And that’s why most times it becomes an emotional decision, rather than a decision backed by sound planning.
While a real estate investment is one of the largest financial transactions one makes, we have found that many home buyers are poorly prepared to ensure that they make a good purchase decision.
Don’t worry it’s not all your fault.
The prospect of owning a big, fabulous villa can render the best of us emotional and naïve, leading to cloudy and hasty decisions.
To help you avoid making any faulty decisions, we have put together a report of the top 5 mistakes people make when buying a villa.
Read on, to learn how to avoid these mistakes.
1. You don’t fix your spending limit and end up overstretching your budget:
When you are dealing with large financial figures, we there are a lot of things that we forget to factor in. Analyzing your budget and planning your finances is very important. More features and amenities might excite you, but it would make sense if you stick to your budget. Ensure you have budgeted for all the hidden costs as well.
Tips for good financial management:
- Get a pre-approval for a loan before beginning your property search. This way you have a limit to observe and can avoid taking on too much debt.
- Determine your down payment and all the closing costs and save enough to meet them.
- Clear all your existing loans and debts with a satisfactory credit score.
- List out the liabilities of the next six months, like kids tuition fees or Insurance Premiums and keep reserve to fulfill them
- In life you don’t know when things go awry, so always keep 3 months of your EMI payment as reserve.
- Maintain a separate budget for home furnishings and interiors.
- A regular source of income is mandatory when you are buying a home. In case you are unsure of job stability, postpone your home buy.
2. You don’t double check the legalities:
Unlike most apartment projects, villa projects are set over large land formats. And when it comes to large townships covering many acres of land, you have to be double check the legal paper work like the parent deeds and the history of the land. The land should not be subject to any property /ownership dispute and have clear titles with all the necessary approvals.
Handy Checklist of documents you need to double check on:
Sale deed, Khata certificate, Tax paid receipt, Joint development agreement, Loans from bank, Encumbrance certificate, Sanctioned building plan, Electricity/ water bill receipt, Maintenance no dues, NOC, Sale and construction agreement, Registered previous agreements.
Most importantly check on:
- Approvals by at least one leading bank of the country
- Approval by the government authorities
- Delivery of past projects
- Feedback of existing buyers of the quality of the product.
3. You don’t check on the construction quality:
Again unlike apartment complexes that are built as one complete unit, a villa construction is different. You need to be constantly checking with the builder on the progress of your villa and the quality of construction materials used at every stage.
Tips for checking quality:
Fix dates for construction inspection and talk to the architect and project management team of your builder regarding the materials used. Also look out for any electrical and plumbing issues that could arise in the future.
4. You ignore the reputation of the builder:
Most people tend to chose unknown builders as they sometimes offer cheaper products. However this is a grave mistake when it comes to home buying. There have been instances when the builder has constructed poor quality home and or swindled people of their money without even completing the home.
Qualities to look out for in a builder:
Do your background research on the builder to ensure you are not buying from a builder of dubious reputation. In order to earn trust in a heavy duty industry like the real estate, a builder needs to have established himself through formidable years of service in the industry, had a host of successful and completed projects to his name, should have timely delivered quality projects, received positive testimonials from his clients as well as the media.
5. You get too optimistic about the development/ location
Since villa townships are located on large sects of land, they generally tend to be located very far from the city. Most people invest their villa buy thinking the development would take place in a matter of months, and by the time they move in it would be a bustling locality. This unfortunately is not the case.
How to save yourself from disappointment:
To begin with, look for areas with potential for development. Track the potential for connectivity like development of metro or flyover. Also look for news of upcoming schools and hospitals in the vicinity. Most importantly be patient. Bangalore is a growing rapidly, so in a couple of years you would definitely witness the development in your area.
If you have made some to these home buying mistakes, or know of someone who has, please comment down below and share your experience with us.
Lakshminarayan is a property advisor with over 23 years of experience in providing dedicated personalised services to over 30000 Bangaloreans. He has worked with a diverse clientele and applied his strong micro market knowledge towards executing many property deals.
Lakshminarayan currently serves as the Manager of Sales at Vakil Housing.