10 Significant tips for all home buyers
The home buyers need to evaluate various factors before buying a home.
Property buying is one of the most crucial decisions for most individuals. Some buy homes for end-use while others look at it purely from an investment perspective. In both cases, it is imperative that buyers be cautious before taking the plunge as it involves a major chunk of one’s life savings. Therefore, buyers need to evaluate various factors before buying a home.
Evaluate the requirements
First and foremost, it is very important that you evaluate the size of the house you require based on your needs and lifestyle. Regular housing projects offer definite set of options while custom-made homes help in setting the size as per your choice. For an end-user, factors such as space required for the family today and even in the future need to be considered.
Alternately, an investor must be clear about the size and type of property so that it is absorbed quickly in the chosen micro-market. The time horizon for holding your investment and identifying the target group for selling the property to in future must also be evaluated.
Select the right location
Selecting the right location can perhaps be one of the most complicated aspects of property investment. Every person would have his/her own set of preferences. Few factors such as the distance to workplace or to children’s school and, to some extent, to the nearby market place are of prime importance for end-users. Other two key aspects include connectivity and public transport facility in the locality. It is important that the area is well connected to other parts of the city with a good mode of public transport.
Investors have to identify how the property market has performed in recent times. If there are similar properties available in the same locality, then what rents are these properties fetching.
Well-developed Social Infrastructure
Buyers must consider the liveability factor of a particular locality. The area should include schools, grocery stores, health care facilities, parks, etc. in the vicinity. For instance, there should be clean roads, well-maintained sewage network, less waterlogging issues etc. Presence of good shopping centers, nice eateries, etc. may also be considered.
It is important that end-users analyze the current state of the locality’s development and gauge the estimated time for full development with necessary amenities.
Similarly, investors should check whether the locality will develop within the period of their investment horizon. Various factors such as upcoming metro lines, monorail, flyovers, office complexes, shopping facilities, private hospitals, etc. can help them estimate the development potential of the locality.
Select the Best from myriad options
Today, there are multiple options available in the market but you will have to look at various parameters, compare multiple options and select the best property. While an under-construction property is available at a cheaper rate, a resale property might be expensive as it has all requisite clearances and is ready to be occupied.
At the same time, an old property may be available at a cheaper rate, but it may require large investment for renovation. With ample property options available in the market, it is also possible that one can get a good housing unit at a cheaper rate. Hence, you can do good research and not hesitate to negotiate.
Buyers should also consider the amenities available in the project and the possession time-line if the property is under construction. Compare all aspects with other available options in the market.
Check Developer Credentials
It is very important that buyers do a proper market research on the reputation of the developer and his past completed projects, if any. This gives a good idea about the capability of the developer and his construction quality. Buyers must not get carried away by dazzling presentations and jazzy brochures given by certain developers.
For under construction property, it is important that you check the financial capability of the developer so as to avoid any delay from his side.
In addition, you can also enquire about the builder credibility from the local brokers or by browsing through various blogging websites. In addition, investors should check the rental values fetched and the capitals gains received by the past projects of the developer.
Verify project approvals and key specifications
Buyers must check all approvals by the concerned government and local authorities and get it verified by a good lawyer. In addition, buyers must also carefully check the specifications and the quality of material used in the property. At times, the standard material specifications shown in the brochure are replaced with cheaper materials in reality. Same goes with sanitary ware and plumbing too.
At times, model houses may also prove to be misleading. They may differ in size /dimensions and furniture design and placement might be done in a way so as to make it look spacious. It is advisable to cross check the dimensions of the plan given in the brochure vis-a-vis the sample unit built.
It is also important to know the exact dimensions of the carpet area, built-up area and super built-up area of the property. End-users may get tricked by a few developers with regard to built-up area versus super built-up area versus carpet area.
Checking the quality of property is important for investors too as selling a low-quality unit in future would be complicated.
Include various other charges
Charges quoted for various amenities vary from developer to developer. These charges include External Development Charges, Internal Development Charges, parking charges, one-time club-membership charges, security deposit, water charges, etc. Out of these, the charges levied by the local authorities can be easily checked with them.
One-time maintenance is the most important component of the total house cost. One should ask the developer as to how this money will be used, maintained and transferred in the future to the association body.
Buyers can ask the developer for a clear breakup of all the charges and also for the details of all additional charges like stamp duty and registration charges, etc. Be informed about the timeline for paying these charges. Investors should also possess a clear idea of all the charges and know what one-time charges and annual charges are.
Check for transfer fees for transfer certificates which can be levied in case you want to sell the property to another party.
Bank approval and loan eligibility
In most cases, it is good to opt for properties that are pre-approved by reputed banks because generally they have verified the project before sanctioning loans to buyers. As an end-user, you should be aware of the amount of loan you are eligible to get for the property and all necessary documents required to obtain a loan should be gathered simultaneously. It may also be important to work out other sources of finance for the amount other than the loan.
For an investor, the most important part would be to calculate tax benefits in case of ahome loan. Time period of money being locked is as important to consider besides tax implications on a second home.
Verify Re-sale Properties
Buying a property in the secondary market involves a lot of checks such as mortgage on the property, previous dues with the association, etc. Sometimes the property may also be disputed. Thus, it is advisable to hire a good property lawyer for resale transactions. It is also good to seek a title clearance certificate.
Mother Deed is a must. A ‘mother deed’ contains the chain of titles of the relevant house/apartment/flat and of the land on which it has been constructed. It traces the original ownership of the property and all subsequent transfers which must be seamless and uninterrupted.
Other relevant documents to be acquired in such transactions are Tax paid receipts, non-encumbrance certificate, sanctioned plans, approvals and clearance certificates and occupancy certificate.
Before signing any document, check with your bank as to how much loan can be approved for the selected property because many banks do their own property valuation before disbursing the loan which may differ from the market value.
Legal issues of property buying
It is one of the most important aspects for any property transaction. Before proceeding for the sale agreement, one has to be aware of issues such as clear and transferable title, record of right and title, encumbrance charge etc.
Ensure that the property is not under any kind of requisition or acquisition. The property should have all the statutory approvals and power of attorney should be obtained from the seller. The sale agreement has to be registered on a stamp paper as described by the government. Buyers must check the current registration charges applicable in order to get the property registered on government approved stamp paper.
No-objection certificate in case of pre-owned property and membership document and no-due certificate in case of co-operative society should also be obtained.
The investors, in particular, must also check whether the existing association has any restraints for issues like renting to bachelors, using the property as serviced apartment or guest house etc. Investors must obtain the probational NOC.
