Is word of mouth enough when you decide to buy a property?

Whether it’s for investment purposes or for living purposes, we often depend on word of mouth to decide which property to buy. Friends, relatives or even colleagues have a huge influence on our decision. This brings to my mind 2 separate incidents related to word-of-mouth property buying that I have come to know about.The first incident is about my friend Tarun who was a software professional and had spent quite a few years working in the US. While he was in the US, some of his friends decided to buy flats in an apartment complex, purely for investment purposes in Whitefield. This was Whitefield approximately 10 years back, then just a sleepy suburb of Bangalore. Tarun, unable to come to Bangalore, decided to take his friends’ word and bought an apartment in the same complex.Cut to the present, now that same apartment has almost doubled in price and Tarun is a happy man. But when we were talking that day he seemed to rue the fact that he never did any research of his own before investing. Because he said there was a villa project just behind his apartment complex that was being constructed at the same time. It was slightly more priced compared to his apartment, but its appreciation has been much much more than his property. The value of the villas had absolutely skyrocketed and he felt that he had missed a golden opportunity with the villas now being completely out of his reach.I came to know of the second incident from my colleague; one relative of his had come to know of an empty plot that was up for sale. The property was located in Devanahalli, an upcoming location in Bangalore. This individual now told about this property to other members of his extended family and word got out. Soon 3 family members decided to invest in the plot and buy it together.They each paid Rs 15 lakhs to the owner, but to this day neither is the property in their name nor is the money in their bank. The plot of land had some serious legal issues which they came to know about only after all formalities were done.On the one hand the owner now refuses to pay the money back and the relative who had initially mentioned about the property refuses to take any responsibility.It’s true that these 2 incidents put a poor light on word of mouth property buying. Any individual planning to invest in property should do their research, mainly because:

• Everyone has unique likes, dislikes, needs, ambitions
• Most importantly requirements are different, so if something suits your friend it may not suit you at all

• You need to do thorough investigation to avoid scams and frauds

This reminds me of another incident where a relative of mine got to know of a property being sold in a village. Since he was genuinely interested in it he went to the village and spoke to the village panchayat head about the owner of the property.Usually the information a village head can give about a family is a very detailed one which is necessary before buying a property.But it would be wrong to say that decisions of buying property based on word-of-mouth are always incorrect. In fact I have another friend who has done just that and is completely satisfied; he even feels he saved a lot of time and energy by doing that.But I still feel completely depending on word-of-mouth is leaving too many things on chance. It is better if we keep a balance between word-of-mouth and personal judgment, what do you feel?