There are so many web pages available
on the net which can give you a fair idea about tips on buying a Home / Flat.
However, the details which are really
very important and vary from country to country or most of the times even city
to city do not get discussed. Hence, reading those long articles are just
useless and do not serve the purpose. I have tried to incorporate all the
information required specifically for buying a home /flat in Mumbai, Thane & Maharashtra, India.
I always believe budgeting is most important for any event. Buying a home or making a holiday trip, its always important to assess your cash balance, loan eligibility and personal borrowing. Buying a home generally involves the following tasks:
1.
Financial Planning: An important key in buying property.
Check cash / deposits available with
you. Talk to your Banker / Home Loan provider about your loan eligibility based
on your annual income.
The Do’s and the Don’ts
of Financial Planning:
- Do check before hand what all documents
are required for loan processing and disbursing i.e. all the documents
required to completely close the deal. Note that various documents are
required by Home Loan provider at various stages of loan processing/
disbursement. Make a list of such documents and assess whether they can be
obtained. Make you annual expenses plan which should include your annual
income from different sources, EMIs, etc. Note that you may need some
money for urgent expenses like medical etc.
- Do not borrow beyond your
limitation. Financial tension is worst thing in life. While considering
the total costs do include Stamp Duty & Registration Fees, expenses at
Registrar’s Office, Advocates fees/ charges, Realtor’s commission, etc.
- Do ask your realtor/ Agent: How
much will be Stamp Duty, Registration Charges, Advocates fees, Realtor’s
Commission (it is generally 1% of sale value), charges to Society/ Builder,
any other hidden charges. Will there be any charges to be paid to service provider’s
like Electricity Authority, Water Supply authority etc. due to change in
ownership?
- If looking for a Home Loan, do
some home work about Home Loan interest rates. If you have a good track
record with your Banker, you may in some cases negotiate the rate of
interest with your Home Loan provider.
- If the property is an old/ resale
Flat, have a close look into the physical condition of the flat, if the
flat requires some Repairs / Renovations, estimate charges of the same beforehand
& also consider as to what are your priorities.
2.
Area / Location selection:
- Take a fair idea about prevailing
prices of properties in different areas.
- Talk to few other realtors working
in those areas.
- Browse through the internet. It
will be helpful to know about the area and their prevailing prices.
- Consult your friend or relative or
any other known person who stay in that locality.
- If the area is new or unknown to
you, visit the area frequently along with your family. If possible, try
doing some shopping in that area. Dine at the local restaurant. Spend some
time in Public places like Gardens, etc in that area.
3.
Finding the Right property & cracking the deal at Right time:
A
skilled Property Consultant can provide you various options in the locality
which fits into your financial budget.
Searching
for a property on net can be a waste of time. These searches are very general
and lack complete details of the property. Most of the times the listings are
pretty confusing. A realtor can help you finding the reason for difference in
price. Hence, check whether the price includes basic cost of flat/ house,
club charges, car parking space, power back-up deposit, maintenance deposit,
etc. Ask the advertiser what all charges are included and excluded in the
price. Asking the following questions about the property you are interest to
buy is very important:
a) Is
the property new or old?
b) Is
the property is vacant or occupied?
c) What
is the ratio of Super and Covered area of the flat / society?
d) Is
there any loan against the property, if yes, the loan amount, name of bank /
institution from where the amount borrowed and the process to clear the loan
including time duration.
e)
Who, how and when the loan will be cleared?
f) What
is the rental value?
g)
What was the price of the same house / flat sold last year in the same area?
h)
Within in how many days the payment is to be made?
i) Is
the property owned by an individual / joint / firm?
j)
What is the ratio of payments to be paid? This ratio may vary depending on type
of property and also varies on seller to seller.
k)
Number and type of car parking(s).
l) Is
Power Back available. Please note that a minimum of 15,000/- per KV is being
charged towards Power Back-up by the Builder.
m) If
the property is under construction / not yet registered, as per the prevailing
market practices the Builder charges about Rs. 500– 1000/- per Sq. ft as
Transfer Charges. (The legality of charging such transfer charges is a
different aspect) Get the same clarified, who will bear the cost.
n)
Club charges: In some of the complex, the builder demands club charges whenever
there is a change in ownership.
o)
Find what is the rate of monthly maintenance charges in the Society? This is also
equally important because it’s your recurring expenditure.
4.
Monetary Negotiations:
Offer
and counter offer is the only way for a good negotiation. However, a skilled
and genuine Property Consultant / Broker can guide and help you in negotiating the
right price. A good Property Consultant can neither provide you a property at
cheaper price nor can sell your property at a higher price. He is always
concerned for the benefit of both Buyer and Seller. If the property consultant
happens to speak only from the point of view of the seller, do not trust him/ change
him. Generally 30 – 45 days time is
given to Buyer to make the complete payment of the Sale value.
- Even if you are not opting for
Home Loan, it is always good and advisable to get a Search Report / Legal
verification or scrutiny of various documents including the Title Deed done
through a competent
advocate. It will cost just Rs. 2,500/- to Rs. 5,000/- only. Before you purchase a flat, you have to have a
title and document search conducted by a competent advocate. You cannot do
it yourself. You have to use the services of a competent advocate. It is a
professional job to be done with professional assistance.
- Do take Xerox copies of all the
documents at the time of entering into agreement.
- Do not hesitate in asking a copy
of the ID proof of the person with whom you are entering into Agreement to
Sell. Business is Business.
- Do not rely on personal reference.
- Documentation should be perfect. Get
the documentation done from a competent Advocate only.
- No compromise should be made on
legal formalities. If you are buying a flat which is under construction,
you need to take extra precautions. Generally, you may be bound to borrow
loan from the same Home Loan provider from whom the seller has already
taken home loan and mortgaged the property. Otherwise, the Seller
must clear his Home Loan and get the title deeds from Bank to enable you
to take Home Loan from other Loan provider.
6.
Closing the deal
Once you are making the
final payment, get the following documents in original:
a)
Title Deed (in case of home loan the
original will be with your Home Loan provider and you will get a copy)
b)
Receipt of Registration (original for
collecting the Title Deeds later). Generally it may take about a week’s time to
get the Original Title Deed from the date of Registration.
c)
Original Allotment letter.
d)
All payment receipts.
e)
No due certificate from the Society /
Builder.
f)
Past Electricity / Water bills /
Maintenance Bills and receipts, if any.
g)
Keys of all doors.
h)
Car Pass / stickers to put on your car.
i)
Any memberships cards / pass.
j)
Flat should be in vacant and peaceful
possession.
k)
Do meet your neighbors and let them know
you bought the flat and you are the new owner of the flat.
l)
Intimate the Society / Maintenance office
your contact details.
Hope
this information will help you buy your Dream Home soon!
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