Sunday, March 23, 2014, AM | Leave Comment
A house, for most families in India, is probably the most important asset that they have. Apart from the obvious financial value, a home also becomes of sentimental value to a family, a place where their memories originate from and are located.
Hence, before buying a house, there is a considerable amount of research that needs to be put in.
There could also be entrepreneurs who seek to start their business and buy new commercial projects such as those in Andheri East. The same rules apply to them as well.
There are various facts to take into consideration, but below are a few essential dos and don’ts of buying a home.
Ensure Property’s Due Dilligence:
If you’re purchasing from a builder, there are two documents that they should seek from the builder. The first is the drawings and plans of the property which must be approved by the authorities. The second is the Intimation of Disapproval (IOD). The Intimation of Disapproval is given to the builder from the authorities.
While buying floor space in an under-construction building, look for a commencement certificate. The certificate is a valid legal document which states that the builder has the correct licenses and permissions from the relevant authorities in order to go ahead with the project.
If the property has been mortgaged, then seek a no-objection certificate (NOC) from the relevant creditor as a default in mortgage payments by the builder may cause a non-NOC holding buyer to be asked to leave the premises.
Unambiguous land title deeds should be shown along with other proof showing that there are suits tied to the property or any debt related to the property. You also need to take into account the fact that the completion date given by the builder often gets delayed, sometimes by over a year.
There are a few banks and housing finance companies which seek due diligence of properties themselves. This helps them reduce bad debts and also gives the buyer an additional sense of security.
So if you’re looking to buy your house through a home loan, you can go through your bank’s list of pre-approved properties.
Another factor check is water supply to the property and the situation of electric supply as well. There should not be sudden voltage fluctuations or abrupt water shortages.
Hidden & Additional Costs:
When you seek a quote from a builder, he will give you a price that is per square foot. Try to ascertain if there are any additional costs that he has put into the base price.
There are compulsory payments and fees such as stamp duties and registration costs and these amount to roughly five percent of the total cost of the property.
Houses and properties purchased through home loans have to be covered an insurance policy so there is an additional cost with regards to insurance. Then, after the purchase of the property, changing it to your personal tastes will cost a lot of money as well.
If you’re buying a second hand property, ensure that tax and utilities bills have been paid in full.
The Options of Home Loans:
Generally speaking, go to a bank or a finance company only after you’ve chosen a property. There a few institutions that will not give loans for properties more than fifteen years old or have been sold twice. If you seek financing for a property that has not been pre-approved through any bank, then you’re not going to have an easy time.
Nowadays, larger builders have agreements with banks and financiers in order to help get customers for their properties. These are safer bets to choose as banks and finance companies do everything possible to avoid losing money.
While many institutions provide loans which cover almost eighty percent of the property value, it is advisable to lower the loan to the least possible amount. So if you’re able to pay fifty percent for that new commercial project in Andheri East, pay fifty percent.
Ben Wilkins is a real estate expert turned freelance writer. Ben now writes on the fluctuations of the property market and what is the best course for buyers to take in order to purchase properties such as one of the new commercial projects coming up in Andheri East.
In the above article, Ben has tried to outline a few check points for any person purchasing a property from a builder and how to go about financing the property.
Contact Ben for any further queries related to the world of real estate.