How to Buy a House! is a Dream which is more of a responsibility in today’s competitive market It involves a lot of planning, a lot of studies includes a lot of factors that influence the buying decision of a buyer. Today, in this article, we will touch base a few points that will Guide you to How to Buy a House? every buyer should consider while buying a property either for self-use or investment.
- Floor Rise: Most of the Builders in Mumbai ask for an additional premium for units with better views or upper floors. This premium rate is normally 20/- to 50/- per sqft per floor. Even after you pay the premium charges it is not shown in any of the documents. Your house would still be registered at a rate per square feet they have quoted for you. See if your builder can remove it off or reduce it; most do. Remember Customer is the King and if you bargain hard with an intention of buying the unit most of the developers would waive it off.
- Construction Quality – The construction quality of any project is always a major concern while opting for a property. A bad construction may result in a number of problems later. So it is very important to make sure the construction is dependable. Nowadays most of A Grade developers use ‘Mivan’ technology, which is an innovative form of work suitable for constructing houses in large volumes at a higher speed. It’s a Malaysian technology that gives a smooth finish and is also comparatively safer in times of earthquake. Mivan also reduces the problems like leakage, cracks etc.
- Amenities – A stand-alone tower is no more a choice to many. In the growing modernization, amenities play a vital role in the choice of home. However, even if it seems all lavish and flashy, the most important thing to consider is the ratio of people or population residing in the project with the number of amenities available The Amenities provided might seem large when you see of it on an individual accounts but, if you consider the number of people/ families that will reside in the project, these amenities actually happen to be smaller or of regular size.
- Location – When the Question pops up in your mind How to Buy a House? the first thing is Location, isn’t it? Location of a project is that one primary factor that influences every other factor. It defines connectivity, future development, management, appreciation, pricing, etc. Whenever we look for a home, we do check the means of transport in the vicinity. The feasibility of the location is very important, especially for a residential project and more importantly when it’s your first home.
- Social Infrastructure/ Future Development – Social surrounding is very important to a residential project. Educational institutes, Malls, Entertainment centres, Shopping centres, etc should be in the close vicinity. At times when you invest into An under construction project, you may not find the location very developed, but in the coming years have a large scope of developments. If we hold an example of Ghodbunder Road, Hiranandani Thane, Hiranandani Powai, initially these projects weren’t that of a wow factor as the location back then weren’t so developed but today these are some of the landmark locations in Mumbai and Thane.
- Management – Another important thing to take care of is to see under what management does the project fall in and of how the management body works to ensure emergency help and basic needs like water supply, and electricity is taken care of well. Also, to see for how long would the developer be maintaining the project.
- Land History – The land on which the project is planned is the one thing you’ve to check through for the history. If the land is freehold or leasehold. In leasehold, the land belongs to the state and is leased to the owner for a certain period. At the end of the lease period, owners must pay to extend the lease. Most Banks will not finance a property if the lease period is less than 30 years. In freehold land, the land belongs to the owner itself. Banks finance freehold property easily.
RERA Verification: Verify all the records (through online government portals).After RERA coming in it has become easy for a buyer to verify all the documents pertaining to the land and the project on the portal itself of the developer.
- Subvention Scheme – There are three parties-the buyers, the banker and the developer. The buyer can book the property by paying 5-20% money upfront. The rest is paid by the bank in the form of a loan to the buyer. The bank disburses the loan to the developer as construction progresses. All this is routine. The most important aspect is that the developer bears the interest cost till possession or for a fixed period mentioned in the buyer-seller agreement but there is catch to it As Lucrative as the subvention scheme looks, it is a high risk to take. When you opt for a subvention scheme, you give the key of your CIBIL score in the developer’s hand. The builder is responsible for paying EMIs on your behalf in this scheme. If That has defaulted for any reason, it effects your CIBIL SCORE.You may also face project delays. On most of the consumer complaint forum, you will find a large number of people complaining about project delays under such schemes. Also, the cost of the property increases vis a vis if you buy without subvention scheme in short the interest paid by the developer to the bank is taken by you indirectly in the form of inflated price for the unit.But should you still want to go ahead with a subvention scheme then check for the following points .
- Check the financial strength of the developer. Also, try to find out about its past record of delivering projects on time.
- One should check the promised possession date in the documents and the penalty to be paid by the developer if the project is delayed.
- Read the fine print. Go through all terms and conditions of the agreement before signing it many a time the catch lies in the fine print of the details. Many buyers sign up without reading complete details and then cry of foul play. There is a lot to see through in this, so it very important to be safe than sorry .
- Pre-EMI is the payment of interest applicable on the loan only. This amount is paid in the period during which the house/ building is being constructed.With the payment of each monthly instalment using the Full-EMI option, the principal amount and tenure get reduced. On the other hand, the EMIs paid using the Pre-EMI option do not have any impact on the principal amount, loan repayment tenure, or rate of interest.
- It is a strategy to give a number of options to the buyer to confuse them. “Confuse to Convince” is the best strategy in marketing. Talking of Pre EMI, when a buyer is given this option, it looks very lucrative in terms of finance management as in the beginning the buyer only pays the interest amount till the date of possession and has to pay the actual EMI after the possession. For example, if the developer gives the possession after 3years and the loan period is of 20 years, you actually make payouts for 23 years, where in fact you end up paying more of the principal amount.
- Budget – Last but not the least, Budget. Every individual holds a specific budget when he looks for a home. We wish to find the best project, with better amenities and a social surrounding within our budget. However, you should also be calculative enough of your requirement. Preferences while holding a budget and prepared to stretch to some extent to find the best.
Hope this point will Guide you to How to Buy a House?