Buying a house is one of the most crucial decisions for people in India. In India, investments in real estate and property are a luxury. A person buying a house may need to give up their entire life savings. Or, they end up being burdened with hefty home loans.
An investment in buying a house is not something you can easily alter or rectify. Therefore, you must keep in mind a few essentials. This way, you can avoid getting deceived and losing your hard-earned money. Also, what would happen if you did not desire such a house in the first place?
The first thing you should focus on is your budget. The easy availability of home loans has made people push their budgets. Instead, you should be mindful of setting up a budget to have no unwanted financial crisis in the future.
After setting up your budget, you can move to shortlist the available properties. Shortlisting the best possible property will be perhaps the most important task for you. Many key factors lead you to your ideal property. Factors such as availability and supply of key amenities like power and water supply, the infrastructure of the area, and the seller's goodwill are of prime importance.
Home Loan Eligibility
Secondly, look into your eligibility for a home loan. There are various factors that reduce your eligibility for a home loan. Before financing the loan, the financing agencies will look into your credit score. This determines your repayment capacity, existing loans, income, and age.
Many financing agencies provide a home loan calculator on their websites. You can use them to check your eligibility. Banks and financing institutions are also concerned with the reputation and goodwill of the builders. If they are not satisfied with the builder, they will not process the loan.
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Verification of Documents
People usually rely on their brokers to verify the documents related to the property. This is a bad practice because you can be misled by your broker (either intentionally or unintentionally). Therefore, verifying the property document yourself is important.
You should conduct the necessary due diligence in verifying the title documents of the property. Documents such as any government order for grant, gift or sale deed, succession certificate, etc. will form the evidence for transfer of the property over the years. Therefore, understanding the nature of the title is also important.
Background Check of the Seller
While buying a property, you cannot overlook the identity of the seller. While buying a property, people are often interested in just the property. So, verifying the credentials of the seller is not a top priority. But, you must look into the authenticity of the seller. E.g., Check whether the seller has government authorization to sell the property.
In the case of joint property, identify all the owners involved. Identifying whether the seller is a company, firm, partnership firm, etc., is essential to confirm their authority to own and transfer the property. Verify all the documents that ascertain the seller's identity (Aadhar Card, PAN details, Income Tax returns, etc.).
Awareness about the type of Land
Be aware of the land use pattern. Many state laws in the country prohibit the purchase of agricultural property by non-agriculturists. However, with increasing urbanisation in the country, non-agricultural land use is at an all-time high. As a buyer, be aware about the master plan of the project and ensure that the property is being developed per the zoning plan.
Don't overlook RERA compliance while buying any property. You should only engage with those projects which are registered under RERA. Make sure that all the essential provisions under RERA are adhered to.
Moreover, try to find dig-up any cases or complaints filed against the developer on the official web portal of RERA (each state has its website). Along with the developers, real estate brokers should also be registered with their respective state RERA. Therefore, only appoint a broker after verifying their RERA registration number.
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Property insurance or home insurance is indispensable. Insurance will cover your expenses in case of any damage or loss. Moreover, it will also protect you from any third-party liability arising from any sort of injury faced by such a third-party on your property. Home insurance minimizes the financial burden in such cases.
Ideal home insurance will also be applicable on the contents of your property, which includes: electronic appliances, furniture, and even jewellery. You can claim such insurance even if there is any theft or robbery. Therefore, you should insure your property as it provides economical protection and covers potential risks.
A physical survey of the project site is of equal necessity. In today's era, you can be fascinated and influenced by the advertisements surrounding you. However, more often than not, these advertisements lead to misconceptions about the project.
Therefore, make it a point to mandatorily visit the project site before proceeding with the purchase. You should verify the basics, like the exact extent and measurement of the property. In the case of the Land on which the property is built, you should identify and demarcate the boundaries.
Those mentioned above are just a few basic due diligence methods. You must understand that the points mentioned in this article are by no means an exhaustive list. You, as a buyer, should conduct an elaborate due diligence process to ensure that your investment is viable.