The Real Estate Smell Test?
When was the last time you were going to eat some fruit salad, but once you took the container out of your fridge, opened it and gave it a good smell, you quickly realized something in it had started to go bad.
The unexpected smell of fruit fermentation can make one’s head turn rather fast.
Especially at some innocent morning pre-breakfast moment!
Doesn’t the expression say “the nose knows”?
I believe the same thing happens in real estate.
You have been looking for that free-standing two-bedroom, two-bathroom house in Northcliff for months but every time you seem to be out of luck as house-after-house is priced right out of your range. Except for this week’s find: not only does it come with your bedroom/bathroom-criteria, but it also has an extra study, library room and pool! And all within your budget! Sorry to burst your bubble, but at this point, your nose should start smelling something odd here.
You have been submitting your applications with a handful of financial institutions to get financing so you can buy that new house. All of them weren’t too impressed with your $1,000 monthly income, in combination with an open-standing debt on your car of $12,000 and some other undisclosed unpaid credit card saldo of five figures. All of a sudden, there now is some second-ranking finance provider who approaches you and says they will have no problem getting you your money. Truly, I wish it could be the case, but there is something suspicious going on with this proposed deal!
Obviously, I have been exaggerating here in order to get my point across. We are all equipped with a decent common sense and a sense of smell. Why don’t we take advantage of these skills to prevent ourselves from getting into worse situations?
“Bad credit? No job? No money? No problem!” does sound like a familiar headline only a few years back. How many people still believe they can actually achieve their (financial) dreams by continuing to spend?
In our latter example, those people ought to take a deep look at their outgoing bills and start putting their house in order (pardon the pun) before thinking of starting yet another spending spree. In our former example, these people are perhaps qualified to buy something but have been scared by the media reports on how tough financial institutions have become in extending home loans. Maybe they ought to see what amounts they would pre-qualify for and not give up before they have actually tried!
Either way, take your time to become more financially stable or analyse your situation before plunging into the next financial adventure. Luckily, real estate markets in South Africa are forecasted to remain quite flatlined for the coming year, so there’s no reason to rush into it!
If a (real estate) deal is too good to be true, rely on your nose. It knows.