When buying a home, many people look for the best price. However, what may initially seem like a bargain might be far from it. In this article, we highlight common mistakes made when purchasing a discounted property and offer tips on how to avoid them.
- Overlooking home defects
- Not investigating the reason for the discount
- Avoiding the costs associated with the purchase
- Not thinking about maintenance and associated expenses
- Not visiting the neighbourhood and the area previously
- Not knowing the neighbourhood's development plans
- Not taking into account the future
Overlooking home defects
Often, the reason some homes are sold at a reduced or discounted price is due to defects that the sellers do not wish to repair. This could be because they no longer live there and want to offload the property or they are unwilling to bear the cost of the repairs.
In these cases, if the defects are known and the seller is acting in good faith, they will typically disclose them during the sales process and adjust the price of the house accordingly.
Before accepting and purchasing a property, however attractive the price may seem, you must assess the extent of the damage. For instance, if a house with damp issues is being offered to you at a discount, you need to determine the cost of repairs and, to do so, understand the cause of the damp. Imagine they offer a €5,000 discount for the damp, but the cost of repairing it is €10,000 or €15,000. In that case, the discount isn't worthwhile.
Experts always advise quantifying the cost of repairs in houses that are sold at a discount due to defects.
However, another scenario is possible. The owner may list the property below market value due to defects but fail to disclose them. In such cases, a claim for hidden defects would need to be filed later.
This is why it is always important to research the market beforehand and compare the prices of similar properties in the area. You can do this by consulting the idealista price report. Having this knowledge will provide valuable insights for negotiation and help you identify if something seems suspicious.
Although not widely known in the sector, home inspectors – typically architects or real estate experts – can visit the property during the early stages of the process to identify any defects and estimate the cost of repairs.
Not investigating the reason for the discount
Many people are drawn to a reduced price without considering why the property is being sold at a discount. Some homes are priced lower due to legal issues, missing licences, unauthorised renovations, mortgage arrears, structural damage or an undesirable location.
Before making an offer, research the property's history. For example, if it is a foreclosure sale, check for any outstanding liens and ensure all paperwork is in order. When in doubt, hiring a lawyer is always a wise decision to avoid any hidden surprises.
Avoiding the costs associated with the purchase
The excitement of finding the ideal home at a reduced price can sometimes overshadow the fact that, beyond the purchase price, additional taxes and costs must be considered, such as ITP, VAT, notary fees, agency charges and more.
Not thinking about maintenance and associated expenses
Another common mistake when buying a discounted home is failing to consider the cost of maintaining the property and the ongoing expenses it will incur.
These costs include taxes such as IBI (property tax), community fees for owners and electricity bills – factors that many buyers overlook in their excitement at finding their ideal home. However, it is essential to estimate these expenses, as, when combined with mortgage payments, they could make it more challenging to manage financial commitments.
Since June 2013, an energy certificate has been mandatory for selling or renting a property. The energy label can provide a useful indication of the property's electricity consumption, helping buyers anticipate future costs.
Additionally, when visiting the property, ask about the community fees (and request a certificate of up-to-date payments), as well as the cost of the rubbish tax, IBI and other relevant expenses.
Not visiting the neighbourhood and the area previously
The location of a property is just as important as its condition or price. A common mistake when buying a discounted home is failing to take the time to explore the neighbourhood and understand the surrounding area.
Before committing to a purchase, even if the price seems like a bargain, it is always advisable to visit the area at different times of the day and on different days of the week. This will give you a better idea of local activity, noise levels, safety and available amenities such as supermarkets, schools, parking, public transport and healthcare facilities.
For example, a house may seem like a great deal on paper, but if it is in a noisy area or has poor transport links, it could lose much of its appeal. A good location not only enhances your quality of life but also helps ensure the property retains or increases its value over time.
Not knowing the neighbourhood's development plans
Another crucial but often overlooked step is researching development plans for the area where the property is located. These plans can be either an advantage or a drawback, so it is essential to check for future projects, infrastructure improvements or new constructions that could impact your quality of life.
For instance, a quiet neighbourhood may no longer be peaceful if a motorway, large shopping centre, nightclub or industrial zone is built nearby. On the other hand, a property in an area where parks are being developed or where a metro station is about to open could increase in value.
To avoid future headaches, it is best to consult the local town hall or review urban planning records to understand potential changes in the neighbourhood. This research will provide a clearer picture of the area's future and help prevent unpleasant surprises.
Not taking into account the future
Many buyers make the mistake of purchasing a discounted home that suits their current needs without considering their future plans. For example, if you intend to expand your family, the property may become unsuitable within a few years. While the future is always uncertain, the more you can anticipate your long-term needs, the better your investment will be.
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