In today’s property market, buyers who are looking to purchase a home – whether to upgrade, downsize or simply enter the market for the first time – need to have a well thought out strategy and game plan.
“It is challenging to achieve a goal without having a clear idea of what it is you want and where you would like see yourself in the future,” says Adrian Goslett, CEO of RE/MAX of Southern Africa.
He offers potential home buyers a few tips to keep in mind when looking to purchase a property in the current competitive market environment:
Assess your needs and have realistic expectations
Goslett says that before buyers even start looking at properties, they need to know what it is they need. “This is the reality check of the buying process. It could take a bit of time and planning, but it is important to sit down either alone or with the other family members who will be living in the home to decide exactly what the essentials are and what can be compromised on. Make a list for consideration of all the things that the new home should have, such as the number of bedrooms, size of the garden, location or proximity to your work or children’s school.”
He says that once a buyer has a clear outline of what they are looking for, they should look at what has sold over the past six months that fits their requirements. That will provide a guideline to what they can expect to pay for a home that meets their criteria. If the price range is above what the buyer can afford, it might mean waiting or reassessing the list of requirements. “An estate agent working in the area in which the buyer is interested in purchasing, will be able to provide them with average house prices and all the necessary information regarding the property for sale in the area that will fit their needs,” says Goslett.
Get home loan pre-approval
Getting pre-approved means that a bank, bond originator or financial institution has given the buyer an amount that they are willing to finance based on the information that the buyer has provided, explains Goslett. “During the pre-qualification process a full credit assessment and risk analysis will be performed on the buyer’s financial credentials. Once complete, the bank or bond originator will provide the buyer with a pre-approval certificate, which holds more weight in property negotiations and can speed up the process.”
The pre-approval certificate will cite the bond amount, along with the interest rate on the loan and the monthly repayment amount. Goslett says that it is important to note that the final approval may be subject to a number of factors such as the bank’s property valuation and a signed offer to purchase.
For pre-approval buyers will require the following documentation:
· Latest payslip
· Proof of identification
· Three months’ bank statements
· Other relevant documentation will depend on the financial institution
Make a fair, market-related offer
According to Goslett, market conditions currently tend to weigh in the seller’s favour with inventory of property in short supply.
“A year ago buyers could have got away with putting in a cheeky offer, but we are seeing a shift in the market and sellers are not accepting offers that they do not see as fair and market related.”
He says today there are more and more buyers wanting to purchase property, with fewer properties available making it an extremely competitive environment. “Buyers who make offers below market value will more than likely not get the property. Buyers need to present a fair offer that is within their price range, providing some negotiation room on both ends.”
He says bearing these tips in mind will provide buyers with an excellent guideline to ensure they can successfully navigate the property market and find the right home to meet their needs.