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Monday, 12 October 2020 08:45

8 Things to Consider When Buying a Home

By Masuma Hassanali

A home is often one of the biggest financial investments you’ll make in your lifetime, if not the biggest one. It can be a tedious process especially if you don’t have a starting point, so we’re here to help you with our top 8 tips for when you decide to make a move.

South Park, Mombasa Road

Buy for The Long Term

A property purchase is a significant investment, not to mention an anchor for financial stability. So, when thinking of which property to buy, consider buying a home you see yourself living in for at least five years – one that’s equipped with the features and space you need, both currently and in the future.

Buy for A Lifestyle Upgrade, Not Speculate with Money

Your home is much more than a financial investment; it’s where you will eat, sleep, host friends, raise your children… It’s going to be the place that will be your safe haven, a place where your life happens. Though property investments are a low volatile asset class, the housing market can still be unpredictable. Don’t make the mistake of purchasing property because you think it will net a big short-term financial return. You will most likely be occupying this home for several years therefore one of your priorities should be finding a home that will help meet your needs and give you a lifestyle upgrade.

South Park, Mombasa Road

Focus on What’s Important for You

Focus on finding a property that meets your needs – but don’t get distracted by flashy features that might break your budget. Prioritize what are the most important features you need to have and what are the least important features you don’t need to have. Nice-to-have features often hike up the price tag for things that you may not particularly value six months down the line.

Set A Price Point and Stick to It

The ideal time to set a price point would be even before starting to look for a home. It’s incredibly easy to go over budget in competitive markets today. Be sure to set realistic price points by making market comparisons. Take into consideration how you make comparisons when setting your price point. For instance, it’s important to note that the price per square meter is not always the ideal metric to use to set price as there are other factors that influence the price such as the structural integrity and quality of the building. Additionally, one of the main culprits of going above budget is the location aspect to the property. There’s nothing inherently wrong with that as local schools’ matter, transport time to and from places of work matter and access to local amenities matter. But be realistic and know what you’re willing to compromise on. Would it be less square footage or a different neighbourhood?

South Park, Mombasa Road

Keep A Six-Month Strategic Reserve

While a deposit is a significant expense, it’s also crucial to build up a strategic reserve and keep it separate from your normal income and expenses. This would be a contingency reserve to cover six months of living expenses in case you get sick, face an unexpected expense or get let go off from your job. A reserve like this will not only insulate you from financial hardship but it will also give you a peace of mind.

Get Pre-Approved Mortgage

The pre-approval process with your chosen bank requires organizing all your paperwork, documenting your income and understanding all the loan options available to you. It can get a little frustrating in the beginning but it saves plenty of time later. Getting pre-approval also indicates to sellers that you’re a reliable buyer with strong financial footing. But most importantly, it helps you understand what you are able to afford.

South Park, Mombasa Road

Shop Around for The Best Mortgage

Though a property investment is the biggest purchase so many of us will ever make, many buyers neglect this process and don’t shop around for a mortgage, and instead only consider a singer lender. The difference in mortgage rates, though seemingly small at the time, can increase significantly over the lifetime of the loan. It’s crucial to evaluate all the available options you have to make sure you’re going with the lender who meets your needs.

Be Willing to Walk Away

Buying a home is no doubt very time-consuming and daunting at times, but it’s ultimately a rewarding endeavour if the end result is you closing a deal on a home that meets your needs. But it’s important to manage your expectations in the event that you don’t immediately find a home with the features you need.

Be prepared to look some more if the property doesn’t meet your requirements or if the timing doesn’t feel right. Hold fast to your list of must-haves, stick to your price point and don’t settle for anything less than what you need.

It won’t always be terrible to miss out on any particular house. You’re in the real estate game and you’re playing for the long run so you can thrive years from now.

South Park, Mombasa Road

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