9 Costly Mistakes Home Buyers Make and How to Avoid Them

Introduction

Buying a house is one of the most significant financial decisions in a person’s life. While food and clothing can be easily replaced or altered, a wrong decision in purchasing a house can have long-lasting consequences, leaving you stuck for 10-20 years and affecting your financial goals and mental well-being. In this article, we will discuss nine costly mistakes that first-time and even experienced home buyers make, along with a bonus tip to help you navigate the home-buying process more effectively.

1: Emotional Buying

• Many people start looking for a house under the pressure of family, friends, or peers, forgetting that their life goals, financial goals, and financial situation may differ from others.
• Solution: Set your financial goals and write down your requirements clearly before starting your house search. Approach the process logically and practically, rather than emotionally.

2: Improper Budget Planning

• Failing to check home loan eligibility, calculate comfortable monthly EMI, and reverse calculate available down payment can lead to financial strain and loss of opportunities.
• Solution: Understand that banks approve home loans for 75-90% of the home value, and your self-contribution will increase as the home value increases. Plan your budget accordingly.

3: Wrong Timing

• Starting a house search too early when expecting funds from selling another property can lead to missed opportunities and panic when the market changes.
• Solution: When selling a house to buy another, research properties 10-15% below your budget to have a backup option if prices increase during the selling process.

4: Not Accommodating for Additional Costs

• Overlooking expenses such as stamp duty, registration, transfer charges, broker fees, renovation costs, and interior expenses can strain your finances.
• Solution: Budget for an additional 10-15% of your house value to cover these expenses.

5: Not Knowing and Sharing Your Requirements

• Lack of clarity about your housing requirements can result in missed opportunities and difficulty in decision-making.
• Solution: Be clear about your requirements from the beginning and share them with brokers or developers to ensure you find the right property.

6: Seeing Everything

• Viewing properties far above your budget can waste time, cause loss of opportunities, and make decision-making difficult.
• Solution: Focus on properties within your budget to avoid unrealistic expectations and simplify the decision-making process.

7: Lack of Self-Research

• Failing to research a project’s infrastructure, developer’s track record, and project details before site visits can lead to uninformed decisions.
• Solution: Conduct self-research before visiting sites to ask the right questions and gather accurate information.

8: Falling for Offers and Discounts

• Being influenced by attractive offers and discounts without proper due diligence can lead to hasty decisions.
• Solution: Evaluate the developer’s credentials, location, and project details thoroughly, rather than basing your decision solely on offers or discounts.

9: Ignoring Government Plans and Subsidies

• Overlooking state or central government housing schemes and tax benefits can result in missed opportunities and deals.
• Solution: Research and take advantage of government plans and subsidies to potentially benefit from interesting opportunities.

Bonus Tip: Document Your Journey

• Keep a diary and pen to document your entire house search journey, including requirements, evaluations, and decision-making processes.
• This documentation will help you make informed decisions and avoid confusion when comparing multiple properties.

Conclusion

By avoiding these nine costly mistakes and implementing the bonus tip of documenting your journey, you can save time, energy, and money in your home-buying process. Remember to approach the decision logically, plan your budget carefully, know your requirements, conduct thorough research, and take advantage of government schemes when applicable. With these insights in mind, you’ll be better equipped to navigate the complex world of home-buying and make a sound financial decision that benefits you and your family in the long run.