Eight Steps before Buying a House

• @kw
• 25 Nov 2019

Buying house is one of the most important decisions in one’s life. Any decision taken should be first studies meticulously as per the need, the affordability and also future expectations. This requires several steps to make a wise decision.

1. Hire a Real Estate Agent

The prospective home buyer should first look for a good real estate agent. It should be seen that the agent has sufficient experience and an authorized by the builder. There are many agents who lure customers by giving inaccurate information which actually harms the buyer in long run. A reputed builder has a few authorized real estate agents who carry all required information about the builder ,legal processes and have different specialized people to deal with matters like leasing procedures, mortgage advise etc. These days it is easy to search genuine real estate agents through website and website reviews. Before visiting an agent one should prepare a list of questions to be asked. The most important is to specify location where you desire to buy your house as it should be important for you to get a complete overview of the location.

2. List Your Needs And Wants

Make two lists: one of must have and one of nice-to-have. The must have list should contain requirement regarding the size of the flat, affordable cost of the flat, basic facilities like electricity connection & generator back up, lift, water, security & maintenance, Kitchen & toilet fittings etc. Nice to have list should be, distance from your child or children’s school, distance from you and your spouse’s work place, size of swimming pool, gymnasium and other facilities of you and your family’s liking.  

3. Bank Loan Availability

First check with the Property agent, if the property is free hold as loan against lease hold property is difficult to get. Compare mortgage rates online, and look at the types of mortgages available—conventional housing loan at fixed-rate, floating rate—understanding the difference between these will help you to figure out how to buy a house that’s right for you. These days there are many options available and banks offer competitive rates. There is a huge competition amongst builders each devise various payment modes to suit the buyers. There details are also available with the authorized agents. One should first get pre-approval amount of loan that the bank / financial institution are ready to disburse. The pre-disbursal loan amount by bank depends on buyer’s credit score, ability to repay the loan etc. Depending on the affordability, the buyer should also decide about the down payment. If the down payment is more than the interest burden will be less. The disbursement of loan depends on the credibility of builders. Some reputed builders are in the approved list of specified banks.

4. Decide Whether To Buy A Ready To Move Flat Of A Flat Under Construction

There are advantages and disadvantages of both. In a ready to move flat, the builder will demand the full amount at the time of giving possession. The interest burden starts on full loan amount from day zero. Further you cannot ask for any internal modifications as the entire finishing work is complete. Any change that you may desire will cost you extra payment. However, a flat under construction project have payments in stages of construction and the interest loading is only to the extent of loan disbursed. There have been many cases of delays in completing projects when a project is under construction. Thus it is very important to see the past record of a builder. Some builders also undertake to give compensation if there is any delay beyond the agreed period. This brings some comfort ability amongst the buyer.

5. Taking a View of Projects

Checking with your estate agent/s make a list of project that you would like to visit, preferably with your family and make your right choice. For example, if your kids are small and you want a good school for them, see if any such school is there near the project. Your visit to these project is also to make sure what you want, what’s available, and what you can afford. The more comparing and contrasting you can do, the more knowledge you have about the market and your options. Ask your agent for advice about how to buy a house that really fits your needs.

6. Make an Offer and Negotiate

It is well said that nothing is non-negotiable in this world. It all depends on the supply and demand situation. The real estate is a buyer centric market, therefore a reasonable negotiation is always possible. The real estate agent can also initiate the negotiation in buyer’s favor. However, very reputed boulders give little scope for negotiation as they have high credibility in the market and face little problem in selling their projects. However, all is not negotiating about the price, it can also be some other factors than the price. Wait for a counter offer from the seller side. Once you arrive at a deal everyone likes, you’re considered under contract to buy the house.

7. Get Sanction of Your Loan

Since you have pre-approved loan, your job is very much simplified. Now your bank knows that you have made the final selection. The bank will give you bunch of papers to fill up, sign some legal papers for mortgage of the property, send their property inspection officer for making out a report on the construction progress and they will follow the process to issue you a disbursement letter. All payment installments are usually made in favor of the builder.

8. Occupancy Certificate Received By Builder

Make sure that the builder has received the occupancy certificate from the competent authority i.e., Municipal Corporation and other clearances such as fire safety, Electrical load sanction, sewerage connection etc. before taking the possession that on or before making the final payment. However if a buyer has taken loan from the bank, they themselves will ensure that the builder is handing over a habitable possession to their client.

Now you are ready to enter safely to your new possessed home!