07 September, 2022    

It is worthwhile to be aware of the common mistakes that homebuyers make, so that you can avoid them and take quick and more informed decisions. Be mindful of the following:

1. Underestimate Cost of Purchase

Purchasing a property comes with a lot of expenses. These go above and beyond the Seller’s quoted pricing and are typically taken for granted. Most of first-time buyers, however, will simply pay attention to the basic cost, which is the price per square foot. Additional fees may be incurred due to GST, Maintenance Costs, PLC, Interiors, Legal Charges, Registration, and Stamp Duty, and other factors. Banks typically don't fund this because these fees are included in other costs. Hence, the Buyer should make provision for an additional 8-10% over the cost of the property.

2. Overlooking the Ideal Property while Waiting for a Perfect Fit

Through our 10+ years of experience and counting, we have observed that an ideal home should meet 70% of all your requirements. A 100% ideal property is not practically feasible.

3. Purchasing a Property for the Wrong Reasons

Due to the existing circumstances, such as the house's proximity to your place of employment or the presence of a coworker/friend/family, you may fall in love with a property. The same might not apply in the future, though. Hence, your decision must be logical and rational while keeping in mind your long-term and future needs.

4. Buying under Peer Pressure

The popular expression that “renting is throwing money” should never be taken as a general rule. Social status in these times has become a part of the lives of the common man. Do not fall into the trap of higher social standards or peer pressure by being a homeowner. Think about buying only if you plan on staying for at least 5 to 10 years.

5. Not Having a Pre-Approved Home Loan

You must get your loan pre-approved, this would assist you in better negotiation with the seller for your ability to make faster payments than other prospective buyers. Additionally, the fact that you would be viewed as a serious buyer, the seller would prefer dealing with you than other unprepared prospects. You will also save your precious time and energy and focus more on the negotiations when the collection and documentation-related work is sorted for you.

6. Looking for a Better Deal

If you consider purchasing a house whose fair market price is Rs.1Cr.; at the same time, there could be other prospects who are also considering the same property. If you continue to negotiate for Rs. 3-5 Lakhs, there will be one of those prospective buyers who will buy it for the market rate which is Rs.1Cr. Hence, it is recommended that you play the win-win game and not lose the rupee while bargaining for the paisa.

It is important to understand the time invested to find your dream home and the prolonged search for it takes away personal and professional valuable time. Besides, logistics expenses to move here and there can be substantial and finally buying a not so good home can leave a bitter taste. If the same amount of time is invested in your profession, you will end up earning more. Even if you have to pay 2% extra for your dream home, go for it! If you are an investor, then it would make more sense to look for a bargain.

Remember! The house which you liked today was liked by someone else yesterday.

7. Delayed Decision Making

You currently only have the financial means to finance a 2 BHK, despite your anticipated future demand for a 3 BHK. Wait till you can afford a 3BHK property if possible. But be aware that Prices rise more quickly the longer you wait.

You can instead buy a smaller home now and slowly upgrade to a bigger and more suitable home. When you have a limited budget, only purchase what you truly NEED. As long as there is a substantial NEED, you may always get a 3BHK eventually while settling for a 2BHK right now.

Now you could be perplexed and believe that this advice runs counter to the frequent recommendation to choose a property based on your future requirements. So instead of hurriedly settling for less, why not wait to acquire a 3BHK as per your future requirements?

The solution to this conundrum, however, is that even though you have purchased a 2BHK right now, its price will increase over time. By doing this, you are simultaneously accumulating equity in your home and keeping it as a backup in case your future 3BHK appreciates more than anticipated and becomes more expensive. If a 3 BHK is what you WANT, don't wait until you have enough money to buy one.

8. Hiring A Seller’s Agent (Listing Agent) against Buyer’s Agent

A seller's agent will always consider the seller's best interests. In order to maximise their profit on the sale price, sellers currently use many agents to bring in a variety of potential purchasers directly. Being an exclusive seller's agent and opening the property to other agencies to find purchasers on their end is the best technique that we are attempting to introduce to India. Currently, we serve as the buyer's and seller's agents, providing advice.

9. Searching Property Prices Online

You often start your due diligence by researching the price of your potential home online.

Online price quotes are rarely the most accurate source of information, but they do provide you with a general idea or pricing range. To acquire a more accurate estimate, ask a reliable agent for the selling price of a nearby property that has recently sold. Additionally, the cost varies from 5 to 10% depending on the interior design, outside view, and neighborhood. When assessing the cost, bear this in mind.

10. Focusing on Probable Appreciation than the Quality of Living

The property's potential for appreciation is something we cannot and do not control. Because you only have one life to live and no influence over the market, it is smarter to concentrate on the quality of life. If the standard of living is high, prices are most likely to rise. Purchase in areas where you anticipate growth! Usually, 2 BHK apartments are worth more than a penthouse or a villa.

11. Planning The Right Budget

  • Resale Properties: They are sold in “as-is” condition. Therefore, you need to be mindful of the repair and renovation costs due on your end.
  • New Projects: The model flats for new projects are shown with a lot of fittings and fixtures. You will have to buy them on your own and further take care of the home interiors.

You need to understand and hence plan your budget accordingly according to what type of flat you have decided to buy.

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