Agents have tips for potential buyers to help them avoid making mistakes when it comes to buying a home for the first time.
Beginning the search for a home for the first time is a thrilling experience but it can become overwhelming, especially as you do not want to make a mistake with such an important investment.
Knowing which properties to view, as well as how many to view, is key to helping you narrow down your choices. But once you have selected your favourites, how do you know which property to offer on?
Read the latest Property360 digital magazine below
Russell Pearson, chief executive of Re/Max Address, and Carlo Mariani, founder of The Property Coach, share their insights to help you make the right choice when buying your first home:
Where to start
Before doing anything else, Mariani advises buyers to know their credit score. Is it above 620? What can you do to improve it quickly? What is your range of affordability?
“Get pre-qualified and start the purchasing process like a pro. Sellers and agents will also be more willing to work with you.”
Buyers need to be seriously ready to buy, Pearson says.
“The bottom line is that a top agent will get down to the needs and wants of any buyer within their specific budget.
However, if the buyer is not motivated to buy right now, not even the most dedicated or experienced agent can assist, and this would be the time to part ways until such time as the potential buyer is ready and able to buy.”
Deciding on which properties to view
Once this groundwork is done, the first step in the house hunting process is to establish a buyer’s needs and then correctly qualify them financially, he notes. “This is key and it then becomes straightforward to narrow down choices to view.”
Mariani adds that buyers should look at properties that are 10% more and 10% less expensive than their target purchase price in order to get a better idea of how much difference there is between properties.
Is it possible to view too many or too few properties?
The answer to both is yes, Pearson says. “We get buyers who are undecided and just want to keep viewing, and then others, who can make up their minds very quickly.
An experienced and quality agent can normally get things narrowed down quite quickly by asking qualifying questions.”
The general rule, says Mariani, is to see more properties than fewer, especially at the start of the buying process.
He also advises buyers to “start window shopping as early as possible – at least three, but preferably six, months before you actually want to buy”.
Choosing the right home from your finalists
Pearson says a qualified agent will be able to advise buyers of the benefits and/or disadvantages when comparing homes.
“So, a professional agent with a great track record of sales in the area will be able to present buyers with comparative market values, not only on current homes for sale, but historical ones too.
Making the offer
A buyer should never pay more than market value, even if they love the place, Mariani says. This is because banks are unlikely to finance a property bought above market value. Once they have decided to make the offer, they need to be serious about it.
“And make it in writing. Keep its validity for no longer than 24 hours. Agents are always in contact with their sellers,” he says.
Dealing with a rejected offer
If a buyer puts in an offer for their dream home and it is rejected or the sale falls through, they should “keep with it and not give up hope”, Pearson says.
“A good agent will keep in touch and find you the home of your dreams. Top agents also list properties in their area and have built up a great referral system with their sellers.”
Mariani points out that offers are rejected all the time. “Breathe and do not counter-offer for at least three days but preferably wait for seven days. Give the seller some time to reconsider, or fear that the deal is gone for them too, and then see them becoming a lot more willing to negotiate.”
Should I put in an offer for my second choice or another of my options?
No, Mariani says. “Don’t compromise on what is often the most important investment of your life. Another property, in the right area, at the right price will be there for you, if you are prepared to be thorough and patient.”
However, if a buyer needs to buy urgently Pearson says they could consider putting in an offer on one of the other properties they like. Alternatively, they could wait for more properties to come on to the market.
Good buying advice
Mariani strongly recommends that buyers get a professional to inspect the property they are purchasing, especially is it is a free-standing home.
“The last thing you want is unplanned maintenance soon after you purchased the property, especially at a time you might be a bit financially stretched after paying all the transfer and bond registration costs.”
If a buyer is ready to buy, they should remember that homeownership comes with a number of additional costs compared to being a tenant. They need to budget for costs like sectional title levies, municipal rates, property insurance and maintenance.
“The temptation to over-spend is often big but rather start small and dream big.”