FAQs For First Time Home Buyers
Buying a property is one of the biggest financial and emotional decision you are ever going to make and like any big investment decision, you need the details right from start to finish to make an informed decision. Almost every first time home buyer has a ton of questions on their mind. Let’s review some of the frequently asked questions for first time home buyers.
What should a new home buyer think about before they make contact?
Before you contact a realtor or a real estate company to buy a house, there are a couple of things you should think about and get them ready. You have to figure out what type of home you are looking for. Are you looking to buy a condo, a townhouse, semi-detached or detached house? Do you want a single-family home? How many bedrooms are you looking at? Do you want a two or three-bedroom house? How many bathrooms are you looking at? A new home buyer should also think about the area he or she wants to live in. Be specific about the neighbourhood that you want and consider things like nearby schools, access to amenities, proximity and ease of access to facilities in the region. Decide on which kind of settlement you want. Do you want a standalone home, a maintenance-free community or want to live in an estate where you will be offered estate management services. You also have to settle on the price point. How much are you willing to spend on your new property? All this information will help the realtor, agent or real estate company to figure out the best home for you rather than go through so many listings and home offerings.
Do I need to pay for home viewing even if I don’t make a purchase?
Depending on the agent, realtor or company you are dealing with, it varies. We have some agents and realtors who charge a fee when you arrange a property tour with them and we have some who do not. Take Devtraco Limited as an example. Devtraco Limited does not charge any fee when you schedule a site tour of any of our properties. It is completely free and can be scheduled on any day.
What are the benefits of buying vs. renting a home?
When it comes to buying and renting homes, buying is for you and you become a property owner whereas in renting, you are not the property owner. Unlike buying a home, any money you spend will not come back to you but when you buy a home, you can consider it as an investment which you can get back your money by either reselling it in the future or renting it out. So with buying, you can get appreciation on your building and sell it in the future for profit or make a consistent income in it by renting it out. In a nutshell, buying a home is more like an investment whereas renting is not.
Do I need a real estate agent?
You can buy a house all by yourself without using any real estate agent. But sometimes you might want a real estate agent to represent you and take you through the whole process of acquiring your property. When dealing with a company like Devtraco Limited, we have our professional sales executives who will guide you through the home buying processes from start to finish without any extra charges. These executives will provide you with all the information you need, help you with some helpful contacts like mortgage lenders and banks. They will make your home buying experience a whole lot easier and smooth.
How long does it take to complete a purchase?
The duration for completing a house purchase varies depending on a couple of factors. To answer this question correctly, the buyer’s position, seller’s position and the building’s state of completion need to be taken into consideration. If as a buyer your funds are ready or you have secured a mortgage and want to move in ASAP, and the house is also completed and ready for sale, then the whole process can take few weeks. Say three to six weeks. On the other hand, if you have made a purchase or paid your initial required deposit, signed a contract and awaiting completion of the property, then depending on the state of completion, it can take some months to finish the whole process and the property will be handed over to you.
When deciding on a community, what should I look out for?
Many people look at some specific things when deciding where they want to live. You must choose a community where you can best live your life. Some people consider the availability of good schools in or around the community. Others also consider things like accessibility to public transportation, safety and security of the community, crime rate, ease of access to local facilities like parks, libraries, grocery stores and shopping malls and availability of basic amenities. It all depends on your needs and most importantly where you will feel comfortable.
How does a mortgage work?
A mortgage is a loan facility given to you by a bank or mortgage lender to finance a home or property, payable within an agreed period of time together with any accrued interest. To explain further, when you make a decision to purchase a home or property but you don’t have the total funds to buy, the mortgage provider can agree to buy the property for you then you pay them back in instalment over a specified period of time with interest. The first thing you should know as a home buyer is that not all mortgages are the same. Different banks or mortgage lenders offer different types of mortgage facilities and each of them has its own criteria for qualifying people for the mortgage. Some banks or mortgage lenders will require you to make a down payment to serve as an incentive for homebuyers to make monthly payment so that the money isn’t lost in a foreclosure. In this case, after you decide how much you can afford for a down payment, your mortgage will cover the remaining cost.
What are some of the requirements to acquire a mortgage in Ghana
The specific requirement to get mortgage loans varies from one lender to another. But generally, you will be required to submit these documents:
- A signed and completed mortgage application form
- Proof of employment with employers reference confirming your employment
- Proof of Income (at least your previous 3 months payslip showing all withdrawals and deductions)
- If you are self-employed, you will be required to provide a certified audited account for the last 3 years, copies of your individual income tax returns and bank statement for the last 6 months if you are not a customer of the bank.
- A national identification document (passport, driver’s license) and passport picture
- Proof of address (rental agreements, most recent utility bills, etc.)
- Credit history
- Any other requirements by the mortgage lender.
Who pays the real estate commission?
In most instances, it is the seller who completely pays the real estate commission or fees. In Ghana when you are dealing with big real estate companies like Devtraco, you are not responsible for paying the real estate commission. But when dealing with individuals selling their properties through an agent, you might be sometimes required to pay the agent some commission upon closing the sale.
What are HOA fees?
Home Owners Association fee (HOA) is a fee you pay on a unit basis by virtue of being a homeowner within a community. When you are looking at a community that has a homeowners association or residents association, that’s monthly dues or annual fees that go towards the general upkeep and maintenance of properties, amenities and all common areas within the entire community. These may include security, parks and all green areas, community centres, street cleaning and others. So that monthly dues or annual fees go into the staffing and maintenance for those communities. Different communities have different arrangements so asking about the resident association or homeowners association fees and what that exactly includes is necessary.