Updated: Nov 12, 2021, 7:28pm
Buying the first home is a dream and for cracking the right deal, from deciding the location to doing the paperwork, numerous aspects have to be considered to ensure a hassle-free home purchase. In India, many first-time homebuyers rely on home loans to buy their dream home. As home loans span over 20-30 years, they are counted as a long-term liability that involves investing a significant share of an individual’s income.
With the majority of first-home buyers in India belong to an age group of 30-40 years, which is one of the most crucial years in terms of both personal and professional growth, it becomes even more important to make an informed decision.
Before you take the plunge, it is crucial to lay down a pragmatic and achievable plan. Make sure you understand how the real estate market works and conduct a comprehensive research to find answers to what to buy, where to buy and how to buy.
Taking a call between buying a new house and a resale unit is tough. Generally, the choice between the two is primarily based on the buyer’s lifestyle, preferences, and affordability. Since most of the new residential projects across the major cities in India are established in the peripheral locations, the cost of acquisition may be lower.
Goods and Services Tax (GST): If you are buying an under-construction property, you are liable to pay a GST. However, this may vary as per the unit cost. A housing unit pegged within INR 45 lakh attracts 1% GST and a unit priced above INR 45 lakh draws 5% percent GST.
Real Estate Regulatory Authority (RERA) details: It is vital to lay hands on the RERA details of the builder and the project. Visit the RERA website of the State in which you plan to buy a property, and find out if the builder and the project in question are registered with RERA.
Investing in a RERA-registered project would safeguard you in the case of inordinate project delays or any other builder defaults. You may filter out RERA-registered properties on property sites to ensure you are selecting the right projects.
If you plan to buy a resale unit, you must consider if the property has been used before or is it a fresh unit. Also, the older the property, the lower are the chances of availing home loans. For instance, housing finance companies do not offer loans to properties more than 50-years-old. In case, you buy a 35-year-old property; then the home loan tenure can only be for 15 years.
The biggest plus of resale properties in India is that they do not attract GST. Thus, you can save a substantial amount of money here.
Once you have made up your mind about what to buy, it is time to decide where to buy, i.e. the location. You can change almost everything in your home once purchased, but cannot alter its location. Thus, thoroughly examine the property and its site. From the surroundings to the neighbourhood, to the connectivity options and other social elements of daily importance, everything matters and should be easily accessible from the property.
Being a prospective homebuyer, undertaking thorough market research and analyzing the price trends of a property are crucial steps. Keeping a close tab will provide you insights about how the market moves and is it worth paying a price that your seller quotes or should you strike a negotiation.
The ‘property rates’ not only help you get the per square feet (psf.) unit rate in the specific area but also provides information pertaining to investment prospects in a locale. You could study the historical capital appreciation or depreciation quarter-on-quarter, and make inferences about future potential based on more inputs from market sources.
‘Price trends’ on the other hand; furnish the graphic representation of the property values over the years and help in determining the potential investment returns expected from a property.
Identifying your ‘affordability’ is also a crucial criterion when buying a home. Home loan service providers allow you to access the home loan deals of some of the reputed financial institutions across India. From the current rate of interest to a processing fee and the loan tenure, you can view complete details or request for additional information over the mail.
It is recommended to check your loan eligibility and gauge the approximate loan amount that you may borrow with the current income and the amount that you have to repay to the bank over the selected tenure.
The ‘EMI calculator’ is another excellent feature that determines the monthly outgo with an explicit categorization of the principal and the interest amount.
Real estate investment is a huge undertaking, hence verifying all the documents is crucial to ensure that the property does not have any legal adversities attached. These include:
Once you have narrowed down a couple of choices, you could use the below provided checklist, which will help you compare different properties and choose the best among all options. The prime factors that you must compare while analyzing properties are their location, price, rooms, size, amenities, RERA certifications, annual cost, facilities around, connectivity options and exteriors of the society.
To ensure a seamless and hassle-free home purchase, you may consult a legal expert who may help you with the above documents. They may obtain these documents, scrutinize them and submit them on your behalf. However, legal connoisseurs charge a fee for all the assistance delivered.
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Maneesh Upadhyaya is the chief business officer at 99acres.com. In his more than a decade career in the consumer internet space, he has worked with 99acres.com’s parent firm Info Edge’s other verticals Shiksha.com and Naukri.com. Before joining Info Edge, he worked with Bain and Company and HUL. He is a business strategy and execution expert.
Armaan is the India Lead Editor for Forbes Advisor. He has more than a decade’s experience working with media and publishing companies to help them build expert-led content and establish editorial teams. At Forbes Advisor, he is determined to help readers declutter complex financial jargons and do his bit for India’s financial literacy.
Updated: Nov 12, 2021, 7:28pm