Buying a house is one of the most important decision an individual makes in his or her lifetime and appended below are some important steps which will make this decision much easier, says Sunil Mishra, Chief Executive Officer of TRESPECT
Before you enter the home buying cycle, assess your needs carefully. Finalize your tentative budget, type of property you want, number of rooms, and a list of essential amenities. Drawing up a budget will help you understand how much you can actually afford. Once you have this in place, take stock of your finances. Check your credit score, home loan eligibility, and existing financial commitments. While doing this, make sure you have some funds set aside for contingencies. If taking the home loan route, ensure you have finances for down-payment. Also, include monthly rent, maintenance charges, and EMIs while calculating your budget. Looking from purely a sales perspective, apart from affordable housing which has been given interest rate subsidies by the government under PMAY, a large number of sales are taking place in the Rs 40 to 60 lakhs bracket. This can be particularly seen in the Thane extension, Kalyan and Dombivali belt in MMR around Mumbai.
Do your research – be it stocks or mutual funds or any asset class, the first thing that an investor does is research. And real estate is no different. In fact, when it comes to buying a home, there is no such thing as being too informed. Try to get a pulse of the real estate market by reading the latest news and research reports. Understand about taxes, legalities, and the process of obtaining a home loan. To get to ground zero, you can also talk to other homebuyers and investors about their home-buying experiences. After you have a clear understanding of the above-mentioned things, make a list of projects in different localities that interests you. Before you get to the next stage, make sure to run a quick search into the RERA website to check the legalities of the selected projects.
Now that your list of projects is ready, it’s time to enter the field. Take one locality per weekend and try to visit the projects in that particular locality. Site visits will be like your test drive before buying a car. Have a checklist ready about your likings and preferences while going for a visit. Make a thorough evaluation of all the properties. During your visit, don’t forget to take pictures and videos so that you can remember what you liked or disliked in each project. Lastly, don’t get tempted by model flats that look nothing less than a set straight out of Bollywood romantic classics. After you have visited a few properties, start shortlisting. Take some time to mull over your requirements before making this list. This is a good time to discuss your findings with your family to make an informed decision. Visit the shortlisted properties once again to arrive at a final decision.
With mounting unsold inventory, especially in the 60 Lakh plus budget segment, there are about 6.5 lakh unsold homes across the top 7 cities in India. This has transformed the market into a ‘buyers’ paradise’ with prospective homebuyers being spoilt for choice. Developers are ready to negotiate better and offer a great deal. However, negotiation is an art and not everybody can ace it. Thus, the best way out is hiring an agent. A trusted agent can be like your human-Siri assisting you at every step of your home buying journey. Apart from scouting projects and assisting you in site visits, the agent will also negotiate with the builder on your behalf. In a nutshell, a good agent will have your back all the time. If you are looking for one, our experienced advisors can always lend you a hand.
With the final price agreed, you now have to deal with property documents. Ensure that you receive the complete list of documents required from the developer for the transaction as well as for the loan application. Here, we suggest consulting a lawyer to ensure that the documents are legally sound. Once you are completely sure, you can go ahead and draw up the sale deed and pay a booking amount. Interest rates, loan tenure, loan-to-value ratio, processing fee, and pre-payment charges are some of the factors you need to consider before selecting a lender. Once you have finalized a lender, fill in the application form and submit all the required documents. The relevant KYC & income documents and previous loan repayment documents should be kept ready for applying for the home loan.
One should also be careful to avoid taking an EMI based loan in the 6 months prior to applying for the home loan. Your lender will then assess your ability to repay and your credit score. Additionally, they will also carry out verification and valuation of the property (unless the project is already in the bank’s approved list). Once all criteria are met, your loan will be sanctioned and disbursed.
Before taking the possession, a detailed pre-possession inspection is a must. Check all the fittings, fixtures, electrical fittings, and door locks carefully. Also, look for leakages and cracks in the house. It is good to get things fixed before taking the keys from the builder. Once you feel ready, ask for important documents. Some of the major ones include encumbrance certificate, commencement certificate, completion certificate, allotment letter, occupancy certificate, and a letter for no dues from the developer.
Registering the property. This is one of the most important parts of the home buying journey. Registration of a property is a legally binding process, which requires you to present all the original documents along with your identity proofs. You will also need witnesses from both the parties involved. At this stage, gear up to pay a registration fee and stamp duty charges.
These days, many states have an online facility too. You can submit all your documents and get an appointment with the sub-registrar. This will save you a significant amount of time and energy.
With the aforementioned steps done, you are only three steps away from throwing a grand housewarming party. These include:
- Doing up the interiors
- Moving in with your things
- Taking home insurance
All said and done, home buying journey for the first-timers can seem a little arduous. However, it being a big-ticket investment, giving it ample time along with a detail-oriented approach is the prudent thing to do. After all, the payoff for all the effort is the comfort of a having a place called home, your home!