Buying the very first home is a major milestone in one’s life. It can be overwhelming for a first-time buyer because few know where or how to begin the search. An exciting but a complex process alas!
Planning to buy a house and not sure how to go about it? Read on…
Disclaimer - Please note that the content below is solely based on my own experience and is meant to provide a fair picture to first time buyers in Indian market.
Before venturing into the market, prepare well.
Discuss with your family and determine your requirements (needs as well as wants):
1 Whether you will go for an independent house (in a gated or Non-gated
Planning to buy a house and not sure how to go about it? Read on…
Disclaimer - Please note that the content below is solely based on my own experience and is meant to provide a fair picture to first time buyers in Indian market.
Before venturing into the market, prepare well.
Discuss with your family and determine your requirements (needs as well as wants):
1 Whether you will go for an independent house (in a gated or Non-gated
community) else an Apartment (in a High rise building or a low rise
building)
2 Look and size of your home – how much space, number of rooms, baths,
2 Look and size of your home – how much space, number of rooms, baths,
balconies, area of kitchen, garden, terrace, courtyard etc
3 When do you want to move in – If you are ready to invest and wait, going
for new projects is beneficial as the price is comparatively low and you
have an option to alter the construction as per your need; otherwise new
ready to move in and resale houses are good options।
4. How will you finance the purchase
Decide the place you want to settle in considering below factors (in the same priority order)
· Heart of the city/town – could be expensive but connectivity to and from all will make it worth living; OR a calm, quiet place – Away from the hustle and bustle of the crowd; the tranquility will welcome you each time you return.
Based on these factors, you can look out only in the areas that suit you.
· Budget (allow 5 – 10% fluctuation on this limit)
· Hospital/ clinic, school (if you have kids), shopping complex (for basics like groceries, dairy products) and other general things should be in vicinity.
· Distance from office
· Availability of public transport
· Connectivity to main market, railway/bus/metro station, airport
Baseline the above as prerequisites for your home.
When you have a basic plan…… Begin the hunt!
1. Initially browse the web and view the offerings there. This will give the idea of the availability in existing as well as upcoming projects in the areas that you have chalked out. Also you’ll get to know what is the current market price, trend etc.
2. Property related newspaper sections and magazines give a good insight on various factors related to buying an asset.
3. Realtors and agents should be the last option in case you are unable to search yourself.
Make list of only those sites that you want to see. Note down the address and caretaker’s information. Taking an appointment and then visiting is always a good practice to save time, energy and get the relevant details firsthand.
When visiting a property for sale - What to look for?
1. Foremost, it should fit in your basic plan.
2. In case of new/on-going constructions, builders/owners always have a model flat ready on display. Most of the times, the area of the model flat is bigger than the actual flat you want to purchase. Keep this in mind as it may pose a wrong picture.
3. Ask for both the site and floor plan – These give a glimpse of the construction after it gets over.
a. The plan should be government approved (City development authorities)
b. Some are hesitant in showing the site plan because of the deviations done in it after they got approval from the government. Mostly deviations are there but it should not be more than 65-70%.
4. See the approvals from concerned city authorities – development, Water, Electricity, Sewage, Phone, Pollution, Airport, Fire, recognized Bank Guarantee etc.
5. Make inquiries about:
a. Availability
b. Price
c. Time of completion in case of construction or renewal of the property is still in progress – this will help you to plan both movement & investment well (especially if living in rented house currently).
d. Age of the property if already complete
e. Material used in the construction
f. Provision of basic facilities like water, electricity, lift, etc.
g. Other amenities (power back up, gym, swimming pool, shopping complex) –maintenance charges later will be highly impacted by these.
h. Whether the home is owner’s or builder’s share
i. Any mortgage/dispute involved with the property
j. Any plans to widen or narrow the site boundaries. This would have a severe impact in case it’s being narrowed for road/sewage construction etc.
k. Security
l. Associated banks which would help in finance (if required)
6. Note if actual size of the paraphernalia matches the dimensions mentioned in the brochure/plan.
7. Seek the ventilation & sunlight areas in the house.
8. If interested in Vastu/Feng Shui, see if the house is compliant. If the factor is extremely important, you may consult an expert.
9. Property surroundings – this shall give you a picture of further developments in the area. The growth may result in appreciation OR depreciation of the property value (watch out point if you are looking for property resale in future).
10. Politely request for some contacts of other purchasers in that building or area (you can later take a feedback about the property as well as the builder/owner. Feedback can also be obtained on Internet.
11. Ask as many questions and clarify all your doubts without hesitation. You can even call them back if you remember something later. The dealer will be happy to answer your queries. Additionally, it is his job! J
12. Before leaving, do not forget to collect the price breakup and brochure from the site office.
Collect much information and feedback to your satisfaction as this will be a big investment; lifetime for some.
It may happen that some properties have some good features over others but not all factors are present. In such a scenario, one should see his/her own priorities and take decision accordingly.
After visiting a few sites, you yourself shall be able to foresee the deciding factors for buying a property.
If you show interest, mostly dealers offer to block the property for you. This period can be utilized to make decisions.
Once you determine which home is right for you, finalize it! Then comes the turn of all legal procedures.
If going for mortgage, normally banks pay 80% of the total amount; the rest 20% needs to be paid from the purchaser’s pocket. You can take the builder/owner’s help and receive guidance to the correct bank and related contacts.
1. Meet the loan relationship manager and acquire information of all the documents required for
the application.
2. Confirm the time taken by bank for loan sanctioning after the application is submitted. Inform
this time taken to the builder/owner in order to avoid any issues later.
The builder/owner would demand an advance amount to book the property in your name. This amount can be between 50K -200K.
Here, first thing that you should do is hand over a post dated cheque - Post date will give you sufficient time to get the verifications done. If not satisfied, you can always stop/cancel the cheque from being realized.
Also request for some time for fund arrangement for paying the rest of the amount. You can pay the agreed amount to the owner through post dated cheques (again for the same reasons).
Obtain an agreement [Sale & Construction] for the purchase of the concerned property. Both you (the purchaser) and the Owner need to sign on all the pages of the agreement. They owner will keep a copy with him and hand over the original agreement to you.
Get the property verification done through a legal advisor. With his help you can come to terms with any irregularity, hidden costs or other points which are not explicitly mentioned in the documents. Plus this will simultaneously act as a contentment factor.
For mortgage, approaching the bank should be the immediate next step.
3. Select a government recognized bank for loan. Chances of frauds/downfall are minimal there.
4. Mostly banks require the following:
i. Savings account in the same bank (for loan purpose)
ii. Duly filled loan application form
iii. Identification proof copy (passport, Employee Id card etc)
iv. Residential proof
v. Employment proof
vi. Pan Card copy
vii. Last two years Form -16 and ITRV (tax paid receipt & return forms)
viii. Your Photographs
ix. Latest three salary slips attested by your employer’s office
x. Other Bank statements for last six months
xi. Guarantor-proof of ID, address, property, if working then 1 month salary slip, IT returns for 1 year (Guarantor required if project is under construction/purchase of plot/takeovers)
xii. Copy of Property Documents (Signed Sale agreement, Construction agreement, Latest EC, Tax paid receipts, Copy of Mother deed, approvals from local authorities, Sanctioned plan, etc.)
xiii. Cheque towards processing, legal charges and valuation charges
5. The bank employs their legal advisors and evaluators to double check before taking further
action. It’s only after their credit report that the loan is dispersed.
6. The bank may take 3-4 weeks. They will inform you once the legalities are complete.
After the loan formalities are finished, the bank shall pay the sanctioned amount to the owner while the owner will hand over the property to you.
Getting the Registration done is the subsequent step. The owner/builder and the bank will help you in this too.
And finally after so much melee, you will finally be the proud owner and ready to move in your own dream house.
