10 Common Home Buying Mistakes To Avoid

1. Think That Every Home Is Negotiable In Price

Shahnawaz Hussain, a real estate agent in Dubai who only deals in residential property prices starting from AED 2 Million, has revealed that 80% of home buyers think that they can negotiate everywhere.

But there are many residential communities in Dubai from reputed developers like DAMAC Lagoons, Dubai Creek Harbour, Downtown Dubai etc. where the price of the properties are unnegotiable. But quality construction, price appreciation and best rental are guaranteed. 

Shahnawaz Hussain said, “if you are buying a studio, apartment, villa or townhouse in any of these communities then you should close the deal because prices are reasonable and unnegotiable here.” 

2. Only Believe In Overhyped Details And Ignoring Quality

Shahnawaz Hussain said, “I always advise my clients not to be manipulated by overhyped details of the property given on brochures and online advertisements. Yes, they are important but not more than the quality of construction & finishing.” 

As a home buyer, you should pay more attention to the building’s overall construction. There are many attractive properties that are artificially manipulated to look attractive from the outside but hollow from the inside. So you need to focus on the basic structure of the building.

3. Only Focus On Specific Property Type

According to the real estate agents, many homebuyers stick with certain types of residential property. For example, many home seekers just want to buy apartments or villas and nothing else. Here the point is, that sometimes we miss a better deal on villas while we are just looking for an apartment. “In search of gold, we lost the diamond.” 

4. Not Checking Eligibility For Home Loan

These days everyone buys a home with a home loan. But only a few individuals check their home loan eligibility. There are two things - you are eligible for a home loan or not. If you are eligible then you need to find out what kind of home loan you are eligible for. This depends on your income and many other factors. Before finalizing any residential property you need to keep in mind this point as well. 

5. Not Paying The Largest Down Payment As Possible

Thomas Peterson, a real estate investment advisor in London who deals in properties starting from 825K Pound said, “the most common mistake that almost every property buyer can make is only paying the lowest down payment.” 

If you are capable then try to pay as much as possible down payment of the property. By doing so you could significantly cut your fixed monthly EMI. For this, you can seek financial help from your family members or friends.

6. Buying Property When You Are Already In Debt

We advise you not to think about home buying if you are already in debt or financially committed. A small debt can affect your buying behaviour and when you are going to take a new big financial commitment like home buying then you must think twice. 

A family man is already under lots of burdens like education loans, car loan fixed and monthly bills. With an extra burden of down payment and home loan EMIs putting you just one emergency away from not being able to pay EMIs and making you a defaulter. 

Fixed monthly home loan EMIs with other debts make you feel like participating in a race with heavy ankle weights. Reaching the finish line will be very tiresome for you. And in the last, you have to compromise with your other goals like travelling, after retirement life plan and lifestyle. 

If you are in the same condition then you should hold the home buying plan and clear your other debts first. Then start saving and start hunting when you are ready to buy. 

7. Buying An Unaffordable Home

Many novice home buyers and real estate investors think, “Maybe the price of this property is out of budget, but it is perfect for my family. All I need to do is just take a big home loan.” 

A blunder mistake you are going to make. Taking a big & unaffordable loan is like go for swimming in the deep sea without any safety jacket. You will have to downgrade your existing lifestyle and say goodbye to many things.

So before taking any decision on home buying, you must calculate how much you can afford. According to the experts, your home loan EMI should not be more than 25% of your in-hand salary.

8. Buying Without Real Estate Agent

Countless real estate apps and online real estate web portals are available these days making you feel that you don’t need any assistance from real estate agents to buy property. But an experienced real estate agent can help you very much like:-

• Providing the latest & reliable information on the real estate micro market. 
• Looking for property on databases that an inexperienced person cannot access. 
• Try to find the best offers, best price and easier paperwork 

Here the best thing is that the seller usually pays the agent’s fees or commission, so as a buyer you will get all these advantages for free. 

So, all you need is an experienced real estate agent to smoothly navigate your home buying process. One more thing, before selecting the best real estate agent you should interview at least five real estate agents. And then choose the best that is trustworthy, experienced and always available for you. 

Because home buying is one of the biggest purchases of everyone’s life and you cannot rely on any real estate agent who acts like just a salesman. 

9. Unprepared For After Homeownership Costs

There are certain costs that every homebuyer needs to pay just after homeownership like - property tax, homeowner insurance (not valid in many countries), fittings & fixtures costs etc. Maybe the first time all these costs are included in property value but after a year you need to pay all these separately. As well as, after a couple of years every home needs repair and maintenance (especially if you buy a secondhand home). 

Here we suggest you do not spend all your funds on home buying, keep aside some money for these after-homeownership costs.

10. Underestimating Resale Value

Right now you are thinking like an end-user and buying property for your family and the resale value of the property is not an important aspect for you. 

You are making a big mistake in your life…

Circumstances can change anytime and after a few months, you might be in a condition where you need to sell your property immediately. This is the time when the resale value of property matters. So keep this point also in mind and always check the property price trends of that particular location.

Conclusion

During home hunting, most buyers just think about the facilities, amenities & specifications of the property. But we also need to pay attention to the common mistakes during home buying. If you know about these mistakes then you can deal in a better way.