Five things you need to know before buying a house


As we have mentioned before on our blog, buying a home is the biggest single financial commitment most of us will ever make. Learning as much as you can about the home buying process and home ownership before you take that step is the single best way to ensure you spend your money wisely. That’s what this post is all about.

Here are five things APS Bank thinks you should know before buying a property.

1.    Home ownership isn’t mandatory

Contrary to popular belief, you don’t have to own your own home. Maltese culture does encourage us to own our own home and control as much of our destiny as possible, but you are not forced to buy.

It is true that property makes for a great investment, but only if you can comfortably afford it. Prices are rising steadily, so ownership may not be practical or affordable in every situation.

2.    Home ownership is a long term investment

It’s expensive to buy a house, with the cost of the property itself only being one aspect of that expense. Even though APS home loans don’t currently have legal fees, there are plenty of other things you will need to pay for. So if you plan on buying a house, plan on keeping it for a while.

One important aspect of home ownership is the influence of the housing market. Property prices fall as well as rise, so thinking long term can be beneficial when that market works against you.

3.    Buy the house you need

Despite being a long term investment and influencing life planning, the home you buy should be what you need now, not what you might need far into the future. Family planning is all very well, but spending more now so you could house a potential new family at some later stage is not the way to go.

Buying a house that could be reasonably adapted or extended should the need arise, while not being too much for you current circumstance is the ideal. Get as close to this as you can and the investment could be regarded as a good one.

4.    Negotiate prices

Just about every aspect of our lives can be negotiated. In the context of a property purchase, the price of that property is certainly negotiable. The commission a real estate agent charges to sell your house is negotiable, as are moving costs and a number of ancillary services.

Government taxes and notary fees are fixed, but it remains up to you to get the best deal on everything else. Just don’t be afraid to negotiate.

5.    Know when to walk away

It’s easy to advise against getting emotionally attached to a property before it’s yours but it’s harder to do in practice. However, it’s important to recognise when a deal is not to be.

Before that contract is exchanged and deposit paid, a house purchase needs to be viewed purely as a financial transaction and nothing else. Once that contract is signed, then you can begin planning your new home and where you’re going to put your furniture, not before!

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