If you’re a first-time home buyer, the 3 questions you absolutely should ask
Have I done the professional due diligence required to buy a home?
Do I possess the emotional intelligence and capacity to buy a home?
Are my finances adding up, is my math done?
Yes, the 3 questions come up in this article immediately, because these questions should be top of mind, for any home buyer or investor. It’s important to draw your full-scale attention to these questions, as they’ll ultimately determine if buying a home makes sense for you, and if you’re even ready in the first place.
It’s safe to say that for the most part and for most people, our home is the most valuable and sentimental financial asset we possess. But it is about so much more than an investment or a number on a spreadsheet. Regardless of where we call home, and what space type it is, home is our safe harbour.
It’s not surprising that first-time homebuyers get nervous about taking the plunge into homeownership. For those who want to go the route of taking a home loan or a mortgage, it dawns on them the huge commitment required to buy, and stay owning as well as maintaining a home both financially and emotionally. If you feel both excitement at the prospect and anxious by the responsibility, that’s normal.
Ask yourself the three critical questions mentioned above to weigh your readiness for this life-altering experience. This isn’t a fool proof method to avoid buyer’s remorse, but answering the questions honestly without putting your finger on the scale will increase your chances of being a happy homeowner instead of one filled with remorse.
Are you professionally ready to buy a home?
Your current job and future career plans and projections are an essential influence in your homebuying decision. First, if you are a salaried employee who has worked at least two years in your field, you should be able to get a home loan.
However, if you work on commissions and bonuses or are self-employed, lenders want to see a solid two-year history of reliable income to secure a loan.
Do you plan on changing jobs or perhaps moving out of the area to further your career in the next two to three years? If the answer is yes, it may be wise to hold off on buying a home right now. Recovering the costs of buying and selling takes roughly five years.
Are you in a good financial place to buy a home?
This is indeed the crux of the matter, especially in cities in Nigeria, where buying property, or even land requires that you have quite a bulk of funds. Until the systems that make for instalment payments over a long stretch of period, say over 5-10 years become a thing in Nigeria, as opposed to the maximum of a year that most real estate investment firms currently offer, you will have to cough out a lump sum to achieve home buying or investment. So, are your finances looking good? What have you got stashed away?
Do not forget to factor in additional costs that will be incurred in the process of buying a property whether it be moving costs, survey fees, developmental fees, home furnishings, repairs, and the like. It would also be a super idea to have spare cash available for unexpected expenses.
When you initially were renting a home, your landlord was most likely pitching in with some of the running costs for the building. However, as a homeowner, you must evaluate affordability by taking into consideration those expenses that will now fall on you as a homeowner.
Are you emotionally prepared to buy a home?
Question the motives inspiring your desire to buy a home. Is everyone in your circle of friends taking the plunge, so you feel somehow left behind? Are you having a less-than-pleasant rental experience that is pushing you to see homeownership as the answer? Are well-meaning family members or friends trying to sell you on buying before you are ready?
Building wealth through equity, having control over your personal space and taking that next step into adulthood and being part of the Lagos or the city dream are all positive arguments that support owning over renting. But if the responsibility is going to be a burden rather than a joy, and if having added chores will make you resentful, it may be best to enjoy the freedom of renting for a while longer. Trust your instincts.
Are you rushing into the process of buying a home without having enough information? Have you factored in the inability to relocate unless you re-sell, as well as unexpected costs of repairs?
Learn from others’ mistakes. If your response was no to any of the questions, allow yourself the grace of time. Don’t rush into a significant commitment you are not ready to make.