The numbers that homebuyers need to know
In many ways, buying a new home is a “numbers game” – and the most important of those numbers is undoubtedly how much you can afford to spend. This differs for everyone and your best option is to seek help from a reputable mortgage originator like us and obtain a home loan pre-qualification. This will be based on your earnings, credit record and current debt load, and should give you a really good idea of your home price range.
Another very important number you must know is how much your ideal home would cost you every month – in total. When budgeting for this, you should include things such as:
- Property rates
- Municipal service charges
- Any levies payable
- Your monthly bond instalment.
Deposit and transaction costs
Next, you need to establish how much cash you would need to pay a deposit (if required), plus transaction costs such as bond registration charges, legal fees and transfer duty (if applicable). This can amount to quite a considerable sum and you may need to delay your home purchase for a while so that you can boost your savings to accommodate these costs.
How long do you plan to stay?
The fourth number you need to have in your head is how many years you plan to live in your new home. Experts advise that in most cases, it really only makes sense to consider buying if you are planning to stay put for at least five years or, preferably, longer. The reason is that if you’re going to sell again relatively soon, chances are you will not make a good return and you could even end up losing money, especially because property transaction costs are so high (even for sellers).
Fifth, you should know that 90% of all buyers today begin their house-hunt online, simply because it is the quickest and easiest way to get to know more about the areas you’re considering. You’re also able to see the types of homes on offer in your chosen area and do some serious comparative shopping. What’s more, you can search for information about local schools, transport services and community organisations – all without leaving your home or office.
How long has it been on the market?
Then finally, you should make it your business to find out how long the homes you are interested in have been on the market. Knowing this number can help you gauge whether or not other buyers believe the property may be overpriced or needs too much work. However, it is important to note that not all properties that have been on the market for a while should be crossed off your list immediately. Some may in fact have owners that are quite ready to negotiate a lower price – you simply need to ask. On the other hand, some homes may actually only need minor renovations to become your dream home for years to come.