You might know more than you think
Buying a first home is intimidating, so it can help to think of the process in more familiar terms – such as a game of Monopoly, says Adrian Goslett, regional director and chief executive of Re/Max of Southern Africa.
By doing so, first-time buyers might realise they understand more about the concept than they think.
The first issue is how difficult it can be to get hold of enough cash to purchase the property.
“In the board game, you have to throw just the right number to land on the right block and collect some extra cash. It can feel the same way when applying for a home loan. You need just the right credit score and monthly income to qualify for a loan.”
“The second lesson is that it can take a long time to save up before we can afford to buy anything. We have to keep going around and around the board until we eventually hit enough pay days to afford the property. This is much the same in real life – except that in real life, wealth is accumulated over time rather than handed to you at the start of the game.”
Goslett says the game also teaches buyers that utilities can be a lot more expensive than expected.
“We all had that one friend who would purchase the utility card as soon as he landed on it. Everyone always felt sorry for this guy until they landed on his block and it was their turn to roll the dice to find out how much they owed him.
“Most first-time buyers forget to factor things such as utility bills, rates, taxes and special levies into their budget.
“I would recommend finding out what these things cost before going ahead with the offer to purchase.”
The last and probably most important lesson the game of Monopoly teaches is that location is everything.
“If you purchased on the wrong spot on the board, it doesn’t matter how many hotels you add, you simply won’t be able to beat the player who bought the most expensive and best located lot on the board.
“Similarly, if you purchase a property in the wrong suburb, you will struggle to make a good return on investment when you later decide to sell.”
Goslett says this is why it is important to work through an professional estate agent who can be trusted.
“They can advise you on which areas are better avoided and which are more likely to generate higher returns.”