Article Categories
10 Steps to Buying Your First Home
- By Elizabeth McLachlan
- Published 10/7/2009
- General
Elizabeth McLachlan
Elizabeth works for an online real estate portal called SAHometraders which specializes in selling property in all areas of South Africa including Bergvliet property, Wynberg property and Newlands property.
View all articles by Elizabeth McLachlan
Property is the single most expensive purchase you will ever make. The process of buying your first property, whether it is a bachelor’s flat, apartment of family home, can be one of the most daunting but also the most rewarding experience of you life. Remember that there are a lot of experts out there waiting to assist you in the crucial steps of buying your first property.
1. Calculate Your Budget
The first step to buying a home is to find out how much home you can afford. Review your monthly income, expenses and savings. Always remember that as a first time buyer you would need a substantial amount of cash in hand to settle closing costs and deposit. Your budget should also leave room for insurance as well as other sudden expenses like an increase in interest rates.
2. Get Pre-Approved
Having a pre-approved loan basically means your credit files have been reviewed and the loan officers believes you can readily qualify for a given loan amount with one or more mortgage providers. A letter will be given to you showing your borrowing power, which can be used to show agents or sellers that you are a serious buyer. Getting your loan pre-approved can save you a lot of time and is worth the effort.
3. Do Research
Once you have chosen an area that seems right for you, you can start doing the necessary research. Find out what the average houses price is in the area and what the sales activity has been like for the last year. Make sure you can identify with the community in the area. It is better to go see the area in person, for you might miss crucial information should you do research on the Internet. Also be sure to view the property during the day and the night and ask around the neighborhood about crime levels.
4. Find an Agent
There is no shortage when it comes to estate agents in most parts of the world. The more popular or sought after an area is, the more agents you will find. It is important to find someone you trust and who you feel comfortable with. The right agent can save you a lot of time and money so be sure to choose wisely. Set up some interviews with potential agents and find out about their experience and reputation.
5. Make an Offer
So you’ve done your research and you found an agent who helped you find the home of your dreams. It is time to make an offer: Use your research to determine if you have yourself a good deal and should you think that the asking price is to high, be prepared to defend it with your research. This is a crucial part of the home buying process and you shouldn’t let anyone push you into making a decision.
6. Negotiate the Best Price
A seller can respond in different ways to your offer. He/She can accept your offer, counter bid or go back to the asking price. Don’t give in to easy and if it seems to good to be true, you must trust that the inspection will show you the hidden problems. Once you’ve agreed on a price it is time to sign the contract. You might have to put down a deposit – in which case you must make sure the contract states that you can get the money back when you withdraw your offer.
7. Get an Inspection
Let you agent recommend a trustworthy inspector. If there are any repairs to be made, remember to get the inspector in again once the amendments have been made. Don’t try to cut corners on this step – it might be very costly.
8. Close the Deal
This is the most exciting part of the process is probably when the key to the house gets handed to you. Lots of paperwork needs to be done but your agent will guide your through the process. Have a bottle of champagne ready!
9. Move In
You are now ready to move into your first home. Get a trustworthy moving company and make sure to do the necessary cleaning before the moving truck arrives. Thorough planning will make this an easy and exciting day.
10. Manage your Investment
Your house is your investment and you need to guard it with your live. You would be wise to get fire, theft and liability insurance. It is wise to upgrade your house by putting in a pool or adding a room, but always make sure you speak to the experts before you make any decisions.
Buying your first property is a huge step for any home buyer. Be financially prepared, do thorough research and find the best agent in the area, and this experience might just be the most exciting of your life.
1. Calculate Your Budget
The first step to buying a home is to find out how much home you can afford. Review your monthly income, expenses and savings. Always remember that as a first time buyer you would need a substantial amount of cash in hand to settle closing costs and deposit. Your budget should also leave room for insurance as well as other sudden expenses like an increase in interest rates.
2. Get Pre-Approved
Having a pre-approved loan basically means your credit files have been reviewed and the loan officers believes you can readily qualify for a given loan amount with one or more mortgage providers. A letter will be given to you showing your borrowing power, which can be used to show agents or sellers that you are a serious buyer. Getting your loan pre-approved can save you a lot of time and is worth the effort.
3. Do Research
Once you have chosen an area that seems right for you, you can start doing the necessary research. Find out what the average houses price is in the area and what the sales activity has been like for the last year. Make sure you can identify with the community in the area. It is better to go see the area in person, for you might miss crucial information should you do research on the Internet. Also be sure to view the property during the day and the night and ask around the neighborhood about crime levels.
4. Find an Agent
There is no shortage when it comes to estate agents in most parts of the world. The more popular or sought after an area is, the more agents you will find. It is important to find someone you trust and who you feel comfortable with. The right agent can save you a lot of time and money so be sure to choose wisely. Set up some interviews with potential agents and find out about their experience and reputation.
5. Make an Offer
So you’ve done your research and you found an agent who helped you find the home of your dreams. It is time to make an offer: Use your research to determine if you have yourself a good deal and should you think that the asking price is to high, be prepared to defend it with your research. This is a crucial part of the home buying process and you shouldn’t let anyone push you into making a decision.
6. Negotiate the Best Price
A seller can respond in different ways to your offer. He/She can accept your offer, counter bid or go back to the asking price. Don’t give in to easy and if it seems to good to be true, you must trust that the inspection will show you the hidden problems. Once you’ve agreed on a price it is time to sign the contract. You might have to put down a deposit – in which case you must make sure the contract states that you can get the money back when you withdraw your offer.
7. Get an Inspection
Let you agent recommend a trustworthy inspector. If there are any repairs to be made, remember to get the inspector in again once the amendments have been made. Don’t try to cut corners on this step – it might be very costly.
8. Close the Deal
This is the most exciting part of the process is probably when the key to the house gets handed to you. Lots of paperwork needs to be done but your agent will guide your through the process. Have a bottle of champagne ready!
9. Move In
You are now ready to move into your first home. Get a trustworthy moving company and make sure to do the necessary cleaning before the moving truck arrives. Thorough planning will make this an easy and exciting day.
10. Manage your Investment
Your house is your investment and you need to guard it with your live. You would be wise to get fire, theft and liability insurance. It is wise to upgrade your house by putting in a pool or adding a room, but always make sure you speak to the experts before you make any decisions.
Buying your first property is a huge step for any home buyer. Be financially prepared, do thorough research and find the best agent in the area, and this experience might just be the most exciting of your life.
