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 – a true buyer’s market – 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. Below are some of these mistakes:
Not Checking Out All The Options
Because of limited knowledge of the local real estate market or reliance 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 buckle under the 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-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
Very few people buy a home these days without bargaining with the developer – nor should they. This is a privilege that every aspiring home owner has, and it should definitely be availed of. 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 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’.
Not Factoring In Your Family’s Growth
A single bedroom flat or even studio apartment will doubtlessly 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 couples 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.
This is obviously not a complete list of the mistakes one can commit while buying one’s first home. But navigating away from the above-mentioned pitfalls is definitely a step in the right direction towards a satisfying and future-safe home purchase.
About The Author:
Kishor Pate is Chairman & Managing Director of Amit Enterprises Housing Limited, and the driving force behind one of the country’s most successful real estate development firms. A well-known and respected personality in real estate circles, Kishor Pate is also Honorary Secretary of CREDAI, Maharashtra.