Buying a property is not easy, no matter what agents and real estate advertisements want us to believe. And buyers, especially first time buyers, make umpteen mistakes in the process. Rather than paying a high price for the learning process, a few simple steps can help buyers make a good purchase. The first step to learning is to know what the mistakes are and how to rectify it.
Promotions and opinions disguised as advice is rampant and we tend to go by into it. Imagine this. A medical student tells you a great story on how a complicated heart surgery can be performed. Would you trust him to do it for it? Would you take the advice of your car cleaning person to replace the engine? Hopefully you said no (if you said yes, I have a great scheme designed for gullible people. Please call me!). But we buy on advice from friends and relatives without doing our homework.
Misleading testimonials and anecdotal evidence are rife and often buyers are influenced by the images or promises. They do not dig for the truth as unbiased independent information is not readily available. Free advice is only worth what you pay for it.
So before buying, see advice from trusted sources on developer credentials, neighbourhood intelligence, project features, total all-inclusive costs and legal aspects. Talk with credible folks and seek data and the source of the information and avoid opinion based conclusions or gut feeling alone. The data you must go by should be based on your purpose in buying the asset – is it for a primary residence, rental property or an investment. The parameters you weigh would be different in these cases.
Buyers get taken-in by grand visions of development that is projected to unfold and make the locality nothing short of heaven-on-earth. Above all, hope that the property will give double the investment return within a year or even six months, if lucky. Often these expectations are formed by anecdotal evidence from a friend-of-a-friend who made windfall gains with a ‘timely’ investment.
Sadly though, our stars are never that lucky. Investors are disappointed if price appreciates slowly and end-users are frustrated with lack of even basic amenities such as water and drainage even after a few years of moving into a new area. What about the highway project and the IT park development that was going to come up?
The fact is that given the way our governments (don’t) work, it is not wise to bet on immediate sure-fire growth, unless you want to speculate. It helps if you have a realistic assessment of when infrastructure projects may start and complete and the timeframe for the other growth drivers to play out.
Property owners may also get into trouble as they forget the simple warning – buyers beware. Misplaced trust – on intermediaries such as property agents and developers – can lead to a lot of pain. Hurrying into an agreement without thorough checks and not bothering to read the fine print often leads to regretting in leisure.
Legal checks on the property and ensuring the agreement is not one sided may seem like basic things buyers must do, but they often skip these and trust that other buyers would have done it. You can be the one-eyed person who wants to verify everything when others are being blindly trusting. Do not be naïve, it is ok to dig deep, ask a lot of questions to assure yourself that there are no legal issues in the purchase.
Knowing the common but critical mistakes in property purchase can make you aware of what you need to do and gain knowledge to do the right things. Property purchases are big ticket buys and it pays to be sure and not take any short-cuts.