6 Mistakes You Should Avoid While Buying A House

Buying a home is a once-in-a-lifetime event for most of us. Celebrated as a major life milestone, buying a home is universally viewed as a sign of success and growth. However, the process of hunting for the perfect home can be a daunting one. Many things can go wrong, especially for first-time buyers. That’s why recognising the possible mistakes you should avoid while buying a house can help you stay ahead of the curve.

Getting your budget wrong

One of the primary mistakes to avoid while buying a house is to get the budget wrong. The cost of a house depends on factors like the location of the house, its condition, and size. Setting a wrong budget or overextending it can make the house hunting process even more difficult. Being unsure about how much you can afford can lead to financial troubles. For instance, you select a house worth Rs. 1 Crore assuming you can secure a bank loan worth Rs. 85 Lakhs and self-finance the remaining Rs. 15 Lakhs as down payment. However, the bank offers a lower LTV of 70%, sanctioning a lower loan amount of Rs. 70 Lakhs. In this case, you will have to dip into your savings and investment pool to finance the Rs. 30 Lakh down payment amount. Similarly, you must also evaluate the additional expenses involved in purchasing a new home, including furnishing, painting, masonry and carpentry work, etc. The key is to estimate all your expenses, including EMIs, moving expenses, and general living costs and not just the cost of the home. One pro tip is to start investing in mutual fund schemes early to save-up for your home-owning goal and meet your required budget without any compromises.

Not thinking about the future

The absence of foresight remains one of the most crucial mistakes to avoid while buying a house. You must consider the implications of buying a house on your monthly cash flow going forward. Most first-time homebuyers resort to home loans to finance their purchase. This means paying hefty EMIs that take up most of your monthly cash inflow making it almost impossible to fulfil any other goal like buying a new car or going on a vacation. You must remember that as days go by your family will grow and your responsibilities will increase. This means education expenses for kids, medical expenses for parents, and more. Remember to consider these needs and prioritise your goals accordingly.

Being too picky

Being too picky is a common mistake you should avoid while buying a house. Every home buyer has their own vision of the ‘dream house’ with aspects like spacious and well-ventilated rooms, high ceilings, and marble floors. However, when you are shopping for a house on a budget, chances are you won’t be able to find a house that ticks all the boxes on your checklist. In simple words, you need to be able to make necessary compromises on your dream house vision to accommodate reality. While it is wise to create a list of desired features for your home, it's equally important to prioritise them. This helps you distinguish between negotiable and non-negotiable items. For instance, you may want a house with a balcony in an area free from hard water supply. Let’s say you do find a home without hard water but lacking a balcony. Initially, this trade-off may seem challenging. However, avoiding hard water supply can be substantially more beneficial for you in the long-run since soft water has a significant impact on your health, prevents rusting of fixtures, and reduces wear and tear on clothes.

Failing to inspect

If you do find a house that fits all the criteria on your wishlist, it's easy to get emotionally attached and swept away by the property. However, this is one mistake you should avoid while buying a house. You should never avoid inspection even if the house is perfect. Thorough inspection of the property helps you locate potential repairs and save money in the long-run. Looking for things like ceiling leaks, plumbing issues, and general repairs is crucial before you make an offer on the house. Sometimes builders want to sell flawed houses to buyers at a discounted rate. Be weary of such discounts as they may be shrouding significant future repair costs.

Not reviewing the builder’s reputation

First-time buyers often forget to review the reputation of the builder. The builder’s reputation is generally an after-thought for most buyers with the location, amenities, and cost of the property taking centre stage. When you buy a house from a reputable builder, you are assured of the building’s legality, loanable nature, land title deed, registration, taxation, and other things. Additionally, a builder with good reputation also ensures strong quality of construction meaning less frequent repairs in the coming years. If the house is still under construction, you can rest-assured about timely delivery and zero delays. Conversely, purchasing one from a new builder or one with a poor reputation might help you save money but it can result in quality compromises, legal issues, loan problems, possession delays, and more. Therefore, purchasing a house from a builder with poor reputation remains one of the gravest mistakes to avoid while buying a house.

Getting trapped in the contract

When you purchase a house, you should read the contract thoroughly to ensure nothing is missed. In the excitement of buying a home, most first-time buyers peruse through the contract papers but fail to read through the fine-print. The fine-print may include unfavourable terms like undisclosed repair costs, hidden fees, wiggle room in the possession date, and more. Reading the contract ensures that you are well-aware of all the terms and conditions of the transaction. It is best to hire lawyers to negotiate your contract and review the papers before you sign them.

• Setting a wrong budget, overstepping your budget, or forgetting to factor in future needs can jeopardise your house buying experience.
• Being too picky can cloud your judgement about good properties.
• Failing to review the builder’s reputation and conduct thorough inspections can result in mounting repair costs in the future.

Buying a house is a big-ticket purchase that requires thorough deliberation and careful execution. Whether you are a first-time buyer or an experienced one, you can always be susceptible to mistakes while buying a house. Keeping the above list handy can help you avoid key mistakes while buying a house and make this life altering event of becoming a homeowner much more enjoyable.

Purchasing a home is not just an emotional decision, but also a financial one. Mutual fund investments offer a great way to save up for this crucial financial goal by leveraging the power of compounding. To start investing in mutual funds for your home owning goal, you should choose the Bajaj Finserv Mutual Fund Platform. This smart platform lets you compare 1000+ mutual funds, review performance, and estimate returns using the Mutual Fund Calculator tool, all through a few easy clicks! With the right mutual fund investments, you can fulfil your home-ownership goal faster.