A house is meant to last a lifetime, so before buying a house it’s advisable to take your time to find out all you need to know about the property as well as the financial implications of the purchase. Besides the EMIs (equated monthly instalments) that you will have to pay, property tax and other maintenance charges might have to be borne by you.
If you are wondering about the steps to buy a house in India, we’ve made it simple by presenting you with a guide to follow.
It’s pointless to go house hunting unless you know whether you can afford one. Get a rough idea of how much you can invest in a house. Remember that in addition to the sale price, you need to spend on stamp duty, legal fees, brokerage fees and other charges to register the property in your name. Besides the initial expenses, bear in mind that you need to pay property tax annually. Other fees such as maintenance charges may have to be incurred if the house is in a gated community.
If you are a first-time home buyer, then most likely, you are investing in a home for you and your family to live in. Some people buy a home as an investment so that they can earn income from monthly rentals or make a profit when they resell the house after a few years. Being clear about the objective of buying the house makes it simpler to narrow down other factors such as the location or the amount you can invest.
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Based on the size of your family and the age of your children, you will have certain criteria that you expect from a house. This could be a specific number of bedrooms or a backyard or garden for your kids to play or even security. For example, if you want a safe neighbourhood with 24-hour security and restricted access, then you should consider buying a house in a gated community.
If you are purchasing a house as an investment, then instead of the number of rooms, you need to look at the location of the house, its connectivity to public transport and the accessibility to facilities, including supermarkets, schools, clubs and hospitals, as these factors will increase the rental value of the property. It's always advisable to buy houses designed by reputed architects.
The thought of paying out a percentage of the sale price as brokerage fees can make you wonder whether you should save money by finding a house on your own. However, locating a house that is perfect for you can be a lengthy process. After you visit a few houses from the ‘for sale’ listings in the classifieds, you will realise the merits of hiring a broker. Besides advising you on how to buy a home that will appreciate in a few years, brokers have excellent contacts with landlords as well as developers and can easily find at least a few houses that meet your requirements. They can put together a list of properties for you to view over the weekend, saving you a lot of time and effort.
Once you hire a broker, you should brief him on your budget and requirements so that he can begin identifying properties that will be ideal for you and your family. Before you start touring the properties, check with the broker, whether they meet all or at least most of the specified criteria. One of the tips for buying your first home is to take photographs or make notes of the features that you like or dislike in the houses that you visit. After you have toured a few houses, you can get confused, so keeping a record of the properties can help to shortlist the most suitable ones. Besides the features, consider the prospective appreciation of the house before you make a final decision.
Most first-time home buyers don’t have the money to purchase a property without a loan. Once you shortlist a house, it’s best to visit your bank to verify how much you can get as a housing loan. Usually, banks work out the loan amount based on your income and assets. Don’t forget to compare the rate of interest on home loans offered by a few banks so that you can get your loan at the lowest interest rate.
It’s crucial that you get a lawyer to perform due diligence to ensure that the title of the property is valid, and the developer or seller has the right to sell it to you. This is one of the most important steps to buying a house because without legal title, you can’t sell the property. If it’s an existing construction in a gated community or housing society, the lawyer will check whether the occupancy certificate and safety certificate are in order.
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After legal diligence, there are still a few steps to be completed before you can take possession of your house. Firstly, before drawing up the sale deed, enter into a sale agreement with the seller or developer as this will give you sufficient time to get your loan sanctioned and to carry out a few more checks on the property. These include:
- Checking the building sanctions and plans to ensure that all approvals are in place, and the construction is legal.
- Verify whether the construction adheres to the byelaws in the area and that there are no encumbrances.
- Make sure that the property has received no-objection certificates from the land, water and electricity authorities.
If you are buying a house that is under construction, fix a meeting with the developer to understand the payment schedule. Usually, this is either construction-linked or time-linked. In the case of the former, you need to make an initial down payment and pay the remaining instalments after a specified stage of construction is completed. In the time-linked plan, the instalments need to be paid at intervals. There is also a flexi plan that combines the two systems. After the type of payment plan is decided, you need to get the loan amounts sanctioned by the bank at the right time so that you can pay the instalments when they are due.
Once the construction is completed, and the final payment is made, you need to register the sale deed with the local authorities to transfer the ownership of the house to your name.
Before moving in, you should design the interiors to suit the needs and preferences of your family. This may mean that you won’t be able to move into your house immediately, but it’s well worth the wait as you will live in it for several years. Consult a professional interior architect or designer to help with creating stunning interiors for your new house.