Home buyers are spoilt for choices these days, as there are a wide variety of residential projects to choose from. Discounts and freebies seem to have become the norm and almost all builders are offering these to attract customers. The prevailing conditions in the real estate sector indicate towards a buyers’ market, which is a welcome development for home buyers. However, buying a home can still be challenging, largely due to the huge investment involved, lengthy documentation process and legal compliance. To ensure a smooth home buying experience, you need to be proactive in preparing the groundwork. Here’s the ultimate to-do checklist for home buyers that you might find useful.
Finalize your budget:
You need to finalize the amount you are willing to invest to buy your home. You need to consider various factors such as your current income, future earning potential, overall savings, monthly/yearly expenses, etc. You also need to decide how much money you will be paying as down payment. For buying your home, you can choose an upper limit, for example, max 40 lakh, max 70 lakh, etc. The budget can also be finalized in a specific range, for example, 30-40 lakh, 70-80 lakh, etc.
Finalize your home:
First, you need to choose the location where you want to buy your home. Next, you need to scan all the properties at that location that is within your budget. You need to physically visit all the shortlisted projects to experience how things actually are. You need to check the surrounding areas as well to ensure that the project is in a good neighborhood. You need to check if the area has adequate social infrastructure such as hospitals, markets, schools, entertainment centers, etc. Builder’s reputation and past track record needs to be evaluated.
Negotiate on price:
Once you have shortlisted 2-3 projects, you need to start price negotiations with the builder. Always remember that just like you have a budget range, builders to have a range in terms of the price of the property. If you negotiate properly, you can get close to the lower limit that the builder may have in mind. Feel free to discuss other nearby projects with the builder to put additional pressure on them to reduce the rate.
Check the rules for down payment:
The down payment can come from your savings or you may also have to utilize your fixed deposits or other investments. Prior to making the down payment, you need to read the related rules. For example, some builders do not charge any penalty if a refund is requested within a specific time frame. However, many builders do have a penalty component associated with the refund of down payment. Check these rules carefully before making the down payment.
Check the purchase agreement:
The actual agreement would come at a later date, but you can request the builder to provide a sample copy of the agreement. It would provide all the details about the property and the builder and it will have other relevant information. It will also define the rules of the purchase transaction. One of the important things to check is the liability of the builder in case of project delay. If you have limited understanding of legal jargon, you can hire a professional lawyer to vet the property purchase agreement.
Get all the documents:
Once you have made the down payment, the builder will start the documentation process. The builder will provide you a list of all the documents that will be needed. You need to get the documents ready and provide it to the builder. Documents may include the identity card, address proof, driving license, income tax returns, electricity bill, etc. You will need these documents at the time of applying for the home loan as well. Make sure the data matches across various documents. If not, you need to get the documents corrected at the earliest.
Choose a home loan provider:
Many residential projects offer pre-approved home loans. This facility makes it easier for home buyers to get a home loan sanctioned. However, you are free to choose your own home loan provider if needed. It is possible that you may want to choose a home loan provider that may be offering the lowest interest rate or other benefits such as zero processing charges. If you are choosing your own home loan provider, you need to get all the project related documents from the builder and submit it to your home loan provider.
Check everything at the time of handover:
Before you take possession, ensure that everything has been built as per plan and all systems are working properly. You need to check the electrical connections, taps, plumbing, windows, doors, floors, and other things that may be installed. You also need to ensure that you have a proper Completion Certificate from your builder. The Completion Certificate is proof that the home and the building have been inspected by municipal authorities and everything is built as per standards.
Check for warranty:
Builders usually provide a warranty for structural damages and other major problems such as water seepage. The warranty may be applicable for a specific period of time, for example, 5-10 years. During the warranty period, you need to check your home for structural issues or other major problems. If you find anything serious, report it immediately to the builder. If the home is still under warranty, the builder will have to bear the cost of repairs in full.
You need to review and update the checklist regularly or else it would no longer be relevant or useful. Whenever you have crossed a particular milestone in the home buying process, you need to update the checklist accordingly. When you review the checklist regularly, it will also act as insurance for the things that you may forget. It’s not uncommon to see home buyers forgetting their critical documents at the time of applying for a loan or on the day of the registration. The checklist will help you avoid all such unwanted developments. It will also help save a lot of time and effort and ensure peace of mind by providing timely guidance during the home buying process.