THE TOP FOUR THINGS TO WATCH OUT FOR WHEN BUYING A PROPERTY

Real estate purchasing refers to the process of acquiring a piece of land for sale, a building, or any other form of immovable property such as commercial property for sale or a villa for sale in Sri Lanka. It involves various steps and considerations to ensure a successful and informed purchase. Here is an overview of the process:

·       Determine your needs and budget: Start by defining your requirements and objectives for the purchase. Consider factors such as location, property type (house, apartment, commercial space), size, amenities, and your financial capacity.

·       Research the market: Conduct thorough market research to understand real estate prices, trends, and availability in your desired location. This can involve browsing real estate listings, consulting with real estate agents, or using online portals.

·       Arrange financing: Assess your financial situation and determine the amount you can afford to spend. If needed, explore mortgage options and secure pre-approval from a lender to understand the loan amount you qualify for.

·       Engage a real estate agent: Consider working with a reputable real estate agent who specializes in the type of property you are interested in. They can provide valuable insights, guide you through the process, and help negotiate favourable terms.

·       Viewing and inspection: Visit the properties that match your criteria and arrange inspections to assess their condition. Inspections may include structural assessment, checking for any damages, and verifying compliance with local regulations.

·       Make an offer and negotiate: Once you find something you are interested in, submit a written offer to the seller or their agent. Negotiate the price, terms, and conditions of the purchase to reach an agreement that is satisfactory to both parties.

·       Due diligence and documentation: During this phase, conduct due diligence to ensure that it has a clean title, there are no liens or legal issues, and all necessary permits and approvals are in place. Engage a qualified attorney or conveyancer to review the legal documentation and handle the transfer of ownership.

·       Closing the deal: Once all the conditions are met and the necessary paperwork is in order, proceed with closing the deal. This involves signing the purchase agreement, transferring funds, and completing the necessary legal formalities.

·       Transfer and settlement: After the sale is finalized, the property ownership is transferred to your name. Coordinate with your legal representative, financial institutions, and relevant authorities to complete the settlement process.

What are the top 4 things to watch out for when buying a property?

When buying a property, there are several crucial aspects to watch out for to avoid potential issues or regrets. Here are the top four things you should pay close attention to:

1.     Location: The location is one of the most critical factors to consider. Evaluate the neighbourhood, proximity to essential amenities (schools, hospitals, markets), transportation options, and future development plans. A desirable location can contribute to property value appreciation and make it more appealing to potential buyers or renters in the future.

Not purchasing a property in a good location can have various consequences, which may impact your living experience, financial investment, and future prospects. Here are some potential consequences:

·       Limited amenities and services: Properties located in less desirable areas may lack convenient access to essential amenities such as schools, hospitals, shopping centres, public transportation, parks, and recreational facilities.

·       Lower value appreciation: Properties in less favourable locations generally experience slower appreciation in value compared to those in prime or up-and-coming areas.

·       Difficulty in resale or rental market: When it comes time to sell or rent it out, its location plays a crucial role.

·       Impact on quality of life: It significantly influences the quality of life for its residents.

·       Potential lifestyle compromises: Living in a less desirable location may require compromises in terms of access to cultural activities, entertainment options, dining establishments, and community events.

2.     Property condition and inspections: Thoroughly inspect the condition of the real estate before finalizing the purchase. Engage a qualified inspector to assess structural integrity, electrical systems, plumbing, and other crucial aspects. Look for any signs of damage, maintenance issues, or potential problems that may require costly repairs or renovations in the future. Taking the time to evaluate its condition can help you avoid unexpected expenses and ensure a sound investment.

If the property is not in good condition, you can face dire consequences, such as:

·       Cost of repairs and renovations.

·       Renovating a property takes time and effort, especially if there are extensive repairs needed

·       Potential health and safety risks.

·       Resale and rental challenges.

·       Lower property value and appreciation.

·       Inconvenience during occupancy.

3.     Legal and financial due diligence: Conduct comprehensive due diligence to verify the property's legal and financial aspects. Ensure that it has a clear title, meaning it is free from any liens, encumbrances, or legal disputes. Review all relevant documentation, such as deeds, surveys, and building permits. Additionally, consider the financial aspects, such as taxes, any outstanding dues, and ongoing maintenance costs. Engage professionals like attorneys and conveyancers to assist you in this process.

Failing to conduct proper financial and legal due diligence can have significant consequences that may impact your financial well-being and legal security, such as:

·       Hidden financial liabilities.

·       Legal complications and disputes.

·       Financial loss and poor investment.

·       Inability to secure financing.

·       Failing to conduct due diligence may result in missed opportunities or regrets later on.

4.     Future resale value and market trends: While purchasing a property, it is essential to consider its potential resale value and the current market trends. Analyse historical price trends in the area and assess the potential for future growth and development. Consider factors such as planned infrastructure projects, economic stability, and market demand. Investing in a property with good potential for appreciation can provide long-term financial benefits.

Not checking future resale value and market trends can lead to various consequences. Here are some potential impacts you may have to face:

·       Difficulty in selling the property.

·       Lower return on investment.

·       Limited rental income potential.

·       Longer holding periods.

·       Missed investment opportunities.

These four aspects are not exhaustive, and there may be other considerations depending on your specific circumstances and preferences. It is always advisable to consult with real estate professionals, such as agents, attorneys, or property experts, to obtain personalized advice and guidance tailored to your situation.