whether it’s a small or a large problem, the lender can provide guidance to help repair your situation and get approval for a loan.
Apply for mortgage pre-approval
A lender will help you to determine exactly what you can afford – and therefore which houses you should be considering. To arrive at a purchase price you need to factor in expenses like homeowner’s insurance, transfer and bond costs and utilities, to make sure that you can comfortably make your bond payments. The lender will then identify the total amount of money that they are willing to lend you.
Having a pre-approval letter in hand when you are ready to purchase a home adds strength to your offer, which can be an important advantage in a competitive home-buying market.
Create a home wish list
Once you know what your purchasing power is, talk with your real estate agent about your ideal home. Come up with a few ‘musts’ – as well as ‘wants’ that you’d ultimately be willing to compromise on. Think bigger than just the colour of the kitchen or the floor plan. For instance, do you want to be within walking distance of shopping outlets? Do you want space between you and your neighbours? Or is proximity to a good school the most important factor?
Search the listings
Now comes the fun part: searching for homes, with your agent, that meet your parameters. When you begin touring homes that are on your short list, take along a notepad and jot down your thoughts as you approach each home. Can you imagine yourself living there? Make note of what you like (or don’t!) about each home.
Do your due diligence
The due diligence process usually includes you walking through a prospective property to make sure you haven’t missed any hidden problems. Your agent should guide you here as well. If issues are found, negotiate for the current owner to fix them or take the cost of repair into consideration when making an offer.
Make an offer
Your real estate agent will walk you through the steps required to make an offer on a home in your area that meets your requirements. Expect some negotiation, and discuss a competitive offer with your agent.
Get final mortgage approval
Once your Offer to Purchase is accepted, you’ll work with your lender to get final approval for your home purchase by the date specified for the closing. The lender may require a deposit, so make sure you know what funds will be expected. Don’t make any major purchases like that big-screen TV or ride-on lawnmower until after closing, especially if you’d be using credit, as that can affect your mortgage qualification.
Once all of the above steps are completed, you’ll be on your way to the closing table. Every transaction varies, but plan to sign a ton of paperwork. An attorney will guide you through the process. Lodgement at the Deeds Office is controlled by the Transferring attorney, and then registration takes place. This is when the deed to the home is transferred from the seller to the buyer. This entire process, from your offer being accepted to the property being registered onto your name, normally takes about 6-8 weeks, all going well.
Then you’ll officially be a home owner and receive the keys to your new home.