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6 Steps on buying property in a skittish economy

6 Steps on buying property in a skittish economy

Year-end is a time when people start thinking about re-evaluating their goals and taking action on improving their financial situation, which in many cases includes a property transaction. People tend set their goals or declare a New Year’s resolution to achieve certain things at this time of the year. Did you know that only 8% of people are successful in achieving their New Year's resolutions each year?

According to FNB Property Barometer the key drivers of people looking to sell their properties are ‘the need to downscale due to financial pressure’ or the need to ‘upgrade their homes’. Other reasons include ‘relocating elsewhere in South Africa’, ‘Emigrating’, ‘Moving for safety and security reasons’, ‘moving closer to amenities’ and ‘change in family structure through death or divorce.’ With the economy as tight as it is, this decision is now more important than ever.

Paul Stevens of Just Property says whether you are buying, selling or investing in a rental property it could be your single biggest financial transaction. One should always invest with careful planning and consideration. He says that you must consider all the downsides first when buying your property. Take it a step at a time to ensure you reach your end goal.

The first step is to find an area to concentrate on. Depending on whether it is to live, for lifestyle or for investment must start with identifying areas, suburbs or neighbourhoods that you know and want to live or invest.

Step two is to find properties that meet your criteria in terms of location, style and amenities. Is it close to schools, shopping centres and type of neighbourhood. Reliable municipal services and extras such as a fast Internet connection with fibre is a necessity nowadays for those who operate their businesses from home

Step three is to secure good partners on your team such as bond originator, conveyancer, real estate agent and property inspector. They can all help you maximize your deal.

Step four is to know exactly what you can afford and what level of finance you qualify for. According to Stevens it is advisable to go through a bond originator. They know exactly the type of documentation, criteria and how present the deal to the banks.

Step five to negotiate a good deal to ensure that you get a fair market price. There are always bargains out there in any market so if you don’t ask for the price you want you don’t get. Price isn’t everything, as you have to consider if there is a good chance of capital appreciation. Buy the cheapest property in an expensive area is always a good measure if appreciation will be quicker.

Paul Stevens is himself a passionate property investor and says that there are still excellent property deals here in South Africa. You need to understand the dynamics of the market and the investment; this is where Just Property agents can help buyers.

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