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Experts In The UAE Highlight Common Pitfalls Encountered By Homebuyers In Their Quest For A New Residence.
Dubai: When considering the purchase of a new home, one obvious red flag is if the price surpasses that of neighboring properties without a justifiable reason. However, what other factors should you be mindful of when in the market for a house? Here are some of the common errors that inexperienced property buyers in the UAE tend to make.
“The process of buying a house can be quite daunting because the price you pay not only affects the duration of your mortgage but also your overall financial well-being. Furthermore, there’s the initial concern of overpaying for the house you’re considering,” noted Prakash Bhat, a real estate and mortgage consultant based in Abu Dhabi.
If you are apprehensive about paying more than necessary for a house, there are steps you can take. Bhat suggests that, in the UAE real estate market, a key element is determining. Whether the home’s price significantly exceeds that of similar properties in the neighborhood.
“Homes within the same vicinity typically share similarities. While some may be slightly larger than others may. They generally align in terms of style, construction year, overall size, and features. An unmistakable sign of overpayment is when a house is listed at a significantly higher price than other properties in the vicinity,” he further emphasized.
Mistake #1: Should You Only Focus on Houses Currently for Sale in One Area
When comparing house prices in a specific location, it is not enough to consider only the properties currently listed for sale, according to Stephanie Myrtle, the vice president of a Dubai-based real estate research firm. Instead, Myrtle suggests looking at recently sold properties, especially those sold within the last month.
While making these comparisons, it is crucial to watch for market trends. Myrtle advises being mindful of specific times of the year when the real estate market may be sluggish, leading to less competition. In such cases, comparing a property available during a peak season with one that was not can be misleading.
If you encounter a house that is significantly more or less expensive than similar properties in the same area, Myrtle recommends discussing this with your realtor or real estate agency to understand the reasons behind the price disparity. Depending on their explanation, you might have the opportunity to negotiate a price more in line with the current market value of the area.
Mistake #2: Overpaying for a House That Has Lingered on the Market
Experienced real estate buyers often say that a house lingering on the market for an extended period may signal underlying issues. As Prakash Bhat explains, one possible reason for a prolonged listing may be an initially overinflated price that the seller refused to adjust.
Bhat further points out that timing plays a crucial role. If a property has not been listed during a peak buying season, it may perform better when the market heats up, particularly during warmer months. Buyers should not be deterred solely by a high price tag.
Bhat also notes that sellers, after receiving inquiries, may be more willing to negotiate a lower price, especially if their property has been on the market for an extended period and they are seeking a quick and straightforward sale.
Mistake #3: Rushing and Overpaying for Convenience
Desperation to move into a specific neighborhood can lead to overpaying, a common mistake for many first-time homebuyers. Stephanie Myrtle warns against overpaying for the sake of convenience.
Myrtle advises taking time to research, even when in a time crunch. Comparing homes and seeking assistance from a real estate agent, although incurring a cost, can help avoid overpayment. This becomes particularly valuable when time is limited, and the expenses associated with professional assistance outweigh the cost of overpaying.
Conclusion
To ensure you are paying a fair price for a home, aside from avoiding the mentioned mistakes, both Prakash Bhat and Stephanie Myrtle recommend starting by examining price estimates of similar homes in the same area, as previously emphasized. Utilizing freely available online tools can assist in this process.
Bhat also stresses the importance of considering the terms of your offer. Sometimes, offering terms that accommodate the seller’s needs, such as buying the home “as-is” or offering post-closing possession and a flexible closing date, can be more valuable to the seller than the buyer can. This approach can lead to a mutually beneficial deal and help prevent overpayment amidst the emotional momentum of a home purchase.
