7 Mistakes to avoid as a First-time Home-buyer
19 September, 2018 / Blogs
The residential sector has been thriving supported by factors such as the rapidly growing middle class, which means increased disposable income to afford people their own homes. In addition, there’s a renewed focus on affordable housing, from both the public and private sectors, which means that most Kenyans from the lower middle class will be able to purchase houses. Owning a home is the ultimate dream for many, and affordable housing is the solution for those who cannot build for themselves due to varying factors.
With that said, buying a house is exciting but one should always keep in mind that it is a lifelong investment. The road to the dream is paved with many mistakes, which can all be avoided if the process is approached with caution.
Below are seven mistakes first-time home-buyers should aim to avoid:
- Address and functionality tradeoff: As much as getting a piece of real estate within a renowned address or neighbourhood is recommendable, this should not be a priority. Many people lose sight of the value for money and buy. To avoid the blind lure of crowd choices, list what your ideal home should be like as well as the ideal location.
- Envisaged infrastructure: Many at times, real estate agents sell property on the basis of a ‘government-promised’ access road to the tarmac. Implementation of such infrastructural projects takes a considerable amount of time. A potential home buyer should weigh whether the benefits are worth the wait.
- Following the crowd blindly: Unfortunately, some people choose where to live based on the affiliation of where their tribesmen or people of same economic class live. Considering that this could possibly be one’s lifetime residence, the home should be planned in tandem with what is important in the life of the buyer, be it proximity to work, proximity to one’s kin or friends, available amenities such as schools and hospitals, to name but a few.
- Not checking the credibility of the developer: Does your developer have a track record of quality finishes or finishing in time in case I buy off plan? The buyer should make a point of visiting their previous developments to assess the quality of work and maintenance of communal areas once the project is done. This will give a clearer idea of the actual product and answer questions such as if the developer takes up the role of facilities management.
- Ignoring the other costs of the house: The devil is in the details. One should always keep in mind that other costs than the buying price are bound to crop up, for instance, maintenance costs, service charge, which more often than not are largely dependent on the neighbourhood and type of project. Additionally, ensure you understand how much other developments in the area cost; is the deal too expensive or is it in tandem with the market averages?
- Future functionality: What will be your family size in 5 years’ time, will you need to move into a bigger house? Will the kids move out and be left with a nearly empty 5-bedroom house? For instance, for a couple approaching retirement and whose children shall no longer have the need to live in their parents’ house, would getting a 3-bedroom villa with 2 DSQs be the better option? In such a case, the DSQs can be let out or serve as extra accommodation for guests. In addition, will it be a place you can comfortably grow old in?
- Ignoring zoning regulations: When investing in a home, the buyer should conduct thorough land use due diligence for the area. What are the possibilities that the face of the area will change in the future? If it’s a low rise designated area, are the regulations strict or controlled enough? Are there upcoming high-rise buildings that have been approved?
As a first-time buyer, chances are you are more susceptible to hidden mistakes that could be financially and emotionally expensive. However, as tedious the process can be, one must continuously educate themselves in order to remain in the know. Talking to real estate experts and reading research reports wouldn’t hurt. Additionally, before parting with your money, have you ensured that you are financially stable enough to make the purchase? To avoid future financial constraints, one should budget and arrange their finances first then identify a home based on the budget, not the other way round. For mortgage buyers, ensure you understand the size of mortgage you are eligible for from your financier. Mortgage is reliant on factors such as size of your income and the house deposit, more importantly, understand the repayment plan, which is also determined by one’s age and the prevailing interest rates.