First-time home-buyers do not make property
investments in a hurry. Take your time, study the market carefully and then
make an informed choice.
No feeling in the world compares with moving out of
your parents’ house or rented accommodation any buying a home of your own. And
while the real estate market is currently very much in favor of buyers –
buying a home as soon as you can afford to can sometimes be a mistake.
Some of the mistakes many first-time home-buyers commit
can have serious repercussions on the value that they are finally able to
obtain from their property purchase. Here 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 increase dramatically.
Inflexible focus on ready-to-move-in
In any growing real estate market,
under-construction projects are cheaper than ready-to-move-in 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 ready-to-possess home would cost you today.
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 developers
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
pre-qualification for a home loan. These two factors combine to give the
developer sufficient reason to take the buyer seriously, and offer a better
deal. Without them, he or she could be just another ‘window shopper’.
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
finalizing a loan.
Not factoring in your family’s growth
A single bedroom flat or even studio apartment will
undoubtedly meet the requirements of a bachelor or a newly married couple.
However, there is a ‘growth curve’ that needs to be
factored in – most bachelors eventually seek to marry, and most married coupled
will have children.
Also, elderly family members who are still able and
content to manage on their own today may not be able to do so in a few years’
time.
In
other words, it does not pay to think too small while buying a flat. It makes
sense to budget for both finances as well as future needs while buying a home.
