Buying property is a daunting process not just because you spend a large portion of your life’s earnings on it but also because it involves an endless pile of paperwork, checklists, authorisations, etc. Several clients have reached out to me for guidance during various stages of buying property. So to help make it easier for the rest of you, I have prepared a list of things you must make sure to have checked before buying a house.
The location of the building
This step comes in the initial steps of deciding which house or property you want to buy and is one of the most crucial factors. Make sure the location of your building is accessible to your place of work, highways, public transport facilities, and recreational places such as parks, malls, and restaurants. If you are moving in with your family and kids, you must check how far the schools are. The proximity of grocery stores, hospitals, and pharmacies needs to be suitable too. Finally, the location has to suit your lifestyle too. Are the things you enjoy (socially and culturally) near your house? Is the locality in the middle of a bustling intersection where every public transport mode is three steps away, or do you prefer the tranquility of a quiet and secluded house?
The building’s age
If the building is too new, i.e., it is still in its construction phase, make sure you buy from a trusted builder. Buildings are often left incomplete, and the buyer’s money goes to waste. If you are buying in an under-construction space, ensure that the builder is reputed and the construction will be completed. Conversely, if a building is too old, you need to assess its strength, examine how it has been maintained so far and make a decision accordingly. This information becomes even more crucial if you buy the property for yourself rather than investing.
In cases of old properties, it is also important to check the structural integrity of your prospective building. Pro-tip: Find out when the last structural audit for the building was carried out, and you will find all the relevant information there.
Check the house as your life depends on it!
Once you have started finalising a few houses, start your detailed research into each one. Request to see the floor plan and check if it matches the house that was made. By doing this, you will avoid being duped off any square footage or area you are being charged for unnecessarily. This also makes you aware of any alterations or changes made in the plan during construction.
Thoroughly inspect the washrooms and kitchen for leakages. Check the tiles and walls to see if you notice any flaws. Finally, ensure the water, gas, and electricity lines have been provided as promised to you along with the flow of natural air and sunlight. These checks are not easy to conduct. This might even mean you will have to visit the house multiple times, but the effort is worth the result. Also, make sure the builder has delivered all amenities that were a part of the initial plan, such as a gym, garden, and pool, among other facilities.
Is your paperwork in order?
Home loan documents such as residential proof, income proof, property papers, and identity proof are just some of the many things you will need to keep handy to ensure a smooth loan process. Before applying for a loan, ensure you are eligible and that the interest rate is at par with market trends. Once you have finalised a bank, your stamp duty and registration must also be completed. The sale deed, purchase agreement, and possession letter are some important documents you will need. Talk to your realtor and maintain at least two sets for each document.
Buying a house that does not come with an Occupation Certificate can seem attractive because of its relatively low price. This, however, is a mistake in the long term. Your house can be subjected to action by local authorities since and classified as illegal construction. Never let go of the OC.
While meeting with the sales associate, ensure that the building is not bound by any pending loans. Checking the ownership, and ensuring NOCs from various departments have been cleared is the kind of information a sales associate can give you. Don’t forget to check if the intimation of disapproval (IOD), which is an approval of civil and structural plans, has come through.
Likewise, documents such as Possession Letter, Commencement Certificate, Intimation of Disapproval, Parking Allotment Letter, and Completion Certificate are just as important. Don’t forget to ask the sales associate or your realtor if the building is registered under the RERA Act.
Always account for unforeseen expenses.
I have seen a lot of clients unable to pay initial installments because their loans haven’t been processed yet. In other cases, the builder might get too busy and leave your paperwork on hold. The point is there is a chance that there will be unforeseen delays from either side, delays that will cost you time and money. Make sure you account for those, always plan, and have extra money.
For example, it can be tedious for a regular buyer to understand how much Government Stamp Duty and Registration charges and GST charges are applicable to them. Depending on the use of the property, type of housing, and other factors, the GST rate may vary. GST for affordable housing in India is limited to 1%, for normal housing, it is 5% (excluding ITC or Income Tax Credit). If you are buying commercial property, the GST can be as high as 12%. Buyers also need to take into cognizance broker and advocate charges. Enquire about monthly or annual maintenance of the house before you finalise the deal to ensure it fits in your budget.
And lastly, don’t forget your keys!
The builder, realtor, and other parties involved might all have a set of keys to your flat. Once the sale goes through and the house is officially yours, make sure you are in possession of all the keys and none of them is left out.
It is very common to miss out on an important detail or get defrauded during the process of buying a house. Years in real estate and creating content on Instagram have helped me get acquainted with several people who have suffered while buying property. This article is a small attempt to educate people about buying real estate, and the things to keep in mind while doing so. I hope I can continue to educate consumers about the real estate industry even in the future.
(The author is a real estate professional who is passionate about educating consumers and uses modern mediums to impart his knowledge. In addition to being the Founder of The Green Cottage and Edstate, and Co-Founder of Bregoland; he also plays a strategic role at Propacy.)