Common Home Buying Myths of Todays Homebuyers
For first-time home buyers buying a home is a life time investment and thus, you must have a good knowledge about the home buying procedure. Also, you should avoid some common myths associated with it. As myths are simply human beliefs that don’t have any proof and believing in all these can be your biggest mistake.
Let’s have a look on some of the common misconceptions or home buying myths which you can avoid to move ahead in this journey with excitement and confidence.
Myth 1: With the emergence of RERA, home owners don’t have to do much research work
RERA (Real Estate Regulation Act) was emerged as a saviour of property buyers and imposed some regulations on the real estate companies to protect their rights.
RERA is only imposed on properties that are greater than 500 square meter and with more than eight housing units. While many home buyers believe that this law protects all the properties. It’s a myth.
Our recommendation
Before buying any property, you must ensure that your builder is registered with RERA board to avail the benefits of their protection.
Myth 2: Renting is cost-effective than buying any property
This is the biggest myth many people think.
Suppose you want to buy a home in Pune of Rs. 80 lakhs. The fixed interest rate you may pay will be around 9.4%. In this condition your EMI will be Rs. 67,000. If you prefer to live in a rented home, then probably the rental value will range from 25k to 30k. Also, this rental value will increase with time.
As per Economic Times, rental prices in all the cities are increasing with time and gradually it may reach up to 26.2%. So initially EMI may seem to be a burden, but as time passes and with the annual hike in your salary, this burden will reduce.
Also, remember at the end of your tenure, you will be the owner of your property for life. This is the huge benefit, especially during your retirement period, you won’t have to pay the rent.
Our recommendation
Buying a home is a smart decision if you think about property rates appreciation, tax exemption and a feeling of enjoying in your own home.
Myth 3: Builder doesn’t matter while buying any property
Choosing a builder that doesn’t think about customers, can put you in trouble while buying home. Such builders often use low-quality materials to complete their construction work. Hence you must go with reputed builders that can deliver high-quality results within promised timelines.
Our recommendation
Always look for reputed builders that use high-quality building material. This will increase your property life.
Myth 4: A glamourous ad reflects reliable and trusted project
You may come across many glamourous ads of upcoming projects. But always remember that ‘All that glitters is not gold’. Don’t believe in colorful newspaper ads or celebrity-endorsed commercials.
You must trust your own research work, do on-site visits to know the project’s progress. Also, during your visit along with showcase flat, also check the common areas, and amenities. If your builder has any previously done work, then visit that building too and talk with the residents there.
Our recommendation
Speak with other buyers to know the true condition of project. Know their overall experience with the builder.
Myth 5: Under-construction projects are cheap
Although, under construction projects may be cheaper at the outset, but ready-to-move construction will give you better understanding of project.
There are always some risks involved in under construction projects. You can never predict how the project will turn out.
Our recommendation
To be on safe side, it is better to invest in ready-to-move home. In case of choosing any under construction project, you must go with the builder with excellent track record.
Myth 6: Buying home demands greater down payment
Depending on your property, you need to pay home loan of around 80-90%. Although, paying 10-20% down-payment is ideal.
To pay this down-payment you can keep another property as collateral or you can apply for personal loan for down payment.
Our recommendation
If you have sufficient finances, then paying down payment from your own pocket is a wise decision. If not, then go with the personal loan or else you can negotiate with the builder to reduce the down payment.
Myth 7: Subvention schemes will reduce the overall cost
Remember, there is nothing like free lunch. Many real estate developers tempt buyers to invest in under construction projects through innovative schemes. Subvention scheme is one of them. Under this scheme buyers don’t have to pay EMI until they get the possession.
Initially it may seem to cut down cost, but things are not that easy. Your overall EMI will never reduce, instead the overall amount you will pay to the buyer will be more.
Our recommendation
Follow basic loan pricing, instead of under construction projects you can go with the completed one to start the EMI as soon as you get the possession.
Myth 8: Real estate investment is risky
This is the biggest myth among home buyers. Every investment involves risk, however as compared to others, real estate involves less risk, as it is a game of economics based on demand and supply. With the increase in demand of real estate, your property price will also increase and hence this field is less volatile as compared to other investments.
Wrapping Up
Buying a property has now become easy. You must avoid the above-mentioned myths to buy your property at the right price. Always check the developers’ reputation in the market before making any investment.
Also, you must remain updated about the current market trends, financial options and interest rate to take informed decisions. Don’t rely only on the opinion of our friends or any outdated information. You can also take help from real estate professionals as they can help you in your research work and that will make the difference.
A knowledgeable buyer will always remain aligned with his financial goals and the living requirements.
