Think carefully before buying a new home

When buying a car, the majority of people will look at previews of pre-owned cars and the person will read the AA or roadworthy report carefully before buying it, said Lanice Steward, managing director of Knight Frank Anne Porter. Chances are, she said, that the person will put a lot of thought into the decision to buy.

The reality, unfortunately, is that a lot of people buy a home and put themselves into huge debt without always giving it the necessary thought and planning, she said.

Why is this important today?

The cost of moving has become more expensive than is sometimes justified. Not only are there transfer fees and agent’s fees to be paid, there are also the hidden costs of a move: the registration of a new bond, the cancellation of the old bond, the move itself and the transfer of telephones and ADSL lines. These are costs which are “sunk costs”; they are not going to add value to the new home and will never be retrievable, said Steward.

“Whatever it is you decide to do, do it consciously. Think carefully about what you can afford and what it is you need,” she said. “Once you start moving up and are able to buy bigger, buy sensibly.”

Look at the schools in the area and the community that is there. Check whether you will be 100% happy to stay there for the long term because, unless you are able to add a substantial amount into the next property, it doesn’t make sense to move.

Usually it makes more sense to take the cost of moving and use this amount to renovate your current home.

When doing your financial calculations, don’t just factor in the property and the cost of getting there. There are many choices that can be made to make the move a well thought out and calculated one.

“Lastly, ask for three valuations on your current home before deciding to sell and don’t be swayed by agents who value high just to make you feel good about selling,” said Steward.

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