Buying a house? Here’s how to get the most out of your purchase

Everybody wants to buy a house at some point in their lives. It is arguably the biggest purchase one can make in their lifetime and requires a commitment that spans more than 20 years.

Often, first-time buyers end up spending more than they should because they are new to the process.

But if prospective buyers approach it smartly, it could be both exciting and financially rewarding.

Knowing exactly what to do, what to look out for and which pitfalls to avoid when buying a house could save you a few extra hundreds and even thousands during the home buying process.

“There may be a lot of paperwork, logistics and a fair amount of money involved in purchasing and insuring your home, but it’s absolutely worth it, especially if you do your homework and act wisely,” Budget Insurance spokesperson Susan Steward.

Budget Insurance and SA Home Loans have offered the following tips to maximise your savings.

Take the time to financially prepare

• Save, save, save: You will need a good deposit and cash flow to cover the purchase process and renovations. The purchase process includes transfer duty, attorney transfer and bond registration fees, and initiation fees.
• Check the insurance tick box: Make sure that you can afford insurance on the property – covering the bond, buildings insurance, home contents insurance and personal liability insurance.
• Service your debt well and improve your credit score: The better your credit score, the better your risk profile and the higher your chances of getting a competitive interest rate. Make sure all your accounts are up to date and paid regularly, check your credit score and address any problems before applying for a home loan.

The house-hunting process

• Location, location, location: Buying a house close to schools or your workplace will save fuel costs in commuting.
• Security check: Properties and suburbs with excellent security measures in place may result in a lower risk profile and better insurance premiums.
• Compare: Make sure that the same property isn’t listed elsewhere at a more competitive price.
• Negotiate: Don’t be shy during negotiations over the selling price and don’t be afraid to make a cheeky offer. If you use an agent, make sure that their commission is competitive, a lower commission could result in more flexibility on the selling price.
• Off-plan: Buying a home off-plan in a development saves on transfer fees.
• Below a million: Homes below R1 million are exempt from transfer duty, which allows you to channel more finances towards renovations or furniture purchases.

You found the perfect home, now what?

• Home loan shopping: Shop around and compare to make sure you’re getting the best deal with the lowest charges and best interest rates. Don’t assume your transactional bank will give you the best value for money.
• Invest in an inspection: The valuation done by the mortgage provider only checks that your offer on the property is a fair value. But an independent inspection will ensure the property has no faults that you might have missed e.g. subsidence, rising dampness, roof problems and retaining wall stability.
• Debt check: Make sure the property you’re buying has no outstanding rates, taxes or utilities as you will not be able to open up a new account until that is paid up.
• Use one attorney: The seller has the right to choose the transferring attorney, but you can negotiate with the seller so that the same attorney is used for transfer and registration, allowing you to negotiate a better fee for both services.

Moving into your new home

• Declutter your old home before moving: Having fewer things to move is a bonus, so get rid of things you don’t need before you move. Remember to remove these items from your insurance policy because it could save you a significant amount of cash.
• Repurpose: If there are things from your old home that you can easily repurpose and use in your new one, try to upcycle and reuse them to save.
• Goods in transit: Check if your insurer covers goods in transit and whether this option is also provided by your moving company. It will prevent doubling up on the cover and paying more than you should.
• Maintain to save: Maintaining your home is vital in order to retain its value and avoid expensive repairs. This also results in fewer insurance claims, which could positively impact your risk profile and your premiums, saving you even more. 

“When you tick all these boxes, you could end up with a couple of hundred rands to thousands back in your pocket, so being smart about home buying makes sense… and cents,” Steward concluded.

Compiled by Narissa Subramoney

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