If you’re about to apply for a home loan, you should build a specific provision for home maintenance into your monthly budget, says Shaun Rademeyer, CEO of BetterBond, SA’s biggest bond originator.
“Many people don’t know this, but there is actually a clause in most mortgage agreements that obliges the borrower to keep the property in good condition – presumably so that the lender can be assured that the asset which is securing the home loan will retain its value.
“And certainly, banks will turn down home loan applications these days unless potential house buyers can prove that they will have sufficient disposable income to be able to afford maintenance and ongoing costs such as rates and levies, in addition to their monthly bond repayment.”
However, he says, there is also a big advantage for home owners themselves in “thinking maintenance” from the time that they first move in, and that is that they will be able to get the best possible price for their property if ever or whenever they decide to sell it. “Whatever the state of the residential property market, it’s a fact that the homes in the best condition not only sell faster but at higher prices, so it definitely does pay to make steady investments of time and money in keeping your home in shape.
“This is especially so in the current economy, where various events such as retrenchment can affect your ability to keep up your home loan repayments and necessitate a quick sale in order to ‘cut your losses’ and keep your credit record intact. The last thing you want to have to address if that happens is years and years of deferred maintenance which is either going to cost you a lot to catch up or lower the price that you can expect for your home.
“On the other hand, if you have kept your property in good condition, it will be that much easier to add that extra show day ‘gloss’ to attract lots of potential buyers and achieve a satisfactory sale.”
Rademeyer notes that while home owners are often reluctant to spend any more on a property they are about to sell, it is definitely worth making the effort to ensure that their home is well-presented and compares favourably with other listings in the same area. “The majority of those interested in buying a house want to see a home that clearly does not currently require work or expenditure on repairs and improvements, and they will pay more for that.
“It is also very useful for home owners to keep a record of all the improvements they make and repairs they undertake during their period of ownership. This evidence of regular upkeep will be a further attraction for potential buyers.”