While renting a property offers a tenant the luxury of selecting a home that meets their short-term needs, purchasing a home is a far larger commitment that requires more careful consideration, says Peggy Su, Regional Director of RE/MAX London. She notes that the importance of thorough research before purchasing a property can never be overemphasised.
According to Peggy Su, there are five things that every first-time homebuyer should consider as they begin the process of purchasing a property:
Is there the possibility for growth?
Because property is a medium to long-term commitment, it is important to look for a property that can grow with your developing needs. “If possible, buyers should shop for a home that meets their current requirements with the potential to adjust to a changing household. It’s not an exact science as your five-year plan may not pan out as expected, but it is a good idea to consider the possible life changes that could occur and impact your need for an extra room or additional space,” says Peggy Su.
The growth of the buyer’s family is not the only growth that should be considered. Peggy Su says that any property purchase is an investment, so it makes sense to ensure that the property has the potential for growth in value too. “Adhere to the adage of location, location, location. Also, check area statistics and figures to ensure that the home is purchased at fair market value. Doing these things will ensure that you can be fairly certain that your investment will see capital appreciation over the long term.”
Make sure of the basics
While your first property may not have many luxury features, you need to ensure the basics are in good condition. According to Peggy Su, the property should be thoroughly inspected to ensure that there are no hidden defects that could be costly to repair.
Everything has a lifespan
Along with identifying aesthetic and structural defects, it is important to look at features of the home that are currently in good condition but may need to be replaced shortly. Everything has a lifespan and may require repairs at some stage, so look at the condition of features such as the roof and flooring. How long will it be until these need to be replaced? Researching the expected remaining life on large-ticket items can help you plan for the future.
There is no perfect home, just the right home
It is possible that the first home you buy may not be in perfect condition, but it’s important to make sure that it is the right home for you. “Ensure you are buying the right home by prioritising the elements you can't live without, nice to haves and the things you are willing to compromise. While a garage is nice to have, it may suit you more at this point to have an additional bedroom or larger garden. The importance of each of the features offered will depend entirely on your tastes and needs,” says Peggy Su.
Weigh up all the costs
Remember that it is not just the mortgage repayments that need to be budgeted for and considered. There are other recurring monthly costs involved in owning and maintaining a home. It is vital to choose a property that meets your budget regarding what the full living costs will be and not just the mortgage repayment. Things to consider would be the cost of the utilities, council taxes, land rent and maintenance costs. These are not costs that are considered by the bank when approving finance, so it is important to calculate these costs with an experienced real estate agent or a financial adviser.
“To ensure that the correct decision is made, which will result in a return on investment and more importantly your happiness, take the time to weigh up all the options available to you,” Peggy Su concludes.