Buying a home is a lifetime investment. An entire family’s financial wellbeing is dependent on it. It is highly important to pursue certain guideline and checklist before one plans a purchase. Owning a property is a big decision and it always pays to prepare in advance. With favourable interest rates and affordable home prices, most of the buyers don’t want to waste time in listing down the pivotal elements that would help them analyse the prospect of the purchase.
Following are the top points that should govern the checklist of any prospective home buyer:
Approval and licenses
Sometimes buyers are drawn into making hasty decision of investing in a property without vetting all the legal property documents fearing that he would lose the deal. Among the important property documents, one should have the Sale Deed, the core legal document that acts as proof of sale and transfer of ownership of the property from the seller to the buyer and most importantly, it has to be mandatorily registered. Before the Sale Deed is executed, one should execute the sale agreement and should check for compliance of various terms and conditions as agreed upon between the buyer and the seller. The deed should have a clear title and the property not subject to any encumbrance charges. A seller should settle all the statutory payments such as property tax, cess, water charges, society charges, electricity charges, maintenance charges etc., (subject to the agreement) before executing the Sale Deed.
List of banks financing the project
When you list the banks financing the project, make sure that it is an approved project of the bank by checking the APF number. Every project of a developer have a valid APF number/code provided by banks or housing finance companies (HFCs) that denotes that the project has received all necessary approvals and homebuyers can invest in the project without any fear about the credibility of the developer. The APF number makes it convenient for home loan buyers to get home loans and saves them from the horror of collecting legal documents of the project from the developer.
Calculate the Total cost
When buying a home, most just look at the purchase price and that’s it but there are some hidden ones too. Many home ownership costs are completely ignored (at worst) or glossed over (at best). Some of the most commonly overlooked home ownership expenses include Maintenance/Upgrade expenses, Utility expenses, Property Taxes, Association dues/fees (if any), Home insurance etc.
Verify the Builder
Sometimes the land of the property is under litigation. Its recommended to do an extensive verification of the builder. You may do this by visiting its past or current projects or do a online research on social forums. Also, take a note of the seller’s personal details like ID and address proof, PAN number and bank account information, incase the need arises to contact him later.
Buy vs. Rent
It’s risky to use your rent to pay off EMIs. Since the rental yield on residential properties is generally only 2-3 per cent, it’s not a feasible idea at all. Also, consider that the property may remain vacant for months before one finds a tenant.
The Right Plan
Among all the available payment options such as down-payment plan, flexi-payment plan, construction-linked plan and possession-linked plan, one must carefully since there is a cost for every convenience. For example, subvention schemes, has atleast a 10 per cent higher rate than regular ones. Late payment or default might also add as a burden to the customer. Guaranteed rental schemes where the developer either pays the buyer rent for a fixed period during construction. In the first scheme, the buyer gets regular payments from the developer during the construction of the house, which helps him offset a part of EMI or rent costs. The customer must analyze and opt for the one that best suits his circumstances.
Size of the Apartment
Always go by the carpet area (the area enclosed within the walls) of the flat which could be 30 percent less than the super built up area which is generally mentioned in the builder’s brochure. For example, a two-BHK 1,000 square feet flat could actually be just 700-750 square feet. Incase you are planning to buy a plot for building a house later, check for the built up area along with the topography, and soil before sealing the deal.
Check the Infrastructure plans
Metro connectivity/big infrastructure development in future associated to the property location can improve the ROI tremendously. But don’t go for plots/property which has close proximity to any polluting industry.
Check the Site
The layout in the brochure could be different from the reality. So, do a thorough on site visit before booking. Have a conversation with the neighbourhood to rule out any illegal occupation or other legal disputes related to the property.
Register your Plot
Post selection, its time to register the property with the authority concerned to become its lawful owner. Through the registration of sale deed, you can gain the rights of the property from the date of the execution of the deed. Before you do so, do an internal research on the developer’s record in terms of market feedback and project delays. Also, don’t miss out to search for any contingencies which may hinder the development of the property.
Be it the first property purchase, or second, one should always make sure that the checklist is followed to save any legal issues at a later stage. Buying a home is transforming your dream into reality; it should always make you happy and content. A little preparation will go a long way and help you keep that happiness intact and forever.