Home Buying Advice
Congratulations!!! The very fact that you are reading this page means you have taken the first step in the right direction. Buying a house can be exciting as well as overwhelming. However, a good deal only comes from doing due diligence. If you’re like most people, buying a home represents your single biggest investment. Perhaps, buying a home is the most important decision a family makes together. The right education on the types of homes, financing options, and, overall costs go a long way in making a smart decision. Whether you’re buying residential, commercial, industrial, investment option or a piece of land, the following simple research steps will help you to make a satisfying purchase.
1. Define your goals: Clearly understand why you are buying, what you need. Do not overreach by buying a property that the agent says is “hot” but requires you to jeopardize your finances. Critically examine your objectives and requirements and short list properties accordingly.
2. Location, Location, Location: Location plays the most important role in determining if the property adds value to you or not. Again your objective should decide which location you should choose. If you want to buy property for your own use, choose a location that is close to your place of work, friends and family, children’s schools and other amenities. If your objective is to extract maximum rent in comparison to the cost of the property, look for locations that are very close to growing commercial and business districts in order to capitalize on the demand of migrant executives who will flock to these areas. If you want a safe and solid rental income along with moderate but certain price appreciation, you should consider prime areas that are well developed and are near the cultural and educational centers of the city. Risk loving individuals should target hitherto under developed areas in the suburbs that are expected to boom due to demographic changes and government policies. Those looking to buy commercial properties should focus on the accessibility of the property and its proximity to bustling residential areas of the city.
3. Selecting the property: Almost all preliminary searches are done on the internet. You may partner with a broker as normally buyers do not have to pay any brokerage for new projects. Visiting real estate fairs is another good option. However, it’s also important to view the actual site in person. Property details seem similar online and also it’s very important to get a feel of the neighborhood and check the layout, workmanship etc. While it is possible to compare amenities of different projects, one feature which most people tend to overlook is ratio of the built up to the super built area. On the face of it, a project may be priced lower; a comparison of the built up to super built up ratios will reveal the true price. It is also a good idea to check the title of the property and get a legal opinion on the same. It is better to associate with a reputed builder to avoid any problems in the future.
4. Financing: Get preapproved for a loan. Whether you need a loan or not, it is better to opt for a loan as there are lot of tax benefits for housing loans. The pre approval process involves meeting with a lender who studies your balance sheet and sources of income. You will now have the details of how much you can borrow and plan accordingly. Do not forget to add extra charges like maintenance, security deposit, legal fees, registration and stamp charges to the cost of the project.
5. Taxes: As a real estate investor, you have the opportunity to avail of huge tax benefits: Every year a maximum of Rs. 2 lakhs in interest payment and Rs. 1.5 lakhs in principal repayment for home loans can be claimed as deduction from total income. In the year which paid, stamp duty and registration charges up to a maximum of Rs. 1.5 lakhs can be claimed under section 80C.
6.Transaction formalities:. Generally, most developers do not bargain on prices, but come out with offers from time to time like free car parking and/or club membership or free fittings like modular kitchen, air conditioner, TV, etc. specially during the festive season. Also check for features like extra charges and possession date. Negotiate with the seller to get the best price and seal the deal with a booking amount. At this time, the “agreement for sale” papers are executed and it should include all the specifications of the project.
7. Safeguarding your Investment: A lot of real estate regulatory proposed amendments favors the buyer and protect them from unscrupulous developers. Developers will have to mandatorily register their project with the real estate regulatory authority. Brokers will also have to register themselves. Under the proposed bill, buyers have the right to obtain stage-wise time schedule of project, claim possession as per promoter declaration and get refund with interest and compensation in case of default by the promoter.
8.Securing your finances: If your loan has been pre approved, go back to your chosen lender/bank to finalize the mortgage details. Most payments are construction linked. During the fit out phase you can plan and ready the interiors of your flat, while the exterior work is getting readied. At the time of possession you will be handed over the keys to your new home. The property needs to be registered and mutated in your name, so that the property taxes can be paid regularly. It is advisable to register the property in a joint name. The property documents should be kept in a safe and secure place.
While the above only serves as a basic guideline, as a buyer you might have a specific query. We at Arrjavv, will be happy to address your issues. Please feel free to write in at email@example.com and we will reply at the earliest.