Congratulations, you’ve just bought your first home – a very exciting and thoroughly overwhelming accomplishment. Buying your first home can be a long and confusing process with many moving parts, especially for those who have never done it before. If you’re not careful, you may find yourself agreeing to terms that you later regret and ultimately end up losing thousands of dollars to the process. Here are the things to watch out for on your first home purchase.
1. Not Setting a Clear Budget
I THINK THE ONE THING FIRST TIME BUYERS MISTAKE IS LOOKING FOR APARTMENTS/ PROPERTIES FIRST AND FOREMOST, THAN THINKING ABOUT THE BUDGET. They are so amazed at the price of the property, and the other costs such as stamp duty, registration charges, maintenance costs that the property will attract in future, brokerage charges and also the costs of furnishing the apartment always escape them. It is usually at a later stage that they realize that they have made a terrible error.
The cost of a printer is not necessarily the same as the affordability of that printer. You have to look at all of the costs that will be associated with the printer over its lifetime.
2. Ignoring Loan Eligibility and Pre-Approval
Occasionally buyers purchase a property before having their affordability for the bank loan confirmed. When the bank then lends less than the purchase price of the property, there can be some disappointment.
Real Estate Tips: Get Pre-Approved Before You Start Looking When starting your search for your dream home, it’s a good idea to get pre-approved for a loan before you start viewing properties. This will give you an idea of what price range you can afford to look in, as well as a bargaining chip for negotiations with the vendor or agent.
3. Choosing Location Emotionally, Not Practically
First time buyers are often swayed by the design and condition of their new home and can sometimes neglect to consider the location. What ultimately proves to be important to the value of the property is the combination of the house and where it is situated. You need to consider factors such as the schools, transport links, the local area, whether there are adequate amenities and whether there are any local issues that may be a concern to future tenants.
Tip: Consider the location of the property in relation to the things that matter in your life, including work, schools, hospitals, transport links and even restaurants, and think about where the area is heading and the potential for capital growth.
4. Skipping Legal Verification
LEGAL MATTERS OVERLOOKED CAN BE VERY COSTLY. Uncertainty of land title, unauthorised building and approvals not obtained can all turn into a legal minefield.
Real Estate Tips Tip: Always get all documents in place like title deed, RERA registration, approvals, occupancy certificate, before you start paying for a property.
5. Underestimating Maintenance Costs
We all know that buying a home is not just a one-off cost. Many first time buyers do not realise just how many extra costs there are. These can include maintenance fees, society charges, repair bills and so on.
Strata maintenance charges can be quite high so you should budget for them. Tip: Ask the real estate agent for the estimated strata maintenance charges before you buy.
6. Not Comparing Multiple Properties
There are so many things to consider when home shopping that often the urgency of purchasing a home can cause some buyers to rush into a purchase of a home after seeing it only a time or two. Often times buyers will rush into a purchase of a home that is priced higher than what they are comfortable with or they feel pressured by their agent to act quickly in order to secure the property. Ultimately, rushing into a home purchase can result in a property being purchased that is not the right fit for the buyer.
TIP – ALWAYS DO YOUR RESEARCH When searching for a rental property, always make sure to compare at least 4 – 5 properties in the same area to determine fair market rent.
7. Overstretching Financial Limits
Buying a home that you cannot afford or having to buy a home that causes a huge increase in your EMI is a constant stress point for you and your family for years. This is a common mistake first time home buyers often commit.
Tip: Ensure your EMI does not exceed 30–40% of your monthly income.
8. Ignoring Builder Reputation
Many times when we decide to buy an apartment in an under construction or new launch project, there arises a dilemma regarding the choice of the developer. It is very important that we take right decision, because a wrong choice can lead to a host of problems like delay in completion, bad quality of work etc. Therefore the choice of the developer should be given utmost importance.
When choosing a company to hire for your construction job, there are a few things you should look for. First, you should research the company and the quality of work they do. Researching the company and their work will allow you to learn more about their past projects, the estimated construction time for large projects, the materials they use, the qualifications of their employees, and the length of time they have been in business.
9. Not Thinking About Resale Value
First time buyers are more concerned with the immediate needs of the property, rather than its potential future value. It is usually later buyers who take into account such matters as the location of the property, its amenities, the demand for such properties in the market and many other similar factors.
Tip: Choose properties in developing areas with strong appreciation potential.
10. Letting Emotions Drive Decisions
Buying a home is an emotional experience and perhaps one of the largest emotional purchases we will ever make. While emotion must certainly play a role in our decision, it should not be the sole determining factor in our purchase. Ultimately, decisions made based on emotion and not fact and analysis will result in poor financial decisions.
Tip: Balance emotions with logic—evaluate property value, location, and long-term benefits objectively.
Final Thoughts
Buying your first home can be an exciting time and a lot to take in, so here are a few things to bear in mind in order to make sure you get the best deal and to enjoy the best of owning your own home.
If you are research oriented, patient and mentally focused, the very first property you buy will be more than just a transaction.
