The first four questions every buyer should ask

Purchasing a property can be a rather complex process, not to mention the fact that it will likely be the largest financial investment that most people make, says Adrian Goslett, CEO of RE/MAX of Southern Africa. It is for this reason that he advises buyers to take their time when deciding to buy a home and systematically work through the process by asking themselves a few vital questions, along with seeking the counsel of a reputable real estate professional.

“Stepping back and taking the time to answer some key questions will help to alleviate some of the emotional stress and assist buyers to successfully navigate the home buying process. The answer to each of the questions will provide the buyer with some guidance and will form an essential part of making a well-thought-out, informed decision,” says Goslett.

According to Goslett, the key questions are:

Location - where do I want to live?

Goslett says that aside from the fact that location weighs heavily on a property’s potential return on investment, this question is more related to where the buyer would actually like to live. Buying a property should be regarded as a long-term investment, so it’s vital that the buyer purchases a home in an area they can see themselves in for at least ten years.

“Online property search portals are an excellent source of information for buyers that enables them to narrow down a location and type of property they would like to stay in. These sites also provide a list of amenities in the area as well as the price range of property in a particular suburb.  Depending on the buyer’s life stage and future plans, certain aspects will carry more weight than others during the decision-making process. These elements could include proximity to schools, medical facilities or entertainment nodes, along with the distance to their place of work. All of these factors will have a bearing on the decision and will help the buyer to eliminate certain areas and streamline the process right off the bat,” explains Goslett. “Once the search has been narrowed down, the buyer should then take a drive out to the areas they have selected to get a feel for the neighbourhood and the people that live there.”

Savings - how much do I need?

According to statistics, more than half the number of buyers who require finance will need to put down a deposit in order to secure a bond with a lender. On average, the required deposit for repeat buyers is around 20%, while first-time buyers are generally asked for about 12% of the purchase price. “Determining the monetary value of the deposit needed will be dictated by the buyer’s affordability and the purchase price of the property,” adds Goslett.

He notes that buyers also need to bear in mind that the deposit is not the only expense that they will need to save for. There are also additional costs associated with a property purchase that a buyer will need to set aside money for. These include transfer costs, moving costs, home repairs, renovations, and planned upgrades among others.

Monthly repayments - what can you afford to spend?

Goslett says that a bond repayment is not the only monthly expense that buyers need to consider when it comes to determining what they can afford on a monthly basis. “Homeowners often find themselves in financial distress because they have only taken into account the monthly bond repayment and not the other expenses that they will incur through owning a property. Consulting with a reputable mortgage originator will provide the buyer with some valuable insight as they will be able to work out the total cost of the bond, which would include the repayment, interest, and homeowner’s insurance,” says Goslett, who notes that other expenses to be considered include:

• Electricity and water
• Rates and taxes
• Levies (sectional title unit)
• Homeowners association fee if applicable
• Home maintenance

Estate agent - how do I choose who to work with?

After the buyer has answered the other questions and is happy to move forward with the process, the next step is to select a real estate agent to work with. “The best agent to use is one that specialises in the areas that the buyer is interested in. They will have a working knowledge of the area and a network of sellers and homes that are available in that particular area. It is vital that the buyer chooses an agent who has the qualities they are looking for such as honesty, integrity, and experience. However, most importantly the buyer needs to feel comfortable with the agent,” advises Goslett.

A reputable real estate professional will be able to provide the buyer with much-needed guidance and ensure that the home buying experience is far less stressful, provided the buyer and agent can communicate openly and understand each other. “If the relationship between the buyer and their agent is good and there is a level of trust between them, the property buying process will generally be a lot smoother,” Goslett concludes.