For various reasons, an increasing number of home buyers these days are single and there are some special considerations for such buyers to take into account.
“A lot of the increased demand we are seeing now for smaller apartments and townhouses is from single adults, some of whom have never been married and some of whom are single parents,” says Jan Davel, managing director of the RealNet estate agency group.
“But these buyers do face different challenges and have different needs to couples and families when it comes to choosing and financing a home, so they need to work with estate agents and mortgage originators who really understand this specific market sector.”
The biggest concern for single homebuyers is of course affordability and the ongoing expenses of homeownership, especially without a spouse or significant other to share the load, “but with interest rates currently at 30-year lows and all sorts of low-priced inventory on the market, an increasing number see this as a rare good time to get into the market,” he says.
“And there are ways for them to buy safe, sane and smart — and start building wealth for their own and their children’s futures — starting with a thorough evaluation of their financial situation.”
Indeed, the first thing that single people who are serious about buying should do, says Davel, is apply for mortgage pre-approval. This is different from pre-qualification because a lender will not pre-approve you to buy for a certain amount until it has thoroughly checked out your credit and employment history, your current earnings and other debt obligations, and your ability to afford monthly property taxes, municipal charges and levies as well as your mortgage instalment. You may also need to prove you have enough savings to cover a deposit and the transfer costs.
“Consequently, once you have been pre-approved, you will have an exact price range for your purchase, so you don’t waste time looking at unsuitable properties, and you will also have a really good negotiating tool in hand when it comes to making an offer. In addition, you will feel much more confident about your ability to manage this commitment on your own going forward.”
The second thing for single homebuyers to do, he advises, is to think about their lifestyle and what type of property they should buy.
“The first home you purchase will probably not be the one where you’ll live for the rest of your life, so you should not buy any more space than you actually need right now — and our recommendation for your financial peace of mind is that you buy for about 20% less than the amount for which you have been pre-approved.
“Flats and townhouses usually fit the bill for single buyers because they are typically more affordable than houses and require less upkeep. You may also get access to communal facilities such as a pool, tennis court or laundry. But you do need to be prepared for the fact that you will also have neighbours close by, which means not much privacy, and will have to pay a monthly levy.”
Finally, says Davel, single buyers need to pick the area in which they want to buy especially carefully. “Proximity to work, school, family and friends is extremely important to most single buyers, but your first concern should really be security.
“Being a single homeowner means that there probably won’t be someone at home for much of the time, and that you may be leaving home early or coming back late more often than other homeowners, so you must make sure that you choose a low-crime neighbourhood, and a complex with excellent security provisions, even if it is a little less accessible.” — I-Net Bridge