Mistakes to avoid while purchasing your first home


Are you planning to buy a new home? Then there are certain things you need to know to avoid the common mistakes people make. There is no harm in knowing these as it will help you be prepared for successfully achieving your dream of having a home of yours.

Introduction

Having a house of our own is almost everyone's dream. Some would prefer a villa and some prefer flats or apartments. Whatever is our choice, at the end of the day we all need a shelter to stay. Even though certain people like to have their house constructed, there are few who would want to buy their dream home. This article will be useful for those who are intending to buy a house for the first time. Be it anything, we tend to make mistakes when we are doing it for the first time. That rule applies here as well. One need to consider many factors before ending up in a purchase decision. Never compromise on your needs or dreams for money. It is we who make money, hence we use it to cherish our dreams. But that does not mean we should waste our money on a house which is actually not worth it. Read on to know the main mistakes one can commit while buying a new home.

Buying a house is a long-term investment, hence we need to look at the long-term benefits as well. It might sound simple but actually is not. It is not like buying a car as people exchange it in another five years time or so. That is not the case with a house as normally, people do not sell it off easily. It is a place for us to stay, hence we should not miss out on inspecting even a minute thing. Another thing I would add is, there is a trend that people follow others just to show off, but that is really not going to help you. One should first understand what he/she needs and accordingly choose the right house as changing it is not that easy as I mentioned earlier. Also, consult with your family before making a purchase in order to understand their tastes and preferences too. Now, let us look into the mistakes people might commit.

  1. Not knowing your need and budget: The first thing one should do when they start planning to buy a house itself is to estimate their budget. For that first one needs to assess the requirements he needs and the type of the house he is looking for. There is no point trying to be like your friends or neighbors. Peoples capacity and income differ hence everyone cannot afford the same house. Understand that the money invested can be considered only as dead money as it is not yielding you any benefit. Only when you sell the property, will you get monetary benefits. Keep all these facts in mind and coordinate with your spouse and family members and decide what all features you need in your house, how many floors it should have, the location and so on. Based on that, make a budget and figure out the estimated cash in hand. Also, find out the best feasible ways to arrange the rest of the amount. Only then proceed with purchasing or taking a decision. Some people think that they will arrange the funds somehow, these people are approaching it without a proper plan hence can end up paying high interest or in incurring a loss


  2. Avoid taking loan for the full amount: We know that housing loans generally come with a slightly higher interest rate. Hence taking the full amount as the loan would definitely is not a wise idea. You will end up paying more when the actual value was comparatively less. Owning a house is everyone's dream. Also, the dream does not happen suddenly. So start planning and saving for a house right from the start. The moment you get the thought of having a house, you should start keeping aside some money for it. The earlier the better. So that, by the time you actually find a house and is about to purchase it, you will have some amount for it. Only the balance has to be paid off by taking a loan. If you can, reduce the tenure of the loan it would be good as the bigger the tenure, the more you will have to pay as interest. Also, one should consider other alternatives to arrange finance like mortgage, a loan from FD and so on. Always search for the various options available and calculate the interest rate for each and accordingly go for the right one. Never give yourself a chance to regret later


  3. There will definitely be additional expenses: One of the biggest mistake people do is they ignore the additional expenses which are likely to arise and just find funds for the value of the house. But that alone is not going to solve your financial needs. We need to understand that there will be additional charges like document charge, property tax, maintenance if required, expenses to modify the house according to your taste and so on. Sometimes, only the building will be available for sale, hence you will have to get all the required furniture, utensils, electronic equipment etc if you do not have it already. We should think about all the possible charges that might arise and accordingly arrange finance or else we will struggle towards the end. Distinguish between expenses that have to be paid immediately and that can be postponed. Things like maintenance and getting furniture can be delayed if you do not have sufficient money now. But property tax and documents charges are to be paid during registration itself. Accordingly, plan your tasks and arrange money rather than mixing up everything together and pushing yourself into a great debt


  4. Know the quality of materials used: It is very important you know in and out about the plot and house, you are going to purchase. There are people who construct a house with an intention to sell it off and they might use low-quality products so that they can maximise their profits. Don't fall into such traps. Have a careful analysis of the materials used in building the house and also the materials used inside the house. If cheap quality materials are used, the value also should be low and vice-versa. Once you come to know that the quality of materials is not very great, it is better you back out. As you are buying it for living there and as a long-term investment, it is better you go for quality products. Never compromise on the quality just because you are getting a house for a cheap rate. You will regret later as the maintenance cost will be more


  5. Consider the surroundings: It is the place where you are going to live, the rest of your life. Hence, a proper analysis of the surroundings is to be done. If your house is very close to the road, find out about the future road development plans in the area as it might affect your courtyard or even the building. Secondly, check out the amenities available near the place, so that it will be convenient for you when you start staying there permanently. Having an idea about the neighbors, people around etc are also essential as they are the ones with whom you should mingle later. Who would want to have a criminal or a thief staying next to their house? Also, it is good if you have some relatives or close friends in that area, as you never know when you will be in need of help. Otherwise also having someone close is always a good thing. Carry out a proper research and don't be in a hurry. Go for a deal only if you are cent percent satisfied


Conclusion

Buyers, please be careful of the clauses in the deed too. Never be in a hurry, there is a time for everything and you will definitely get it when your turn comes. Until then our duty is to search for good and reasonable ones. If you have an agent, they will know many houses which are for sale and they will show you the pictures and accordingly you can select the best ones and further see it physically. In case you do not have an agent, and if you are intending to buy one near your present home, speak to your friends in the locality, so that when there is something available, they will let you know. Act smart so that you will not end up wasting your hard earned money.


Comments

Author: umesh28 Dec 2017 Member Level: Gold   Points : 4

A very informative article telling us the important things we must consider while constructing or purchasing a home.

I will like to add here that there are certain locations which appear deserted or barren on the first look but when you inquire in detail or get information from local development authority you find that many educational institutes and business complexes are coming up in that area. If it is so, the area becomes lucrative and prospective from the future property price escalation as well as increased rental value point of view.

So it is not only the apparent present location but also the future developments in the area which is also a matter to be considered while buying a property.

Author: Natarajan31 Dec 2017 Member Level: Diamond   Points : 10

It's a great Indian dream to have a roof over our heads. Buying or owning the first house is an important emotional, social and financial milestone for the family. Many families in South India, still prefer a bridegroom's family with an own house than a rented house.

Buying a home incurs a major financial commitment that is often met by a home loan with a down payment.Many people stick to the traditional concept of trying to earn a lot, have money in hand and then buy with a little loan to cover up the deficit. But in this process, people often find that the property prices grow faster than they have estimated.

Some buy a house as a pure investment tool and not to live in. This may not be attractive as you cannot sell the house in a hurry to take the money out for your needs.

Buying a house or an apartment is only the first step, there is a list of anticipated expenses right from registration to the time you move in to live, even these have to be included in the initial budget as it's too much of a hassle to find the source after just agreeing on a sale.

If you are buying a flat, go for a reputed builder who has a good project completion record, rather than a small budget local builder. Also, select a project that has all the approvals with no encroachment and one that has already had some bookings and loans sanctioned.

Be cautious about the private banks that are linked to apartment builders. Although they make things easy, it is always safer to go for a nationalized public sector bank rather than a private bank.

It is imperative that the buyer scouts the area and the locality of the house and the apartment complex, looking for access roads, garbage dumps, slums, bus and metro stations etc. Select an area that is neither too overdeveloped or crowded (because the price will be too high and residential experience will be below average) nor too much on the outskirts for safety reasons.

Please don't get mislead or fooled by builders who build upon lakebeds and large stormwater drains, handover and later residents have to fight a long legal battle.

Many people in India believe in Vaastu and other land traditions, if you follow this, then please check all this beforehand rather than buying and then making alterations. Lastly, think before committing to buy, once you buy don't be in a hurry to sell.



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