Key tips for first-time property buyers in South Africa
Purchasing property in South Africa is a significant milestone and one of the largest financial commitments that many South Africans will make. For first-time buyers, the process can be daunting, especially when navigating an unfamiliar market with fluctuating interest rates and economic uncertainties. Taking a proactive and informed approach is crucial to securing a sound investment and avoiding common pitfalls, says Antonie Goosen, founder and principal of Meridian Realty.
“Understanding the local market before diving in is essential,” Goosen advises, emphasising that buyers should start by researching property prices and trends in their desired areas. "Familiarising yourself with the market is key. This means tracking prices in your preferred neighbourhoods to develop a sense of what is realistic within your budget.”
Keeping a close watch on pricing trends and shifts over a few months can help first-time buyers build a reliable knowledge base, equipping them to spot fair deals and avoid overpaying in a competitive market.
Financial readiness is another fundamental aspect of property purchasing, especially for those entering the market for the first time. Goosen highlights the importance of maintaining a strong credit profile, as this can be pivotal in securing favourable loan terms. A solid credit record can help lower interest rates and ultimately save buyers a substantial amount over the lifetime of the loan. “One of the biggest hurdles for new buyers is financing, especially in today’s economy,” he notes. “Banks want to see stability, so maintaining a good credit score and showing proof of steady income are essential steps. Even a modest deposit can improve the loan conditions you receive and increase your negotiating power.”
Another critical area that first-time buyers often overlook is the range of additional costs beyond the purchase price. “These additional costs, such as transfer duties, legal fees, and bond registration costs, can place unexpected strain on your budget if unaccounted for,” Goosen cautions. For a smooth purchasing process, it’s essential to budget for these expenses ahead of time, as they can significantly affect cash flow, especially during the early stages of homeownership.
He also recommends that buyers take a long-term perspective, considering how both the property and the location may evolve over the years. This approach is essential not only to meet current lifestyle needs but also to maximise future property value. “Think about the long-term benefits of the area. Are there upcoming infrastructure projects? What about schools and shopping centres? Buying property is usually a 10- to 20-year investment, so it’s essential to think beyond the present,” he explains. “A property’s location and neighbourhood development plans can substantially impact property value appreciation over time, making it worth the extra research.”
In addition, Goosen advises that buyers reflect on their long-term goals. Is the property meant to be a stepping stone to larger investments, or is it intended as a forever home? Being clear on these goals will help buyers choose properties that align with their future aspirations. If a buyer is planning to grow a family, for instance, a property with enough room for expansion or located near good schools could be a priority.
Investing in property is a step towards long-term financial security, but to make the most of this investment, first-time buyers should approach the process with preparedness and foresight. By taking the time to research, plan finances carefully, and consider long-term goals, buyers can enter the South African property market with confidence and ensure their investment will serve them well for years to come.
In an article published on 9 Oct 2023 Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, shared: “Buying a home is one of the biggest purchases a person can make, so you want to be sure to make the right choices throughout this process".
Here to help make this process a little easier, RE/MAX of Southern Africa shares their top three practical tips for house hunters:
1. Be open to compromising
No home is ever going to be 100% perfect. Being willing to compromise is essential – especially for first-time buyers who are still learning what their money will actually afford them within the current market. Compromise is also an important aspect for couples who have differing ideas on what the house needs to offer. Being able to agree on the essential must-haves versus want-to-haves in a home is a crucial first step before starting the house hunting process. Keep the list of must-have items short and realistic and be open to compromise on any item that falls under the ‘want-to-have’ list.
2. Give every home a fair chance
Making viewing appointments for multiple properties is a must for anyone who is house hunting. Not only will this help buyers narrow down their search criteria, but you might just be surprised by how much you like the property once you see it in person. It often takes walking through a home to realize the property’s full potential. Apart from this, considering multiple properties can help to avoid getting overly attached to one particular house – you can never be certain that your offer will be accepted, so it is a good idea to keep your options open.
3.Work with a real estate professional
Listing portals make house hunting much more accessible to buyers, but you are losing out on so much value if you fail to involve a real estate agent right from the very beginning. Not only will a real estate agent bring a wealth of local knowledge, real estate expertise, and negotiation skills to a transaction, but they are also likely to be privy to new listings before they even hit the market. The best part about this is that their services are completely free for buyers!
Embarking on the journey of finding the perfect home can be an exciting process, especially when you have the right support and guidance at your side. “From setting realistic search criteria to thoroughly exploring all options, the key to success lies in working with an experienced RE/MAX professional who can help you carefully plan and make informed decisions. Armed with these practical tips, your house hunting can become a stress-free, rewarding experience,” says Goslett.
Original Article: https://www.property24.com/articles/key-tips-for-first-time-property-buyers-in-south-africa/32449
