Owning your own house is the dream of many a young man or woman in our country. Vividly depicted in the cult classic Gharonda, starring Amol Palekar, the struggle of the youth for finding a place to own is like a rite of initiation to adulthood.
So what does it take to buy property? The short answer – Money and Patience. The more you have of both, the better it is for you. Now assuming you do have these in adequate quantities, we should look at what next.
1. Start saving for the down-payment
Your salary will determine your loan eligibility, but do not forget that you will have to pay 15-20% of the purchase price as down-payment. This can be a considerable amount, depending on the price of the property, so start saving money for this purpose well in advance, typically by starting a recurring deposit with the approximate amount as maturity.
2. Be aware of financing options
It is usually best to opt for a straightforward home loan from a reputed Bank, if you are eligible for it. Many builders offer what seem to be sweet deals on loan, but the fine print of them is often loaded in their favour. Far better to straight up ask for a discount on the sale price and arrange for the funds yourself. Your salary, the builder’s reputation and your credit score will affect your loan eligibility. Try and get the best deal you can, if needed by shopping around for loans at multiple banks.
3. Selecting the property
Perhaps the most important factor, especially since this affects all the other points as well. Consider whether you want to own the place to live in or for letting out on rent or just to hold as an investment. In each case your considerations would be different, you might be comfortable with an older building if it is closer to your place of work, while for giving on rent you would prefer a place in a society with fewer restrictions on who you can rent to. Make use of Google Maps and real estate forums, builders websites showing photos and videos of their projects to figure out the best areas and projects for new property. For resale property portals like Magicbricks and housing are your best bets to get a sense of rates at least. In any case, a site visit is strongly recommended. Do not ever ‘buy blind’.
4. Builder reputation matters
With the boom in real estate in India, the number of builders has also mushroomed. But not all of them are equal. The last thing you want after putting down your hard-earned money into a project is to then wait interminably for it to be completed and then have to enter litigation. So check out not only Builders websites but also look for their reputation on Google, consumer forums and the like. If in doubt, it is better to opt for an already-built resale property which is, at least, ready to move into. But do not ignore the quality of construction either. Once again, a close scrutiny of builder feedback on the web is essential.
5. Watch out for middlemen
Most of you will end up using the services of a local property broker to identify, visit and shortlist properties. But be wary of those who try too hard to push a particular property, since it would have more to do with getting more commission than find you a better property.
6. Ensure documentation is in place
Here is a basic list of legal property documents you need to check – ensure they are in place when you sign the sale deed:
- Necessary approvals for a Non agricultural land
- Commencement and completion certificate of the builder
- Certificate of Title
- Occupancy Certificate (if it’s a ready to move in property)
- Relevant approvals for water electricity supply
- Approved floor layout or the plan (for you might just buy a 7th floor flat and builder might have approval for just 5 floors)
7. Claim the income-tax benefits
As an owner of house property you are entitled to certain Income-Tax benefits, especially if you have taken a loan for purchasing the property. Consult your CA and ensure you claim the benefit in your future Income-tax returns.
And last but not least, once you have bought it, enjoy it!