Essential Tips For First-Time Home Buyers

Being a first-time home buyer is exciting! It is a momentous milestone in anyone's life, as it represents an important step in creating a secure financial future. It's one of the biggest financial investments you will ever make. But it can also feel overwhelming—decision making and having the adequate amount to buy your preferred dream home, can be a daunting task, especially in a Zimbabwean economy.

It’s essential to know exactly what you're in for in terms of costs, procedures, and legal implications with the sales price. Below are a few tips to consider when purchasing a house;

1. CONSIDER THE MARKET PRICE

The very first thing that you want to do when buying a home is to really understand the value of that home. Make sure you look at the average sales price of the area you’re buying your first home in, compare market prices with other houses in that area and see that the sale price aligns.

That way you can be confident that you're making a good purchase, because it's easy to fall in love with the home and overlook the right purchase price.

2. DOES IT SUIT YOUR LIFESTYLE?

Consider the area in terms of how much it suits your general lifestyle. It's easy to be drawn in by a low mortgage payment, low selling price, or a really flashy property. But if your lifestyle involves a long commute into work every day, you're probably not going to be so happy with your purchase down the road. If you don't like the hustle and bustle of the area, you won't want to regret having committed your money to something that doesn't suit you. Furthermore, nearby schools do put up a great consideration when purchasing a family home. Amenities and recreation parks also play an important part in your decision making.

3. CONTACT THE PROFESSIONALS

With so many bogus and inexperienced sales agents out there, you don't want to end up in the hands of a fraud. Make sure you connect yourself to a registered real estate agency. A serious and wise buyer will verify registration of real estate agencies through the Estate Agents Council of Zimbabwe. Once you find the right agency, they will hand you over to their trusted sales agent responsible for your area of interest. With their professional knowledge, they will help guide you through the whole process, putting your mind at ease.

4. CONDUCT DUE DILIGENCE

Before committing yourself to a purchase, it is important to make a thorough investigation of the property you want to acquire. Due diligence is a comprehensive, complex and critical stage in any real estate acquisition. Don't leave any stone unturned, get time to assess all documents and look at any or all possible red flags with the property, title and many other considerations. 

The checklist below, outlines many of the key documents, records, and financial information needed for a full and complete due diligence on a prospective property acquisition. In many transactions, we typically urge clients to incorporate this checklist into the sale contract and require that the specified due diligence period will not commence until the date that the seller produces the last of each of these deliverables.

Simply put, when you’re the potential buyer of a property, you deserve to have all the necessary documentation in your hands before you start the intensive due diligence process. We hope the checklist below will serve as a helpful guide you’ll need to make the most informed decision possible on your next real estate acquisition.

1. The most recent title policy or title commitment on the property in the possession or control of the seller together with all related documents.
2. Legal description of the property.
3. Local Authority Compliance Certificate for the property and all zoning approvals (including variances and any pending applications).
4. Declaration of covenants, conditions, restrictions, reservations and easements for the property.
5. 2 year statements of utility bills attached to the property.
6. A copy of existing insurance policies and certificates and any pending claims against the property.
7. Any and all other matters as purchaser may deem reasonably necessary to satisfy itself, in its sole discretion, concerning the property and the status of the property’s title.

5. THE AGREEMENT OF SALE

Having been satisfied with the above, the next step would be purchasing the property. Once the seller is satisfied with your offer to purchase, an agreement of sale will have to be drawn up. But before signing it, read it thoroughly. It must cite the correct description of the property as per the title deed. The parties must be cited. The deeds office requires the date of birth and national identity numbers of the parties to be indicated on the contract. 

The agreement of sale should also state all the details of the sale: for example, the date, purchase price, signature of all parties and witnesses. A typical contract will set out the full particulars of the parties, the property, the payment method or terms, warranties and obligations of the parties, any conditions precedent that must be fulfilled before the transfer will be effected, address for the service of notices, the applicable law, arbitration and termination of the contract. 

The agreement of sale must be signed by the purchaser and the seller in the presence of two witnesses each. Make sure that the contract accurately reflects what the parties agreed to. If the parties agree to something and it is not written out in the contract, it is not guaranteed. The contract can only guarantee what is included within the “four corners” of the contract, meaning, anything not written in, is not guaranteed. 

Reading the contract thoroughly can ensure that there is no misinformation or terms that were not agreed upon. It is important that you understand what it is that you are agreeing to. What are the terms of the contract? What are your duties under the contract? What are the other party’s duties under the contract?

What are the terms of default under the contract? When does the contract terminate? Be sure to look for the answers to these questions while examining the contract. 

We hope the above serves as a basis of useful guidelines in home purchasing. At Property Channel, we are here to serve you as we link you to your desired asset, while making the process a lot painless for you.