First-time homebuyer: What you need to know about owning a home
Category BUYER'S TIPS
After months of searching for the right property followed by weeks of legalities and reams of paperwork, you've finally done it - you're a homeowner and probably very relieved that all that's left to do is move into your very own home. But achieving the dream is not where it ends.
Buying your first home is an incredible accomplishment and milestone, however, once the moving boxes are unpacked and the new home excitement wears off a bit, many first-time buyers are surprised to find that homeownership is quite different from renting and it comes with much more responsibility on a day-to-day basis.
As a renter, your main financial obligation was paying rent and electricity each month, with the landlord handling maintenance, repairs, and other housing costs but as a new homeowner, all the responsibility and costs of maintaining your property now fall squarely on your shoulders and it can be very daunting.
The best way to deal with these new obligations is to be proactive rather than reactive: It's easy to be overwhelmed when problems and unexpected expenses arise, especially during your first year of homeownership, and the only way to handle issues with minimum stress is to be prepared from the get-go.
Additional tips:
It is vital to realise that an offer to purchase a property is a legally binding contract and that you cannot get out of it without incurring onerous financial penalties. You should therefore be ready to purchase the property before you put in your offer.
A property is a long-term purchase, and you need to ensure you make the right decision before putting in the offer. You cannot put more than one offer in at a time and once that offer is in, it is binding unless it lapses due to your inability to fulfil any potential suspensive conditions.
The additional responsibilities and issues that new homeowners are likely to face and how to ensure that they are prepared from the get-go to deal with any problem that can - and often does - arise, especially in their first year.
Preparation and Planning:
Be Prepared for Maintenance and Repair Costs: One of the biggest shocks for new homeowners is how expensive it can be to keep a house in good condition. As a renter, you simply phoned the landlord when the geyser broke or the drains blocked but, as an owner, the bills and the organisation and management of any repairs are now your responsibility.
Experts generally recommend budgeting 1-4% of your home's value annually for maintenance and repairs. It's also a good idea to line up reliable contractors for when something inevitably needs fixing rather than having to phone around for a professional mid-crisis. Tackle small projects yourself, if possible, but it's important to be able to call in the professionals for major issues.
Establish Where Everything is Located as Soon as Possible: Where do you switch off the water supply, where is your drain access, how do you access the geyser and exactly where in the roof space is situated? You don't want to be running around like a headless chicken watching your home flood because you have no idea where the municipal water tap is situated.
Get Comfortable with DIY and YouTube: Speaking of tackling projects yourself, your first year of homeownership is the perfect time to start learning basic home maintenance skills through books, online tutorials, and YouTube videos. Things like caulking unclogging drains, sealing wooden decks, and fixing wonky door hinges can be manageable DIY projects.
Not only will you save money, but you'll gain useful skills and confidence as a homeowner. But be honest about your limitations and don't try anything overly dangerous or complicated until you're ready. The right tools and safety gear are musts as well.
Prioritise an Emergency Home Repair Fund: One of the worst feelings as a new homeowner is having to fork out for an expensive repair like a burst geyser or faulty electrical wiring before you've built up any savings.
That's why prioritising an emergency home repair fund from day one is so important for first-time buyers. Start setting aside a monthly amount as soon as you've decided to buy property or, at the very least, when you move into your new home.
Understand Your Home's Efficiency and Costs: The utility and efficiency costs for your new home may vary drastically from what you're used to, depending on the property's size, age and construction quality. During the first year, carefully track your spending on things like electricity, water/sewerage, and internet to serve as a realistic baseline going forward.
Look for opportunities to improve energy efficiency through insulating, upgrading appliances and systems, etc. Seemingly small measures can sometimes yield substantial long-term savings.
Stay On Top of Seasonal and Annual Maintenance: Last, but not least, be diligent about necessary seasonal and annual maintenance tasks. This not only maintains the condition of the property, you will also discover any issues before they become big, costly problems. Important tasks include:
- Cleaning gutters, downspouts, and drainage areas
- Checking for cracks/leaks and recaulking windows and doors as needed
- Testing alarms and replacing batteries
- Pruning and trimming trees/bushes, etc
- Creating a simple checklist and setting calendar reminders will help ensure nothing important gets forgotten.
Author: PROPERTY 24