Archive | February 2015

More good reasons to save a deposit

shutterstock_135403982Most home buyers are aware that coming to the negotiation table with a sizeable percentage of the purchase price as a deposit will give them a considerable advantage over other potential buyers.

And this is especially true in the current market, where stock is in short supply and many sellers are receiving multiple offers to purchase, because given the choice, sellers will almost always choose the offer from the buyer with the biggest deposit.

This is partly psychological, in that the buyer who is prepared to put a large sum of their own money into the transaction looks more serious, and partly practical, because such buyers are usually also those whose financial affairs are in good order and who have already be pre-approved for a home loan.

Over the past few years, the banks have also gone to great lengths to explain how paying a deposit can also shorten the repayment term of your home loan and save you many thousands of rands worth of interest, and how it can help you deal with future interest rate increases.

However, there are even more good reasons to save up 10% or 20% of the purchase price before you go house hunting. These include:

Protecting your investment if you lose your job.
A deposit of 20% results in a much smaller minimum monthly mortgage payment from the outset, and possibly even a preferential interest rate on your home loan. This means that if you lose your job or are unable to work for a while, you and your family will have a much better chance of being able to keep up your bond instalments until your situation improves.

Being able to afford major improvements.
Your Home Owner’s Insurance (HOC) will obviously cover any repairs needed after a fire, flood or other such events, but what if you suddenly need to build an addition to accommodate an ageing parent, or decide to convert to solar power to avoid load shedding? If you originally paid a 20% deposit and your home has increased in value in the meanwhile, you should be able to access the cost of such improvements from your home loan account, instead of having to take out a personal loan at a much higher interest rate.

Being able to cope with major life events.
Paying a large deposit and having equity in your home from the start puts you in a much better position to cope financially if someone in your family has a major accident or gets seriously ill. Such equity, built up over the years of home ownership, is sometimes also used for debt consolidation and quite often, to give a child a university education that would not otherwise have been possible.

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Knowledge is still power

shutterstock_250897573Even though the huge majority of property buyers now begin their search for a new home on the Internet, a strong web presence is surprisingly not the first thing on sellers’ minds when awarding a marketing mandate.

That’s the finding of a recent survey by Rightmove.com, the UK’s top property website. This poll revealed that in fact, sellers are most likely to pick an agent who can demonstrate good knowledge of the local area and current market conditions ahead of anyone else.

Indeed, it revealed that for 74% of sellers, local knowledge is the most important thing they look for when shortlisting an agent. This was the clear leader in spite of the survey giving sellers the ability to state more than one answer.

Also of major significance was the agency’s visibility or brand (41%), the agent’s expertise (28%) and the range of services the agency/ agent is able to offer (28%) – such as access to a mortgage originator.

The research was conducted by Rightmove as part of a campaign to help agents that use its listings portal to differentiate themselves from their competitors and ultimately win more mandates.

The company’s commercial director Miles Shipside says: “Agents need to know which parts of their service offering are most important to sellers and landlords when they’re trying to win mandates, so that they can communicate these to potential clients.”

In the rental market, a separate Rightmove survey found that staff expertise is the most important factor (97%) for landlords who are choosing an agency to manage their properties. This was followed by a recommendation from another landlord (94%), and the fees the agency charges (94%).

To Build or To Buy?

Couple with House

Living in your dream home is easy – getting to that point can often be a little harder. That’s why BetterBond is here to help you out. One of the biggest questions facing prospective home owners is whether it’s better to build a home, or to buy one. Here are a few points to consider if you’re having to make this decision:

What are your requirements?

Are you a first-home buyer, or a well-seasoned property owner? If it’s your first house, or you’re still relatively young, rather buy a house than build one. That way, you’ll have time to figure out what you like in a home, and if your needs or tastes change (if you start a family, or get a pet, for example) you’ll still be able to move. If you have a steady, reliable lifestyle that won’t require you to move anywhere else or change your routines anytime soon, then by all means build your castle in the clouds.

Do you know what you want?

Building is the way to go if you know what you want, and are willing to push through the process to build the home you’ve been wishing for. It does, however, involve a lot of different aspects. Do you have land, or do you still need to buy land? Are you going to buy the home in cash, or will you need a homeloan originator, like BetterBond, to assist you with the purchase of your plot? Also, open plots are often only available in less-developed areas, so you’ll have to be able to confidently predict that the area is going to grow according to your preferences and requirements. This also means that open land is often quite far from schools and places of work, so be sure that your daily travelling time won’t be a hassle.

How much time do you have?

Another aspect to consider is your time. Time, we know, is precious. Building often requires loads of hands-on presence, especially if you’re an owner-builder, and don’t specifically have a builder contracted to you. You also need to know exactly what you want, down to every last detail – and this is where it gets expensive. Not knowing what you want often means you’ll go to other people who can help, like architects, decorators and designers. It’s great to have a team, but that translates into a team pay-roll, too. Many home-builders also easily go way over their initial budget because they don’t sweat the small stuff – light fittings, décor, doorknobs, and so on seem like small expenses, but at the end of the day, a million small expenses can become one very big expense.

Finding your spot can be tricky, but it doesn’t need to be. Whether you need an architect, bond or one of our partner estate agents, BetterBond is just a phone call away. Use our Bond Calculator to see what we can do for you, or get in touch with one of our friendly agents. ‘Home, sweet home’ has never been so simple!

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