Looking for the perfect home is as scary as it’s exciting. Just keep these 10 simple tips in mind when hunting for a house and you can avoid making an expensive goof-up.
Looking for the perfect home might seem exciting but zeroing in on the right home could give you nightmares. Sometimes, you venture out with the hope of finding a piece of paradise – as described on the real estate billboards — and are shown pigeonholes. End result – another shiny dossier turning into an ugly origami figure.
You might think the path leading to that perfect home is a treacherous one, often leaving you with the feeling that you were short-changed, but it’s far from true.
Just keep these 10 simple tips in mind when hunting for a house and you can avoid making an expensive goof-up.
Additional Reading: 7 Things To Consider Before Buying A Second Home
Tip 1: Know your budget
The process of looking for a house should start with you evaluating your bank accounts, cash flow, assets, and liabilities. Know what you can afford and then look for a piece of paradise that fits your budget.
A common mistake people make is, they lust after houses that are beyond their means, set their heart and down payment on one, and then check their coffers, which are more often than not underfunded. There is always a Home Loan to cover the deficit, but luxurious EMIs for a luxurious home will throw your daily budget in the doldrums. The rest of the story that follows is quite bleak.
So, always evaluate your budget before entering into any kind of a home purchase deal. Your budget should include your daily expenses, one-time payments such as insurance premiums and investments, and of course, your emergency fund. Once you have the expenditure list out in the open, use a Home Loan calculator to get a clear estimate of how much you can spare towards a Home Loan EMI.
Additional reading: Home Loan Handbook: All Questions Answered
Tip 2: Know your loan amount eligibility
You can easily determine the loan amount you are eligible for using an online Home Loan calculator. Though these figures are a fair representation of what you can ask for, they are not the final word. It’s always better to check the same with banks before finalising a deal with your favourite real estate agent.
There could be a significant difference between what you think you are eligible to receive and what banks think you are entitled to. Even a small difference can disturb your finances. Make sure you know the amount you are eligible to receive before settling down for that home.
Click here to check your eligibility for a Home Loan.
Check with your bank even if you have a pre-approved Home Loan. A recently taken Car Loan could change the dynamics here. Make sure that your Credit Score is good before you submit your loan application. There are many horror stories of loan applications and dreams coming crashing down because of a poor Credit Score.
Additional Reading: Effective Ways To Reduce The Interest Cost On Your Home Loan
Tip 3: What about the other costs?
People often think that buying a house is the end of all expenses. That’s far from true. Agreed, you won’t be paying rent anymore, but along with your EMI you also have to pay property tax, maintenance charges, and Home Insurance premiums. These charges amount to a tidy sum. So, when budgeting for a Home Loan, make sure to count these costs in. You can always skip the insurance bit to save a few bucks, but you’ll miss not having it when robbers pay a visit.
Tip 4: Be open to change
When you think of a house of your own, you are able to see it vividly with all the three balconies, tall French windows, and glossy marble flooring. Reads pretty too. But when you actually go scouting for houses you might find them lacking a balcony or two.
Such inconsistencies might drive you to keep looking for that ever elusive unicorn, or you could choose to make peace with your fantasies and settle for something realistic and pretty too. You might have to compromise on a balcony or ditch an extra room to stay within your budget, but that’s not too bad.
Taking too long or being too picky is not a good way to look for a house. You might lose out on good deals. By the time you return to that nice spacious house you had rejected for having one less window, it could be donning a sold-out board or worse, it could cost much more than it had earlier.
It’s good to know what you want when searching for a house but don’t let a few shortfalls impact your decision. If you are determined to get nothing less than the house of your dreams, then you can continue living in your rented space, saving up aggressively to pay for that extra 1,000 sqft. But do factor in inflation. Your savings will increase and so will the cost of the property.
Additional Reading: Should I Buy A House Or Continue Staying On Rent?
Tip 5: Don’t get carried away
It’s only fair to want to drape and decorate your new home in brand new fabric, furniture, and décor. But is the idea feasible? Buying a home is an expensive affair and decorating is no less a monster.
Carrying your old furniture to your new home is not really a bad idea. In fact, you can use the décor money to beef up your down payment stash. Think of how much money you’ll save in interest when you borrow less.
New furniture and all the other creature comforts can follow gradually.
Tip 6: See through the drama
As it is, property prices are pretty steep and to add to it, builders further spike up the prices by making some cosmetic fixes to the apartments. True, these fixes can really change the look and feel even of a basic apartment, but are these additions really worth it?
No matter how unique or special these fixes might look, you can get them done for less than half the price quoted by the builder. Don’t pay a premium when purchasing a house; buying one anyway is one big deal. You can hire an interior designer to get the fancy lights done or you can do it yourself. If the internet can teach you rocket science, it can definitely teach you to make electrical and plumbing fixes.
Additional Reading: Home Makeover On A Budget
Tip 7: Pick and choose
We did ask you to keep a flexible outlook when looking for a house, but don’t let this result in poor choices. If you have a big family then buying a 3BHK makes perfect sense. You don’t want to feel cramped in your own house. Likewise, if you are a nuclear family a 2BHK is more than enough.
Make a list of things you are not willing to compromise on when buying a house. This will allow you to make the right decision. Do you want a house in the suburbs or something bang in the center of the city? These are some basic choices that should govern your decision. A house that makes you unhappy and gets you irritable is not worth it.
Additional Reading: Real Estate Investing 101
Tip 8: Keep an eye out
This is especially true if you are purchasing an under construction property. Builders will promise to finish the work at lightning speed, but in truth, it takes an entire age. If you have made down payment on a property then make sure to visit it regularly. Keep a tab on the construction and ensure that it’s coming up as per the plan. If you sense something going amiss then speak with the builder. It’s your right to know what’s wrong. Find out the causes for the delay.
If you are looking to purchase an already constructed house make sure you survey the house well. Look out for damages that might be hidden behind pretty wallpapers or an expensive painting. See whether the house is in need of extensive repairing. Being aware of all these things will help you understand the value of your investment and save you from making a foolish investment.
Tip 9: Find your own agent
It’s simple. A property seller’s agent will do all that he/she can to sell you the house. They’ll speak most cheerfully about the property and will try every tip and trick from the ‘How to sell a house’ book to close the deal. There’ll be a well-crafted answer for your each and every query. You’ll never know about the perils that strike the property and its adjacent areas in monsoons, or about the water pipes that run dry in the summers.
If you really want to know all the secrets of the property you are looking to buy then hire a property agent of your own. You’ll have to pay a fee, but, at least the guidance will be true and one in your favour.
Additional Reading: Co-Borrowing A Home Loan: How Does It Work?
Tip 10: A look into the future
It’s never possible to predict the future, but it’s possible to learn if an airport or an IT tech park is scheduled to be opened near the property you are looking to purchase. Information of this sort can really help you take the right decision. A neighbourhood that is poised to grow will also set your house prices soaring. Likewise, try to find out about any unwary developments too.
With these questions answered, you can make the purchase a lot more confidently.
Bonus Read: Home Loan Handbook: All Questions Answered
Buying a home will perhaps be your most expensive transaction of your life. We understand a lot of things can go wrong, but armed with sufficient information you are sure to make the right choice. Getting the right Home Loan is as important as finding the right home. We want to ensure that getting the former is the easiest part of your home buying journey. You can search and compare from a range of Home Loan options on our website and pick the one that’s best for you.
When looking for a home, search for one that you could see yourself living in for several years — at least five to seven years is ideal. Buying — and moving — to a new home takes a lot of time and effort, and can add up significantly in closing and moving costs, etc. Staying in place longer will help you avoid those added expenses. Plus, the extra time spent in your home could be just enough to help you ride out a downturn in the real estate market.
Totally agree with your thoughts. Have a nice day!