Whether you are buying a dream home, a first home or even a holiday home, the feeling you get when you find a house that ticks all the boxes is always special.
After all the excitement comes the reality of making an offer and this part is filled with feelings of anxiety. Understanding what to do well ahead of time will help you deal with the anxiety and ensure that you seal the best deal in just five steps.
Step 1: Run the numbers
First things first, you will want to make sure you can afford the home before making an offer. Getting pre-approved for a home loan can help you understand the actual amount the bank will be willing to give you, based on your credit health and affordability. You should also keep in mind other costs such as property rates, levies and homeowners’ insurance. These extra costs can add a significant amount to your overall monthly payment.
Step 2: Determine your offer
Once you are ready to make an offer, you need to determine what price is fair to table on the offer letter. If you are working with an estate agent, you have the right to ask for a property valuation report, to help you understand what the current owners paid for the property and what the sales of comparable homes in the area have been.
First-time buyers and their agents should reach out to MortgageMarket.co.za to get a free property valuation report and information about how to increase their chances of making a successful offer.
Step 3: Update and prepare your pre-approval letter
Including a pre-approval letter with your offer can help show sellers you are reliable and able to secure the funds needed to purchase their home. It is as good as an all-cash offer to the seller. Getting this pre-approval certificate is free on www.mortgagemarket.co.za. It will help you shop with confidence and estate agents will take you seriously when showing your offer to the sellers.
Step 4: Negotiate with the seller
The seller can decide to accept your offer immediately if they see it as fair, but you should always be prepared to negotiate if they counter your offer. It is this part of the buying process that gets intense, as there is a lot on the line. The easiest way to make your offer more attractive to the seller is by offering more money but only use this if there is room to increase your price based on the following two reasons:
- The comparable sales in the area suggest the asking price is lower than other sales pricing and hence you have room to pay more without overpaying on the property.
- If your affordability, plus the extra cost, allow for an increase in your offer.
Step 5: Finalise your offer and begin the home loan process
Once you and the seller have reached an agreement on the selling price, the transfer and registration process can begin. The next step is to apply for your home loan.
Throughout the homebuying process, you would want to make sure you have the right advice and get all benefits of discounts and tangible value available to you.
For example, Mortgagemarket.co.za allows you to compare all the lenders in SA in real-time and with full transparency of what they have to offer. They will help you to negotiate with each bank through this process and give you access to the option of moving your primary banking to another lender for extra savings on your interest rate by 0.25%. They will also pay you R5,000 cashback for self-serving through their process.
Buying a house can be stressful, however, planning well ahead and knowing how to take full advantage of the benefits of good property deals can be both stress-free and rewarding this festive season.
Tim Akinnusi is CEO of MortgageMarket
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