First time home buyers: Your step by step guide to property ownership
Begin the first step towards owning your own home with confidence and understanding. This is what all first time buyers should understand.
Purchasing a property is a financial commitment,a investment and may feel stressful.With guidance and support, securing your first home can be easy and stress free
1. Determine your home loan affordability
Before starting to search for your ideal home, it is important to calculate your budget so you can understand what you can realistically afford on a home loan by getting pre-qualified
2. Plan and budget for additional costs
It is important to plan for both once off and ongoing costs when purchasing a property. A property purchase involves more than just the purchase price.
A deposit, transfer duty, conveyancing costs and the deeds office registration fee are the upfront expenses. You will need to budget for the day to day expenses of running a home.
Municipal rates and taxes, levies, utilities, home maintenance and other services such as garden service, pool maintenance and armed response are monthly commitments. It’s important to consider property insurance in the event of any damage or loss.
If a property is purchased within a complex (sectional title), an enquiry on special levies should be done. These charges are introduced for a short period of time to assist with funding major repairs or maintenance within the complex. By knowing these costs upfront,will help in understanding the costs of owning a home and help to plan your budget effectively.
3. Understand the property you're purchasing
You will view many properties before finally choosing one. Looking at the building’s condition is a must. Look out for any signs of mould or signs of dampness, cracks in the plaster or in the foundation and the roof’s structure. The location must also be assessed regarding safety and overall appeal,
Before you make an offer on a property, arrange for a professional to inspect the property for any defects or risks that could influence your purchasing decision or additional expenses in the future. Inspections usually cover:
- Signs of water leaks, water damage or dampness
- Wood decay or damage
- Plumbing defects, electrical or faulty gas installation
- Harmful materials such as asbestos, lead paint, or mould
- Structural concerns or foundation issues
By getting these issues resolved early helps you to make a well informed decision and unexpected repair costs are avoided once you move in.
4. Proceed confidently with your offer to purchase
It’s important to have all the necessary information on the property you’re interested in purchasing.When you have found a property that fits your budget and requirements, you can then go ahead with an offer to purchase (OTP). Remember to proceed carefully. Should you withdraw after signing can result in financial penalties and the costs involved will depend on the terms outlined in the contract.
5. Prepare and organise your documents in advance
When the seller accepts your offer, the next step is to complete a home loan application. By having all your supporting documents prepared in advance, you will speed up the approval process. For a smooth bond application, use a clear document checklist.
