Buying a house is one of the most important decisions and probably the main investment in the life of most People and, nevertheless, the same mistakes are made very often. Buying a house means making a great economic effort and at times, it is committed for a good part of life.
After years of crisis, the real estate market is catching its breath. In fact, in recent years there has been a recovery in sales and banks have started to lend again. These factors, coupled with mortgage rates that continue their decline, can make this the right time to venture into buying a home.
Construction Companies DHA Lahore tell you about common mistakes that people do while they are buying a house.
We have discussed the 20 most common mistakes people do when they buying a house as follows:
1. Generally you don’t do the math well According to various international studies, we have no financial culture. Buying a home is the biggest investment for many people, yet we don’t have adequate financial preparation to deal with it.
2. Many forget that about 10% must be added to the price of the property. In addition to VAT (if the house is new) or the registration tax (if the house is second-hand) there are land registry taxes. Without forgetting the possible deposit, which, although it is recovered (we do not go into the problems that arise when it is not recovered), is still a significant outlay.
3. You do not count on the mortgage, which also involves expenses and taxes. The mortgage tax is generally worth 2% of the loan amount, without forgetting that many banks want mortgage insurance, which serves to protect against risks such as the loss of a job or the death of the contractor. It is useful, but it costs, and not cheap.
4. Taxes and Extra Charges The buyer forgets that owning a home means paying monthly condominium expenses and other extras that can significantly increase the price. Houses need maintenance, not to mention common expenses (facade, antenna, elevator, etc.). In the case of an independent house, the costs are even higher.
5. Money for furniture and contingencies When a budget is made (or should be done), the expenses for the furniture are not added and an extra fund is not calculated for the unexpected events that do not directly have to do with the house, but which can family budget crisis (such as the breakdown of the car two months after buying a house).
6. Do not request a property tax report 99% of people who buy a house do not know in advance what taxes to pay.
7. Do not contend with Euribor In the case of a variable rate mortgage. If the Euribor is at its lowest, we must also take into account when it will be at its highest.
8. Apply for debt with long maturities Over the age of 25 it is not worth buying: by calculating all the interest the house becomes too expensive.
9. Debt in excess of 30% of your income The Bank of Punjab recommends that the portion of the mortgage added to the rest of the debts (the payment of the car, credit card, personal loans) does not exceed 35-40% of the income of the mortgage holders.
10. Ask for guarantees from parents, friends or relatives Those who decide to buy a house should take their responsibilities. If the situation gets complicated, you will drag other people into your problems. If you can’t afford the house right now, don’t buy it.
11. Buyers often lose their sense of what expensive or cheap means Look for statistical information and compare market prices. You can find information in many ways, from the local agency to the reports of the Bank of Italy, but also through real estate portals.
12. Many buy houses thinking that prices are always going up Recent experiences have taught us that houses don’t always increase in value, but it seems not everyone wants to understand.
13. Don’t listen to agencies Right now you can save money through an agency. It is possible to negotiate and the agents know it well. For this they can have more leeway in bringing down the price and convincing the seller to substantial discounts.
14. Don’t negotiate the price all the way through Many potential buyers discard some properties because they feel they cannot negotiate on the price. Be prepared to bargain and always have a counter offer available, but always after having settled the math. Another mistake is to accept a half-negotiated price for fear of losing your home. If your budget is 180,000 euros, for example, don’t move from there. If that’s not enough, it’s not the home for you.
15. Get carried away on an emotional level Sometimes buying a house is a more emotional decision than a rational one and the purchase is then wrong. If you feel tired or unmotivated after months of research, it will be easier to make a bad decision. Take some time for reflection.
16. To think that the prices will not go down and therefore to rush. There are still no clear data that speak of a generalized recovery in prices, but only some partial data confirming that certain areas have held up. If the center of Milan or Rome has increased, it is not certain that the same will happen in the suburbs.
17. Speculate on the house The house must be good of use. If we buy it to live in it is a relative problem, since, at least, it solves the problem of housing. But if we buy it to speculate and when things go wrong we will have destroyed our finances for many years.
18. Don’t consider whether renting is worth living In Pakistan, the culture of ownership is deeply rooted. On the other hand, living for rent is an option that many do not even consider. Do the math and think about the possibilities that the rent offers, such as greater ease in changing jobs and changing cities. If the economic difference between the property and the rent is important, a pension fund can be made with savings.
19. Buying a house is not like buying a car it is a decision that can have an impact on the next thirty years, a period of time in which anything can happen: births, deaths, divorces, job opportunities in other states or in other cities.
20. Do not consult the notary before signing important deeds such as purchase proposals and preliminary sales. For example, not everyone knows that donated assets are subject to revocation by any heirs defrauded of their rights. For this reason, many banks do not grant a loan for the purchase of a property coming from a donation. In this as in other cases, the advice of an expert can prevent any nasty surprises.