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.
