Mistakes to avoid while buying a house
First-time homebuyers should not be in too much of a hurry to invest in property. Take your time, study the market and then make an informed choice
There is no feeling in the world that can compare to moving out of your parents’ house or rented accommodation and buying a home of your own. And while the real estate market is currently very much in favour of buyers — buying a home as soon as you can afford to can sometimes be a mistake.
Some of the mistakes many first-time homebuyers commit can have serious repercussions on the value that they are finally able to obtain from their property purchase. Below are some of these mistakes:
Not checking out all the options
Due to limited knowledge of the local real estate market or dependence on a broker with a limited portfolio, we choose a home merely because it fits our budget. There is a sense of helplessness involved, we wish we had more options, but there do not appear to be any. This is a patent mistake. In any large city, new projects are being launched regularly and fresh options on the resale market become available almost every day. Any of these projects or units could represent a better deal.
Often, we succumb to pressure of the real estate broker and accept that even this particular unit will be gone within a couple of days. If one is using real estate brokers at all, it makes sense to engage more than one of them as the spread of options increases dramatically.
Inflexible focus on ready-to-move-in
In any growing real estate market, under-construction projects are cheaper than ready-to-movein properties. In many cases, the locations and specifications of these projects are superior to anything that is currently available.
If one has been living in rented accommodation for a considerable length of time, opting for an under-construction flat and waiting for a year longer can make a huge difference in capital expenditure as well as overall comfort and lifestyle. You could have the benefit of a larger home and the advantages of better security, a clubhouse and a swimming pool for the same price that a normal readyto-possess home would cost you today, says Kishor Pate, CMD,
Amit Enterprises Housing Ltd.
Failing to get home loan pre-qualification
Few people buy a house these days without bargaining with the developer, nor should they. This is a privilege that every aspiring home owner has, and one should make use of it.
However, attempting to negotiate with a developer without being able to demonstrate actual purchasing power is a mistake. There are two essentials for success at the negotiation table — a down- payment and prequalification for a home loan. These two factors combine to give the developer sufficient reason to take the buyer seri- ously, and offer a better deal. Without them, he or she could be just another ‘window shopper,’ says Pate.
If your job is contractual in nature, make sure you take into account your other assets in case you are not able to pay your equated monthly installments on time. A lender generally takes into account such risks, the number of years you’ve been with a company etc before finalising a loan.
Not f actoring i n your family’s growth
A single bedroom flat or even
Before buying an apartment, check if you are qualified to get a home loan and if you will be able to afford it in the long run, especially if you have a contractual job and no other assets